Best Places to Buy a Property in Spain in 2019

The main trends in the Spanish real estate market and the most commercially attractive property locations: top Spanish coasts, islands, regions and provinces.

Current tendencies of the Spanish real estate market

The main trend in the residential real estate market in Spain is the return of sales to the pre-crisis level (2007).

Presented by Sociedad de Tasacion, the report shows the upward tendency in the Spanish residential market for the past 3 years, displaying an impetus that has been strongly driven by the boom in the capitals of the major regions of Spain.

1. Strong growth of sales

In the first quarter of 2018, according to the Ministry of Development and the National Institute of Statistics, 134,705 housing units were sold in Spain, indicating an increase of 8% compared to the same quarter in 2017.
16.7% were transactions involving foreign customers, according to PropertyShowrooms.

Although British investors remain the largest group of foreign customers, they are being overtaken by residents of the Scandinavian countries and Belgium.

According to the latest data from the Spanish National Institute of Statistics, the volume of real estate transactions in June 2018 in the whole country was 2% higher than in 2017.

By regions, the most noticeable growth in demand was recorded in Rioja (59.1%), Murcia (50.2%) and Castile-La Mancha (48.7%), and the lowest in the Balearic Islands (13.8%), Basque Country (16.5%) and Cantabria (17.8%).
Spanish real estate market in 2018
These studies are based on transactions registered by the Spanish Land Chamber (43 608 transactions in June 2018).

2. The cost of housing is rising

In addition to the amount of transactions, the prices for residential and commercial real estate are also going up.

Data from the National Statistical Institute shows that the average property price in Spain increased by 7.2% in 2017, whereas in the Madrid community, Catalonia and the Balearic Islands it even surpassed this number. Barcelona was the province where the price went up the most: real estate price in the capital of Catalonia grew by 10.2% according to Iberian Property.

In the Balearic Islands and Madrid, the cost of property increased by 7.5% and 6.9% respectively.

On average price for 1 m² in Spain grew by 9.2% from August 2017 to August 2018. In August 2018 the average price for 1 m² is 1697 euros.

Property prices in Spain by cities
Regarding the investor risk, Madrid and Barcelona are considered to be the safest real estate markets at national level, followed by Valencia and Seville with a low-risk classification.

Experts predict that the increase of housing costs in Spain will continue at least for the next three years and the fastest growing properties will be in Madrid and Barcelona.

According to the estimates of the JLL consulting company, by 2021 residential real estate can rise in price by 3.8%.

Experts emphasize that the increase in prices contributes to active construction with a shortage of land in major cities and regions, such as Madrid, Barcelona, Costa Blanca, Costa del Sol, the Basque Country and the Balearic Islands. In addition, amid the imbalance of supply and demand, rental rates are expected to grow.

3. Growing profitability

Buying a property for rent in Spain remains a lucrative investment and shows a very high level of profitability.

The study of the Idealista showed that the return on investment in residential real estate increased from 7.3% in 2017 to 7.8% in 2018, due to the increased demand for rental housing. At the same time, experts note that it is profitable to invest not only in housing, but also in the purchase of commercial units, offices and garages.
Top cities on the profitability of investment in housing
Las Palmas de Gran Canaria - 7.7%
Lleida - 7.7%.
Murcia - 7.2%
Huelva - 7.2%
Santa Cruz de Tenerife - 6.8%
Almeria - 6.7%
Madrid - 5.2%.
San Sebastian - 4.3%
La Coruña - 4.4%
Ourense - 4.4%
Zamora - 4.6%
Barcelona - 4.7%
Housing in the Spanish secondary market from April to June 2018 went up by 2.7%. The average cost per m2 was set at 1664 euros. This is a sharp improvement compared to a fall of almost 2% over the same period in 2017, according to TINSA.

Top-5 Spanish Coasts in terms of transactions growth

Top Spanish Regions for purchases by foreigners

Real estate demand is distributed unevenly across the country. In some areas the majority are Spaniards, in other parts of Spain the majority are people from all over the world that seek to settle here, usually it is the coast of Spain. Below is a list of the most sought-after Spanish provinces among foreigners. This percentage shows the share of foreign purchases from the total number of real estate transactions in 2017.
Top Spanish Regions for purchases by foreigners

Top-5 Spanish Coasts and Islands for purchases by foreigners

The Valencian Community

In the first quarter of 2018, the share of foreign customers in the region of Valencia was 26% which accounts for 52365 transactions.

Covering a fourth of the real estate market (according to Spanish Property Insight), foreigners have a significant impact on it. Sales of housing in the autonomous region of Valencia in the spring of 2018 increased by 35.5% and reached the best rates since January 2007.
The indicators improved both for the secondary market and for new buildings. At the same time, 83% of transactions account for the secondary market.

The average cost of housing in the provinces is: 103 thousand euros in Valencia, 120 thousand euros in Alicante and 50 thousand euros in Castellón.
Costa Blanca
A very affordable coast, therefore making it very high in demand for real estate. Customers come here with varying budgets: both modest and serious ones. This region attracts many potential clients with a large selection of new housing available at affordable prices - considerably lower than in Catalonia or Andalusia. Warm sea and the opportunity to enjoy affordable multilingual services are also important arguments for choosing this coast.

