Spanish Property Insight is commenting on a Knight Frank report that states that Spanish property buyers, and investors, are gradually moving away from the Spanish Costas and are looking towards the big cities, for more higher end properties and a better return on their investment.
In Madrid alone, sales to foreign investors account for 15% of the market which is a relative high for a city 300km and more away from the nearest coast. Sales of property in Barcelona have increased by 50% compared with a year ago, with a large proportion of that from foreign buyers. Valencia is also attracting huge numbers of foreign buyers now as rental yields on property are excellent when compared with the much lower prices.
When looking at prices, if you are at the lower end of the investing spectrum, Valencia is the place as prices are up to 50% cheaper than the two biggest cities. Whilst Madrid and Barcelona are experiencing a huge boom in the numbers of short term rental apartments, available both for tourism and for business, as the Spanish Economy starts to move more in those areas and tourists look for something different from the hotel sector.
It must be remembered that the big cities benefit from less seasonality than the Costas for foreign investors, as they are inhabited all year round. Traditionally there are two or three months of good rental yields on the Costas (except on the Canary Islands where good yields all year round can be found with a little spadework). Cities, on the other hand, have people flooding into them for work opportunities, (Work is less available in the countryside), for students and for long term rental. There is a good opportunity in the long term rental market because Spanish cannot, in general, get mortgages to buy as the banks are hugely reticent to grant mortgages still. Therefore people are forced into a situation where they need to rent and they are also looking for long term stability in their rental contracts.
One thing to bare in mind is that there are certain places where your investment for rental has to be thought out well. Barcelona has just temporarily suspended the granting of tourist licences for short term rentals. The hotel lobby is heavily pressuring ministers in the Spanish Government to regulate against sites like AirBnB and others offering short stay rentals and the tax office is tightening up on non declared rentals.
We have just got one of the last tourist licences for a couple of our clients in Barcelona so they can rent out their property in the centre, without any problems. We are now looking to find a selection of properties available in the city with licences for sale too. The fact they have a licence will make them slightly higher in price than others without a licence, but for investors, that licence is often the single most important thing. Long term rentals are not affected by the new licensing system.
If you are looking to invest in a city property just get in touch and we will see what we can offer you depending on your requirements. We have local experts in Simon in Barcelona, Pierre in Madrid, Lisa in Malaga and Graham in Valencia to offer you much more. Take a look at the latest SPM (Spanish Property Magazine) for some of our great offers and contact us on email@example.com with your requirements.