Although Covid-19 restricts travel, home prices surge in the US, UK, and Germany; property buyers set their sights on Europe. With travel opening up, the second-home market in Spain has seen an uptick in interest from foreign property buyers. There are many places in Spain where you can find a good deal on buying Spain real estate in 2021. Now, trans-Atlantic travel for Americans tentatively resumes and Covid-19 restrictions are eased gradually in Europe. Many restart their search for properties in Spain.
Spain is offering residence programs for investors, entrepreneurs, or skilled workers who want to live there. The question is: is 2021 proved to be an excellent time to buy property in Spain?
This guide will walk you through everything you need to know about the Spanish property market in 2021.
Are houses expensive in Spain in 2021?
The prices of homes in Spain vary in general in 2021. Property prices in Spain depend on the regions and types of properties you look for. In 2021, the average price of new homes in Spain is EUR 2,482 sqm across 16 of Spain’s 17 regions. It is the highest value that has been achieved since 2010.
According to a report from Forbes Magazine, in one of southern Spain’s most desirable areas in Marbella, Malaga, property price is EUR 3.95 million. It is still slightly cheaper than the similar homes in the city of Markham in Ontario, Canada, but more expensive than a storied chateau in Cambrai, Nord-Pas-de-Calais, France.
As of July 2021, the average price for a second-hand property in Spain stood at EUR 1,816/sqm. It is still very affordable compared to second-hand property in other countries. The most expensive second-hand property for sale in Spain goes to the market in the Balearic Islands. The price is about EUR 3,169/sqm. Next, go to Madrid with EUR 2945/sqm, Basque County with EUR 2,699/sqm, and Catalonia with EUR 2,325/sqm.
With that being said, cheap properties for sale in Spain are still available in 2021. Property buyers can also get a good deal of property for sale in Spain after Brexit. The cheapest regions to buy a second-hand property are Castilla La Mancha (EUR 875/sqm), Extremadura (EUR 933/sqm), and Murcia (EUR 1,056/sqm).
Are house prices going down in Spain in 2021?
It is not likely that the house prices are going down in Spain in 2021. Based on Spanish Property Insight first-quarter 2021 figures. On the contrary, the property price has seen a surge in 2021. Different studies show a greater demand from foreigners on houses for sale in Spain’s coastal regions. The most significant increase still comes from the Balearic Islands, which has the highest price in terms of sqm, with a 4.4% increase compared to last year’s property price. Costa del Sol property price also recorded a jump in property price compared to the previous year.
However, it is worth remembering that the house prices in Spain generally decreased over the last two years. House prices in many advanced economies have risen substantially in recent months in 2021. The current property price increase in Spain reflected a general global property market price adjustment.
The current property price increase in Spain reflected a general global price adjustment.
Buy a house in Spain after Brexit
The main buyers of luxurious property in Spain are British expats. About 14% of the foreign buyers of property in Spain are Britons because they settle in Spain after early retirement. Some are regular holidaymakers with a property to enjoy all year round.
There is uncertainty over the Spanish property market after Brexit. Brits who own property in Spain are not sure if they can continue to stay and live in Spain. In 2021, there is an increasing number of Brits who wish to sell their homes in Spain. In a BBC documentary published in May 2020, many property agents in Spain find it challenging to sell the properties in popular resort destinations like Marbella. The property market is mainly affected by Britain’s exit from the EU that came into effect on January 1, 2021.
The British Pound is predicted to appreciate against the Euro in 2021. Buying property in Spain will become cheaper. Brits might be able to make more money from selling it and buying a new one. The price of British property is surging in 2021. Compared to the property for sale in Spain, Britain is still considered expensive for living. The Spanish property market is still desirable, as the average price per square meter is still going up in 2021.
Once certainty over the residency status for the Brits is confirmed, buying a home in Spain is still a good idea.
Compared to the property for sale in Spain, Britain is still considered expensive for living. The Spanish property market is still desirable, as the average price per square meter is still going up in 2021.
Should you buy or rent a property in Spain in 2021?
Spain continues to grow in popularity, and many are looking at making a move to Spain. As we have seen an uptick in 2021, buying a property in Spain can be a good investment. Renting a property in Spain is a much more affordable option. Whether you rent or buy will be a personal decision based on your specific circumstances. In the case of Spain, there are some essential questions you need to answer before purchasing a property in Spain:
- What are your requirements for your home in Spain?
