Low property prices, rising tourism figures and an increase in the willingness of banks to approve financing are creating ideal market conditions for buy-to-rent investors in Spain. Spanish property market conditions have been steadily improving for a sustained period of time and are continuing to drive sale figures upwards, especially as the profitability of buying to rent increases.
According to a recent analysis by Spanish rental company Alquiler Protegido, the increase in specifically buy-to-rent investors across Spain is due in large part to low market prices and the recent increase in the lending capabilities of Spanish banks. Savvy buyers are investing in strategic urban locations such as areas near to universities in the larger cities and in the most popular tourist destinations along the Spanish coastline. The ease of obtaining mortgage financing from Spanish lending institutions is further aiding the growth of the rental market.
According to the study, investors are targeting a variety of potential market groups, including students, retired couples, individuals and young couples looking to climb onto the property ladder for the first time. Retired couples are a particularly interesting market as they are often individuals who are looking to realise their assets, minimise or rid themselves of mortgage commitments and are now happy to live comfortably in rented property.
Tourism in popular holiday destinations such as the Costa del Sol is also significantly contributing to the profitability of buy-to-let properties. Government figures showed that tourism alone brought a total of 11.5 billion euros to the Costa del Sol in 2015, and while 2014 saw a record 10.2 million visitors, 2015 welcomed 10.6 million visitors to the famous coastline, an increase of 4.3 per cent.
While property prices still remain up to 33 per cent lower than pre-crisis values, such increasing levels of tourism added to an already booming industry, as well as easy access to finance are creating an opportune moment for buy-to-let investors. There are still a number of high quality, bargain properties and bank repossessions available at a reduced price along the Costa del Sol with excellent rental opportunities, and clearly a significant amount of demand.