2023 Spanish Real Estate Market
Spain has become an attractive country for foreign investments in recent years. With a ranking as the 13th best place to invest globally, the year 2022 saw foreign investments reaching one of the highest figures at 34.2 billion euros. A significant portion of these investments primarily targeted tourism, trade, and real estate. With Spain being the 4th largest economy in Europe and the 14th country with the highest GDP worldwide, the potential returns and the ability to ensure investment stability and sustainability make it an appealing investment hub.
Spanish Real Estate: A Profitable Investment
In 2022, Spain's investment returns, particularly in real estate, demonstrated a consistent and remarkable growth. This consistency may be viewed as an early indicator of how the market will shape in the coming years, potentially into 2023.
The number of units purchased by foreigners increased by nearly 20% more than in preceding years. Not only was there a surge in demand, but a significant increase in property value per square meter was also observed. The escalating real estate values and housing prices have stimulated the entire market dynamics, including second-hand and off-plan properties.
The Valencian Community accounted for 23.9% of the total real estate sales to foreigners, a considerable percentage considering the existence of a total of 17 autonomous communities in Spain. Valencia was followed by Andalusia with 15.2% and Murcia with 13.1%. Let's delve into the best locations in Spain for foreigners to invest in real estate.
Preferred Locations for Investment in Spain
While the cultural capital Barcelona or the official capital Madrid may seem like the most promising places to invest in real estate, it might be better to consider next-generation investment regions for a more sustainable investment with a clear future.
The choice of where to invest in real estate can be tricky. Barcelona and Madrid undoubtedly stand out as significant tourist destinations, entertaining thousands of tourists every year. They could be ideal for establishing a business.
However, when it comes to real estate, various factors impact the future of the investment. These could include modernity, fixtures, construction quality, location, and more. Since these cities are well-established, the real estate options might be quite limited. Also, the best properties might be a bit too expensive when measured against their qualities.
Following the Covid-19 pandemic, Spain's smaller regions began attracting attention as the best places to invest. They have become quiet but steadily developing urbanizations. Especially from Costa Blanca in the north to Costa del Sol in the south, new residential areas started gaining popularity.
Why Foreigners Choose To Invest In Spanish Real Estate
Foreigners usually opt to invest in real estate in Spain while purchasing property abroad instead of other European countries. Spain is more affordable, profitable, and offers numerous advantages.
Spain provides one of the best immigration programs across Europe, which can be acquired by investing in real estate. The Spanish Golden Visa program also enhances Spain's popularity among foreign investors. Foreigners can acquire Spanish residence through the Golden Visa, allowing them to study, live, and work in Spain.
The Golden Visa program is a significant promoter of buying real estate in Spain for non-residents. Apart from residence in Spain, Golden Visa holders also benefit from visa-free travel. Golden Visa holders can travel within the Schengen zone without a Schengen visa, which is a significant advantage. This is why non-EU citizens form a substantial part of the real estate investor profile in the Spanish real estate market.
Who Buys What: Investment In Spanish Real Estate By Nationality
The profile of the foreign investor can be split into two. The first group comprises non-EU citizens seeking a means to obtain a permanent residence permit in Spain. The second are EU citizens looking for better living conditions and opportunities in Spain.
Spain stands out as an attractive place for second-home owners in Europe. It is the perfect place for individuals planning to pursue a more comfortable and relaxed lifestyle, primarily due to the delightful climate. The sun shines an average of 300 days in the sky, making Spain an attractive destination for a joyful lifestyle.
Additionally, the healthy environment and affordable living conditions make it easier to pursue an active yet easy lifestyle. Even EU passport holders, who do not require a Golden Visa, opt for these reasons to buy their second home in Spain.
EU citizens usually search for comfort that they cannot get in their own home. This is why the most demanded properties bought by Europeans are detached houses with open gardens and swimming pools.
Non-EU citizens, on the other hand, have a different perception of investing in Spain, namely obtaining a golden visa. American citizens are the primary investor profile with 27.7%, followed by British citizens with 17.8%.
Non-EU investors are usually more flexible when it comes to the type of real estate. Indeed, properties like flats in extensive complexes or houses take up the majority of their investments with 28.2%.
Final Thoughts
Investing in Spanish real estate is a promising and profitable venture, particularly for foreigners. However, it's essential to be strategic and informed about the best locations and types of properties to invest in.
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