Why buy a property in Spain?
Like any property purchase, buying a property in Spain is a big investment. So why would you do it? Well, it’s a unique blend of climate, culture and opportunity that make Spain a great choice.
Buy a property in Spain and you can swap the 1,500 hours of sunshine that the UK averages per year for the 3,000 hours that the Costa del Sol gets.
Retirees can enjoy lower living costs – Spain has consumer prices roughly a third cheaper than the UK and 60% cheaper than the USA – and weather in which you can play golf, swim or just sit outside comfortably all year.
Holiday homebuyers can benefit from flights that arrive from every corner of the globe, all year. Much of Spain’s coast enjoys a 12-month season, while in its exciting and cultural cities the evening has barely got started by 9pm.
Investors in property benefit from all of the above, with more than 120 million international visitors arriving by plane, car, train and ferry each year.
The climate and lifestyle benefits of Spain
The most obvious reason is to take advantage of the Spanish climate and environment. Sunshine, beaches, mountains and countryside – Spain has it all.
- Sunshine
Being further south, Spain not only enjoys twice as much sunshine as the UK, but it’s spread throughout the year. Even in December Spain has two hours more daylight in the evenings. The effects on one’s health – both physical and mental – are hard to calculate, but it certainly allows for an extra round of golf or a swim after lunch.
- An outdoor lifestyle
It’s not just because of the weather that people in Spain spend more time outdoors. The culture and general schedule of the country promotes being outside. Whereas British high streets may be deserted by 7pm, the evenings in Spain are a time to see and be seen. The paseo is a leisurely evening stroll, with a drink or ice cream, maybe a bit of shopping, a chat with the neighbours and a chance for the kids to run around in the warm, fresh air.
- Care of the environment
Spain has more than 730 Blue Flag beaches and marinas, awarded not just for cleanliness but also for general care and accessibility. No other country comes close.
- Family life
When the Organisation for Economic Cooperation and Development (OECD) compared happiness and wellbeing in the world’s 34 major industrialised countries, Spain was above average for work-life balance, safety and community. It’s a country where kids tend to be happy and occupied too. In one OECD study Spanish youngsters were happier and less stressed than in almost every other country, especially the UK. This was despite them performing generally better at school.
Cultural and recreational opportunities
Spain’s cultural heritage has many rich influences, evident from the Roman aqueduct at Segovia and the glorious Alhambra in Granada. It was the global superpower 500 years ago and has a wealth of history, traditions and customs in 47 UNESCO World Heritage sites. Its UNESCO “intangible” heritage includes flamenco dancing, Cordoba’s fiesta of the patios and the Mediterranean diet. You need never be bored in Spain.
A feast for the senses
Spain is a country where people literally dance in the street, with local fiestas throughout the year. For eating out, Spain has more Michelin stars than the USA and the UK. And for a pre-dinner drink, Spain has more than 60 bars and pubs per 100,000 people[1]. That’s the second highest in Europe and compares to fewer than 40 in the UK.
Spanish cities
Each of Spain’s cities has a life of its own, from the cool and class of Catalonian cities like Barcelona to the heat and colour of Andalusia’s Seville, Cordoba and Malaga. Each is buzzing with life and filled with world-class museums such as the Prado in Madrid, Guggenheim in Bilbao and Picasso Museum in Barcelona.
Art abounds
While Spain gave us the wonders of Picasso, Goya, Dali and Velázquez, not all of Spanish art is in a gallery. From the fallas of Valencia to the outrageous architecture of Antoni Gaudí, you can live and breathe art in Spain.
Investment potential in the Spanish property market
A property investment offers two ways of making money. The first is from the rising value of the property – the capital gain. The second is from rental income.
Property in Spain has offered excellent returns on both accounts in recent years.
Low Spanish property prices
Spanish property values have risen significantly.[2] Since 2000, there have been some ups and downs in growth, but in the past 25 years only the years immediately following the global financial crash experienced any losses.
In the decade since 2014 property values rose steadily and a decade later were 50% higher. [3]
However, properties in Spain are still affordable. The Property Guides Cost of Sunshine Index compared affordability across European tourism hotspots and found that the Costa del Sol was mid-table for prices.
Savills Prime Residential Index for second home locations[4] found that while Marbella was in 17th place, it was less expensive than the French Riviera, Tuscany, Phuket and Costa Smeralda amongst others.
At the bottom end of the market, you can find a liveable home in Spain for €25,000. If you are willing to renovate, Spain still offers incredible opportunity. Even in tourist hotspots, property can be found for as little as €50,000.
Good Spanish rental returns
The latest data on the Spanish rental market shows that the average rate of return in the past five years has been between 6.5% and 6.8%[5].
Spain, like most countries, is attempting to control the over-supply of residential property for tourist lettings, but it is still possible to secure a rental property in most locations, subject to getting the correct licence.
Spain also offers a 12-month market in many areas. As the tourists of high summer leave, so the “snowbirds” from northern Europe arrive. With non-EU citizens able to spend 90 days at a time in Spain without a visa, mid-term lets offer opportunities for investors.
Spain’s booming tourism
Spain’s strong tourism sector offers a huge opportunity for investment buyers and second home owners to create value in their investment and an income stream.
Accessible all year
Most of Spain’s regional airports stay open and busy all year, unlike those in rival tourist hotspots. For example, in the off season of October to March, Mallorca’s airport was due to receive 48,000 flights[6], while Crete’s Chania airport, in Greece, serving a similar sized population, was due to receive fewer than 7,000.[7]
Tourism demand
That creates demand, and Spain gets tourists all year. According to EU data[8], in August 2023 Spain had 25 million arrivals, while Greece had 8 million. However, even in winter Spain still has some 14 million arriving (less than a 50% drop) while Greece drops below 2 million – 75% drop.
Are there any reasons not to buy in Spain?
Potential “cons” of buying in Spain are few and far between.
Retirees may be worried that climate change could make life too warm in summer. Temperatures in southern Spain hit a record-breaking 45°C in the summer of 2022. Nighttime temperatures did not drop below 27°C in some cities for over 40 days.
For investors, a repeat of the mistakes during the global finacial crisis seem unlikely. The global financial crisis certainly hit Spain hard, with many investors overleveraged and needing to “flip” properties rapidly, and with developers running out of money.
While many people did lose money in those years, the end result was a serious rethink among Spanish leaders. Now, property laws have been tightened significantly and the world of Spanish property has never been safer.
[1] https://www.rte.ie/news/2024/0417/1443978-alcohol-ireland
[2] https://fred.stlouisfed.org/series/QESN368BIS
[3] https://www.globalpropertyguide.com/europe/spain/price-history
[4] https://pdf.savills.com/documents/Prime+Residential+Index+-+World+Second+Home+Locations+2023.pdf
[5] https://www.statista.com/statistics/1198873/profitability-investment-rental-residential-property-spain/
[6] https://www.majorcadailybulletin.com/holiday/airport/2023/09/24/117317/mallorca-flights-record-number-scheduled-over-the-winter-season.html
[7] https://www.chq-airport.gr/uploads/sys_nodelng/2/2873/Chania_12_Traffic_2023vs2022.pdf
[8] https://ec.europa.eu/eurostat/databrowser/view/ttr00016/default/table?lang=en