- Do you want to target high-end new homes in Spain?
- Are you planning to retire in Spain?
- Do you need to find a property in Spain because you want to move here to work?
- Are you financially independent, and do you want to buy a property in Spain with your partner?
- What are your real estate goals?
The answer will determine whether you should buy or rent a property in Spain.
What is happening in the Spain property market right now? Will prices go up or down in Spain?
Spain Economic Outlook in 2021
OCED released a report in May 2021. The GDP of Spain is projected to grow by 5.9% in 2021 and 6.3% in 2022. The growth is supported by pent-up demand, the national recovery plan, and a gradual pick-up of tourism. The number is stronger than the European Commission prediction of the country’s economic growth in 2021 as 1.9%. The European Commission’s report expects Spain’s economic growth rate as 6.2% in 2021. It is the second-highest growth rate in the European Union bloc.
But the European Commission warned that the delta variant is a “stark reminder” that the Covid-19 pandemic is not over. According to an ING report, the market also sees Spain’s construction sector rebounding. The production of building materials rebounded and restored to pre-pandemic levels since November 2020. By 2021, ING expects similar production development to Spain’s construction sector, which means the country will experience further recovery.
Spain Golden Visa Programme, Residency and Startup Visa
Spain offers the Golden Visa Programme since 2013 to non-EU nationals who intend to stay in Spain. It is a popular residence visa issued to citizens from Russia, China, and Turkey. Spain also offers the ‘Ley de Emprendedores’ Programme, enabling self-employed individuals or entrepreneurs who wish to stay in Spain for their business. Foreigners are also able to obtain an investor visa if they want to invest in a Spanish company. Successful and flexible visa regimes can boost the economy. As a result, they are driving up the property prices in Spain in the long term.
Spain also offers the ‘Ley de Emprendedores’ Programme, enabling self-employed individuals or entrepreneurs who wish to stay in Spain for their business.
Tax Deduction Related to Property, Startup Law in Spain
The Spanish Government is also actively proposing new laws and policies to stimulate the economy. Recently it announced the ‘Recovery, Transformation and Resilience Plan’ for homeowners. It’s possible to get a tax deduction of up to 60 per cent for energy-efficient renovations on homes in Spain.
On July 6, the Spanish Government published new draft legislation known as the ‘Startups Law’. It is proposing the creation of visas for remote workers and digital nomads and tax reductions for startups. If the draft is approved, the new law will provide tax incentives for the creation of startups. Benefits include reduced tax rates, deferral of tax debts, and other tax benefits for non-residents. It hopes to attract foreign companies to establish themselves in Spain as well as attracting foreign direct investment.
If approved, the plan can entice foreign remote workers and digital nomads to choose Spain as their base. It can also offer attractive opportunities for property investment in Spain.
If approved, the plan can entice foreign remote workers and digital nomads to choose Spain as their base. It can also offer attractive opportunities for property investment in Spain.
Spain is one of the most popular countries for expats to go to in 2021
SchengenVisaInfo.com released a news report in January 2021. There had been marked a 40 per cent increase in the number of Britons interested to buy a second home in Spain. On July 19, 2021, Reuters reported that flights bookings to Spain had increased four-fold. This is caused by Britain announced the lifting of a 10-day quarantine for returning vaccinated tourists from July 19. Spain remains one of the most popular countries for foreigners to travel to.
According to Office for National Statistics in the UK, 121,000 older Brits lived in Spain in 2017. It was more than double the number 10 years ago. UK’s Institute for Public Policy Research showed that Spain is still the top country for British expats for retirement. Property Registrars in Spain show significant growth in properties purchased by other European citizens like Scandinavians, Dutch, French, and Germans.
Spain’s property market outlook for foreign buyers remains strong. It is expected to be more favourable as the economy grows and the unemployment rate drops.
Foreign Property Buyers in Spain in 2021
In 2021, foreign buyers account for most total property sales in Spain, especially on the Spanish coast. Places like Malaga, Barcelona, and Madrid are still very attractive to many property buyers from Scandinavia, Germany, and Britons. A piece of news reported by The Times UK in February 2021 revealed that the British are still the most prominent foreign property buyers in Spain. They have a strong interest in the coastal regions of Spain such as Costa Blanca, Costa del Sol, the Balearics, and the Canary Islands. According to a news report released in March 2021, Spanish properties are searched mainly by the following nationalities:
- British
- Swedish
- Italian
- Dutch
Buying a holiday property in Spain comes with the added plus of being a good income source, especially for those familiar with holiday rental platforms, such as Airbnb.
