The Spanish housing market continues to grow stronger
Spanish house prices rose by 6.49% in 2018 from a year earlier (5.25% inflation-adjusted) to €1,493 per square metre (sq. m) – the biggest annual rise since 2006, according to TINSA. Quarter-on-quarter, nationwide house prices increased by 1.7% during the latest quarter (1.34% inflation-adjusted)
# Spain. Investment
After eight long years of house price declines, Spain's housing market finally returned to growth in Q1 2016. Spanish house prices had fallen by a total of 41.9% (46.8% inflation-adjusted) from Q4 2007 to Q3 2015, based on figures from TINSA. There were 31 consecutive quarters of y-o-y declines.
Demand continues to rise strongly. In the first eleven months of 2018, home sales in Spain surged 10.6% to 481,220 units from the same period last year, after annual rises of 15.4% in 2017, 14% in 2016 and 11.5% in 2015, according to the Instituto Nacional de Estadistica (INE). The continued increase in transactions was mainly driven by foreigners buying homes on the coast and in cities like Barcelona and on the Costa del Sol, one of the country's most popular areas with overseas purchasers. Most foreign homebuyers are Britons, French, Germans, Belgians, Italians, and Swedes.
There is a close link between rental yields in Spain and the health of the Spanish tourism sector. Currently, Spain is the second most visited country in the world. According to the Ministry of Tourism statistics, about 35% of Spain’s 80m+ tourists do not stay in hotels. Obviously, some will have their own homes, or stay with family and friends, but that leaves a serious number of overseas visitors renting privately. As a result, rental yields make letting a property in Spain an interesting option. And not just for the buy-to-let investor but also as a way to cover a property’s running costs. Across the board, top quality, prime located properties were 100% occupied in the high season in 2018.
There is high demand for both long and short term rentals. However, it is absolutely essential that the location is the best and the property must be in 5* condition. What used to be considered luxury items, such as free wifi, flat screen t.v. & satellite, high-quality interiors, and equipment, are now standard requirements. It doesn’t have to be a grand detached villa. There is just as much demand for smart two bedroom apartments in the right location.
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