Properties for sale Javea, the Spanish property market has many quirks, and it pays to do your own property market research before buying a house in Spain. Knowing what to expect when buying a property in Spain can help reduce any pitfalls of setting up your life abroad.
The Spanish property market
Spain has been badly affected by the global financial crisis and a property market crash. Since 2008, Spanish property prices have fallen by 30 percent overall, with some regions even worse off. Individual properties are selling for as little as half their 2007 price. Property prices remain low and are falling, which means that although the price drop can be a boon to new arrivals, making property more affordable, there is a strong risk that your home will lose value before the market picks up again.
Over 80 percent of Spanish residents own their own home, with around 50 percent of the population owning their home outright, without a mortgage. As many sellers are looking to recoup as much of their investment as possible, haggling can be drawn out and the market slow. However, with few buyers around, you may find you have your pick of bargains.
Should you rent or buy in Spain?
Rental opportunities can be limited in Spain as people prefer to buy, and with property prices low you may find you have more choice to buy than to rent. That said, prices for desirable, convenient, city centre properties are similar to those in other European countries such as Germany, Belgium or Ireland, although prices are predicted to fall further in 2014. Waiting may allow you to buy at a better price and in a more stable market.
The transaction costs of buying and selling a property in Spain are moderate, at around 15 percent of the property value. This means that even if property prices rise during your stay, you’ll probably need to live in the property for around three years to come out ahead in a strictly financial sense.
Are foreigners allowed to buy property in Spain?
Yes. There are no restrictions on buying property in Spain, whether it’s commercial, residential or land. In fact, Spain encourages investment by foreigners, both resident and non-resident. You will require a financial number which can acquire by visiting a police station with your passport. This is typically done on the day for Spanish or EU citizens but may take a few weeks for others.