How Covid-19 Affects the Spanish Property Market in 2021?
The Covid-19 pandemic affects the property market in Spain because the virus spreads through the air. Therefore it is likely that there will be more outbreaks of the disease. Since people are scared to travel overseas, they will stay at home, which will hurt the economy. However, it also brings opportunities to the property market in Spain.
The global pandemic radically changed the way employees work, and companies hire. Recruiters are gradually leading the transitions to remote work. Early evidence from the World Economic Forum’s Future of Jobs Survey in 2020 suggested that business leaders expand their use of remote work. More people are turning to LinkedIn for remote work searches. It means that more employees can choose to work in a country with a lower cost of living. Meanwhile, they can still earn a good income with their skillsets.
As Spain is in the European timezone, it’s easy for companies headquartered in Europe to hire professionals in Spain remotely. It has made Spain a very attractive country for many skilled foreigners like designers, technology workers, developers, and financial professionals. The most significant remote work shift in history fueled a more robust demand for property purchases in Spain.
The most significant remote work shift in history fueled a more robust demand for property purchases in Spain.
The digital economy has led to several new technologies and services that have affected the needs of business owners. Among these, remote working is one of the most important innovations. It is very likely that in the future, companies will rely on remote workers. It is expected that home prices in Spain will remain strong in the near term.
The Best Places to Buy Properties in Spain in 2021
There are many factors to consider when buying property in Spain. One of the first is in which region you want to live. Property prices in some popular coastal areas or islands of Spain have skyrocketed in 2021. Some properties remain very affordable by developed countries’ standards. This section will briefly introduce the famous places for foreigners to buy properties in Spain.
- Best places to buy a holiday home in Spain
- Best places to buy property for investment in Spain
- Where to buy the best Spanish Costas properties
Holiday Homes for Sale in Spain in 2021
Every year tourists from all over the world go to Spain for a holiday. A holiday home is considered a good option for foreigners to live or invest in. With its Mediterranean climate, it offers an excellent vacation option, even during the cold winter months. Many holiday home platforms like Airbnb and Hostelworld provide convenient access for foreigners to manage Spain’s rental holiday home properties. You may like to buy a holiday home in Spain for a holiday. Or you may consider investing one to rent out in the future. You should think about what the destinations can offer as a holiday home or for vacation rentals.
Brexit clouds life for the British holiday homeowners in Spain. But the property price in Spain remain relatively cheap in 2021. You may be able to get a bargain if you research deeply into the property market there. It might be a good idea to purchase a holiday home in Spain in 2021.
Bilbao
Bilbao, the capital of the Basque country, is an important tourist destination for many people. It is home to the Guggenheim Museum, which is a great place to spend a week away from the hustle and bustle of city life. On November 8, 2017, Bilbao was awarded the Best European City 2018 at The Urbanism Awards 2018. It is also considered a lively service city in Spain, experiencing an ongoing social, economic, and aesthetic revitalization process.
Bilbao is a good place for young people or couples, given its various bars and nice restaurants. Places like Kursaal, a big concert hall near the river, and Begur, a small village close to Bilbao and the ocean, famous for its beaches, are examples of its variety in what it can offer. It is a destination for all kinds of tourists and people. You can find different properties in Bilbao, with the lowest price at EUR 100,000 to the highest at EUR 2 million.
The metropolitan area of Greater Bilbao is home to nearly half the population and economic activity of the Basque Country. The country positions itself among the more competitive and innovative European regions. The region’s GDP per capita is 30% higher than the average of the European Union. With its strong economic development, buying a property in Bilbao can be a good investment option.
Costa del Sol
Costa del Sol is one of the most popular tourist destinations in Spain. The climate is the Mediterranean, and it’s just great. The sun shines almost every day during the year, and the weather is perfect for long walks on the beach. The Costa del Sol (literally “sun coast”) is a long stretch of Mediterranean coastline in the Andalucia region of southern Spain. The place offers golf courses, hotels, restaurants, and other tourist attractions. Activities you can do in Costa del Sol include shopping, dining, sightseeing, sailing, golfing, walking, and even horse riding. With its popularity among many tourists, the properties for sale in Costa del Sol usually include luxurious villas, modern semi-detached homes, and beachfront houses and apartments.
