With over 300 days of sunshine per year and bright blue skies that stretch through summer, autumn, winter and spring, the reasons so many people opt to exchange the icy winds of the North for the warm Mediterranean breeze in Southern Spain are numbered and varied; but following one of the worst economic crises the Spanish had the misfortune of experiencing when the property bubble burst in 2007, some very favourable market conditions are currently creating an opportune moment to invest in the Costa del Sol.
1) Low Post-Recession Prices
Prices fell for seven consecutive years in Spain after the economic crash in 2007 and the real estate sector in particular suffered a severe readjustment during this period, with prices falling by between 30 and even 50% across the country. Today, house prices are still between 35-45% below peak levels on average. Recent house-price indices published by the Spanish notaries illustrate the stabilisation of Spanish property prices, indicating that prices have finally bottomed out, meaning now is the time to take advantage of the (rapidly decreasing) stock of high quality properties in prime locations available at significantly reduced prices. Please read here for further information on average property prices by area.
2) Prices are Rising
Amidst continuous improvement in economic conditions and an increase in consumer confidence and foreign demand, with foreign buyers now accounting for 1 in 5 house sales in Spain, house prices have not only stabilised in most regions, particularly in Barcelona, Madrid and popular coastal areas such as the Costa del Sol, but are also registering healthy increases. Properties along the Mediterranean in areas such as the Costa del Sol, Costa Brava and Costa Blanca have registered a price increase of 6.2% in the past 12 months, further fuelling Spain's recent surge in property sales. House prices in Spain are rising at the third fastest rate in Europe, significantly bolstering the confidence of investors and already encouraging higher levels of property transactions in prime areas across the country.
3) Increase in Low-Rate Mortgage Approvals
The economic recovery goes hand-in-hand with credit availability and bank lending. As demand and sales surge, Spain's banks are advancing more loans to buyers of second hand properties and new-builds and dramatically cutting their borrowing costs, which are set to remain low for 2 more years. Financial institutions in Spain have regained their confidence following an ailing period of instability, strengthening the ability of local and international investors to pursue the wide variety of investment opportunities available within the region. The ease of obtaining mortgage financing is aiding transactions levels, boosting the construction industry and little by little restoring the Spanish property market to its former glory.
4) High Buy-to-Let Potential
According to a recent global report by the World Economic Forum (WEF), Spain has an excellent infrastructure, a wealth of natural and cultural resources, and the most competitive tourism industry in the world. Spain to be the third-most visited country in the world, with around 60.6 million annual arrivals as well as a positive potential for further growth, thanks to a current influx of tourists from emerging markets such as China, Brazil and Mexico. Tourism in popular holiday destinations such as the Costa del Sol significantly contributes to the profitability of buy-to-let properties. In 2015, tourism alone brought a total of 11.5 billion euros to the Costa del Sol, and between January and August of 2016, Malaga airport registered 11.3 million arrivals, marking one of the busiest summers yet and far surpassing last year's record breaking numbers.
While for many years tourists opted for package holidays provided by hotels and hostels in their desired destinations, low cost airlines, the availability of an abundance of flights to a variety of locations and the internet has revolutionised the holiday experience. Holiday home hire has increasingly become an option. For the holiday-maker this means a far higher standard of accommodation and improved holiday experience for less financial outlay, and for the buy-to-let property investor, the shift is creating high rental potential for their investments, especially in areas of significantly high levels of tourist demand such as Benalmadena and Mijas.
5) Domus Venari
Investing in a new home, whether it will be a permanent or holiday home, should be an enjoyable milestone in your life, that's why we like to make sure we put in all of the groundwork for you before, during and after the purchase. At Domus Venari, we don't just show you a selection of properties on the Costa del Sol that meet your criteria - we find and lock in the right property for YOU. We have access to every single property available on the market and coupled with our proven track record of expertise and experience, we pride ourselves in our ability to make your house-hunting experience as smooth and stress-free as possible. To read more about what we offer, read our recent blog post, 6 Reasons to Choose Domus Venari.