Based on our research in August 2021, Costa del Sol offers cheap properties for sale as well. The most affordable 3-bedroom properties you can find in Costa del Sol cost you only EUR 35,000. Of course, the region also offers some of the most expensive villas in Spain. A 5-bedroom house in Marbella can cost you more than EUR 18 million.
We will continue to update the famous and exciting destinations for those interested in holiday houses for sale in Spain.
Best places to buy property for investment in Spain
When it comes to property for investment in Spain, it is crucial to consider the return and its location. Spain is a country with a high quality of life, with some of the largest cities in Europe. Therefore, if you are thinking about buying property for investment in Spain, you have to consider both the economy of the place and the quality of life in general, such as transportation, healthcare, schools, etc.
The biggest city in Spain is Madrid. Other cities worth considering for investing in Spain are Barcelona, Valencia, Sevilla, and Málaga. Each of these cities has different characteristics and offers separate returns on investment. Housing markets in Spain are very illiquid relative to other asset markets. It’s important to note that no one can predict with certainty what will happen with any particular investment decision. Therefore, a prudent investment decision process should be applied while investing in the Spanish property market.
Housing markets in Spain are very illiquid relative to other asset markets. It’s important to note that no one can predict with certainty what will happen with any particular investment decision.
Barcelona
Barcelona is the most expensive city in Spain. It is not the wealthiest city in Spain, though. Barcelona’s average income is about EUR 1,400 per month, while Madrid’s median income of a middle-class family is EUR 1,600 per month.
Barcelona is the most expensive city in Spain. It still offers an attractive opportunity to purchase an apartment in Madrid. According to a news report in Financial Times, as rents in Barcelona plummet compared to the pre-pandemic level, many locals are still interested in buying properties in Barcelona. Some buyers have secured discounts on the property for sale in Barcelona.
In March 2021, a report revealed that the average property prices in Barcelona decreased 2.7%. However, it is still 33.2% above the average prices in 2014. Barcelona still offers some of the best investment opportunities in Spain, as well as in Europe. In 2019, a report released by the Catalonian Government revealed that Barcelona is still divesting its economy and continues to attract foreign direct investments in robotics, cybersecurity, video games, etc. Barcelona is still one of the top ten European cities regarding the availability of affordable office space. Catalonia, the region where Barcelona is located, has more than 600,000 companies in 2019, representing 18.4% of Spain’s total companies.
We want to mention a bit about the property for sale in Sant Cugat del Vallès.
Sant Cugat is an affluent suburb of Barcelona. Houses in Sant Cugat del Vallès are among the highest search terms for Spanish property sales. The exclusive properties in Sant Cugat are among some of the most expensive houses for sales in Spain. Sant Cugat is a small town that mushroomed from a tiny village to a stylish town. It is even considered the most livable place to live in Spain, with its safe reputation, suitability for the family, slow pace of life, and beautiful architecture.
Many international schools are also located in Sant Cugat, including the Japanese School of Barcelona, the European School of Barcelona. The facilities fuelled the property prices in Sant Cugat, with the cheapest price 1-bedroom apartment at least EUR 200,000 to a detached house with a price tag like EUR 3.5 million.
Coupled with a low interest rate and decreasing property prices, Barcelona can offer a good investment opportunity for those with a solid financial background.
Madrid
Like Barcelona, the demand for properties for sale in Madrid is still solid in 2021, with prices now reaching a high limit. Madrid is now a good investment opportunity for those with a solid financial background. Madrid is home to the Spanish capital and the country’s central business district. This area is home to some of the most important companies in Spain, including Telefonica, Accenture, and BBVA. The employment rate in Madrid is just above the Spanish average, and the cost of living is not high in Madrid.
Madrid has one of the highest GDP per capita in the region. It is home to some of the most important high-tech companies, such as Google, Microsoft, Yahoo, and Apple. The quality of life in Madrid is very high, and the public transportation system is excellent. Madrid is still a perfect place for property investment in the years to come.
Where to buy the best Spanish Costas properties
The most famous Spanish beach is the Costa del Sol, just outside Malaga. The Costa del Sol is the perfect place to go if you are looking for an idyllic beach holiday in Spain. In the north: Catalonia, Valencia, and Castellon. Beachfront properties in Spain are costly, but there are some fantastic beach houses for sale in Spain in all the major coastal cities if you are on a budget. It means that there are still some good opportunities to find a villa for sale in Spain with a sea view. We’d like to introduce 6 Spanish costas cities: Valencia, Canary Island or Canarias, Marbella, Almeria and Torrevieja.
Valencia
In 2021, the Valencia property market is considered the craziest in Spain. In the past, there were many properties for sale in Valencia, especially for holiday homes, and you can find excellent deals. Prices for properties on the beachfront range from EUR 150,000 to EUR 750,000. But according to a news report in March 2021, properties in Valencia become highly sought after, boosted by low mortgage rates and people’s fear of price surge in times of uncertainty.
Is 2021 a good time to buy property in Valencia? According to Eurostat 2020, Valencia’s gross domestic product (GDP) has been increasing in recent years. In 2018, there was a EUR 111billion, which is 9.2% of the Spanish GDP. In July 2021, a piece of news reported by El Pais, Valencia had the third most significant job growth between April and June. The port authority of Valencia also indicates growing port activities in 2021. Valencia city is still a desirable place to buy property, given its stable economy, excellent infrastructure, and accessible transportation to many European countries.
Canarias
The Canary Islands is located in the Atlantic Ocean and is a Spanish autonomous community. The islands are one of the most favourite places for expats to buy property in Spain. Some expats have started buying property in the Canary Islands because it is a great place to live in Spain. The Canary Islands are mainly made up of volcanic rock, and very few people live on the islands. House prices in Las Canarias are relatively affordable. You can find a property that is in excellent condition for a very reasonable price.
Marbella
Marbella is famous for its luxurious resorts, and it is a place where expats buy second homes. It is known as one of the best places to live in Spain. Marbella is located in the Málaga province, and it is very close to the coast. It is a popular holiday destination, especially for those looking for a place to spend their time in the sun.
US home buyers are also setting their sight in the property for sale in Spain. Marbella is also an attractive option for US homebuyers looking for beautiful villas in Spain. Beautiful Spanish houses in Marbella draw attention as one of the most appealing options available.
Almeria
Almeria is a city which is located in the province of Almeria. It is a great place to live because it has beautiful beaches and a great climate. It is perfect for outdoor lovers. ‘And if you are an artist or a writer, you need to be in the sun! The city of Almería itself is full of reminders of Hollywood’s connection with the region. The region offers excellent beach towns with miles of sands. It is an incredible place for sun lovers. Property in Almeria is very cheap. With EUR 60,000, you can find a 2-bedroom apartment for sale in Almeria province.
Torrevieja
Torrevieja is a coastal town in Andalusia, Spain. It is located to the north of Almeria province, and its harbour is a popular fishing port for the region. The town is best known for being the starting point of the Camino de Santiago pilgrimage route. It has one of the most spectacular beaches in Andalusia. The property price in Torrevieja is very low. With EUR 60,000, you can find a 2-bedroom apartment for sale in Torrevieja province.
What to Expect for the Property Market in Spain in 2021
Let’s take a look at the property market history of Spain. The economic downturn that started in 2008 has been the main factor driving Spain’s real estate market. The 2008 crisis has led to a significant decrease in the GDP of Spain. We have seen the volatility of the Spanish property market. Spain’s housing market is now close to being balanced after being massively oversupplied.
According to Global Property Guide’s research on Spanish yields, gross rental yields on property in Spain are now moderately good. In some places in Spain, buying an apartment has increasingly become more attractive in recent years from a yields perspective. It is a completely new situation for Spain. But it only applies to the smallest-sized apartments. A news report by Reuters revealed that the Spanish economy rebounded faster than expected in the second quarter in 2021. IMF expects Spain will enjoy one of the most significant GDP rebounds of 2022. It is expected that the property market in Spain will grow by 5.1% in 2022. The property market in Spain will remain stable.
Although there are uncertainties over the Spanish property market after Brexit, Spain can attract property buyers from the US recently. Spain offers friendly policies towards foreign investment and startups and the growing interest of people choosing to move there. The property market in Spain can be viewed with a lot of optimism in 2021.
It is expected that the property market in Spain will grow by 5.1% in 2022. The property market in Spain will remain stable.