80% of the foreign demand in the region falls on the province of Alicante, namely the North and South Costa Blanca. Alicante, Torrevieja, Ciudad Quesada, Orihuela Costa, Calpe, Denia, Finestrat and Benidorm are considered ideal places to buy a bargain villa or apartments in Spain.
Costa del Valencia
Diverse luxurious beaches, historical and cultural monuments are the main attractions of this coast. All the resort destinations here combine the traditional flavor of ancient Spain and modern infrastructure. This coast is also distinguished by affordable prices for real estate. Investors and tourists usually buy property in Oliva, Gandia, Cullera, Sagunto and of course Valencia.
Costa del Azahar
This is a new developing destination for foreign tourists. The coast has already established itself as a place with bargain property opportunities and newly built housing. The opportunity to spend a great time with the family, surrounded by a high-level coastal infrastructure attracts more and more customers every year. The most popular places are Oropesa del Mar, Marina Dor, Viñaros, Peniscola, Benicassim, Benicarlo.

Murcia

Costa Calida

The region with rich history and ancient Roman sights in Cartagena, this beautiful old town in Murcia is offering excellent infrastructures and services. Just like Costa Blanca, the coast has an affordable real estate market. The greatest request for property here is in Murcia, San Pedro del Pinatar, La Manga de Mar Menor, San Javier, Cartagena and Los Alcazares.

Catalonia

Barcelona

Barcelona is obviously on top! As always, the districts near the sea are in great demand: Diagonal Mar, Poble Nou, Vila Olimpica. In the central part of the city — For example, in the upper region of the city — Pedralbes, Sarria, San Gervasi. Barcelona attracts everyone, but, unfortunately, real estate here is very expensive: around 4400 euros/m2.
It is very difficult to purchase an apartment in the listed districts for around 200.000 euro. Even the cost of one parking space in Barcelona is 25.000 — 30.000 euros, on Paseo de Gracia you can even find car parking spaces for 60.000 euros!
Costa Brava
The most popular destination in Catalonia after Barcelona has unique nature, with beaches of exceptional beauty, clean shores and France at its borders. The region impacts everyone: both people with a modest budget and ones who seek a luxury lifestyle. On the downside, there is a lack of new and modern housing by the sea here; more and more customers agree to purchase a plot of land or an old house for demolition to implement their own projects. With our experience, due to the shortage of new residences, many customers consider buying housing in Marbella, as an alternative to Costa Brava.
Costa Dorada
The coast is famous for its picturesque bays and beautiful seafronts. Unique golden beaches and shallow waters with a gently sloping entrance is ideal for a family holiday. Popular cities are Tarragona, Salou, Cambrils and La Pineda. On the whole, the coast is popular among wealthy tourists and investors.
Costa Maresme
It is part of the province of Barcelona. A favorite place to spend a weekend for Barcelona residents. Property prices are slightly compared to the rest of Catalonia - about 2000 euros/m2. The coast has long sandy beaches, many of them have a flat entrance to the sea and thus are suitable for families with children. Important resorts are Calella, Alella, Sant Pol de Mar, Canet de Mar, Arenys de Mar, El Masnou, Premiá de Dalt.
Costa del Garraf
The coastline is 50 km south of Barcelona. Property prices are similar to general Catalan properties, slightly over 1900 euros/m2, the only exception is Sitges: the average price here is more than 2500 euros/m2. This location is a perfect climate for any occasion with its beautiful beaches. Not really suitable for a relaxing family holiday, since Sitges is a city for active night life lovers. The most attractive cities are Sitges, Castelldefels and Vilanova i la Geltrú.

Andalusia

Costa Del Sol
Marbella and its neighborhood attract those with budgets above the average. Demand is stable, what is more, the latest trend show the switch of attention from Catalonia to this region. Mostly because the price-quality ratio here is higher. Here, in Golden Mile and Estepona you can find modern villas with direct access to the beach, which is almost impossible to find on the Costa Brava.

Other popular destinations on the coast are: Malaga, Fuengirola, Benalmadena, Calahonda, Casares, Mijas, Nueva Andalusia, Puerto Banús, San Pedro de Alcántara, Torremolinos.
Costa de la Luz
The cost in this location is popular among enthusiastic surfers, kite surfers and other water sport lovers. Costa de la Luz is characterized by its high prices for real estate and consisting mainly of housing from the secondary market. If you want to buy a luxury house here — be ready to spend over 3 million euros! Most-visited cities are the following: Cadiz (the most ancient Spanish city), San Roque, Tarifa, Huelva, Sotogrande, Chiclana de la Frontera, La Alcaidesa.
Costa de Almeria
This 200-kilometre coast is considered the youngest resort destination in Spain. Prices for real estate are about 1500-2000 euros/m2. There is an extremely high level of services in this promising resort with a good ecological situation and amazing beaches. Suitable for those who prefer a relaxing holiday in an atmosphere of unique nature. If you want to buy a property there, consider visiting Almería, Roquetas de Mar, Aguadulce, Águilas, Adra, El Ejido, Mojácar, Carboneras, Pulpi.

Top Spanish Islands for purchases by foreigners

The Balearic Islands

Mallorca
Mallorca is one of the most sought-after resorts in Spain. Beautiful beaches, picturesque landscapes, warm sea and high-class service attracts tourists of all ages and interests. The average price of 1 m2 is around 2000 euros. Popular resorts are Palma de Mallorca, Santa Ponça, Andraitx, Costa den Blanes, Calvia, Marratxi, Llucmajor, Costa de la Calma, Es Camp de Mar, Palmanova, Ses Illetes, Sol de Mallorca and many other coastal communities.
Ibiza
The island is well known for its nightlife and the loudest live performances of the worlds most popular DJs. Despite the resort owning the name as the craziest party place on earth, many well-off Europeans enjoy buying real estate in exclusive residences with a sea view here. The average price is close to 3000 euros/m2. Most desirable properties are in Ciutat d'EIvissa, San Antonio, Santa Eulalia del Rio, San Jose, Roca Llisa and Vista Alegre.

The Canary Islands

Tenerife

On the largest island of the archipelago you will find literally everything: from the volcanic landscape of the Teide mountain reserve to the spectacular resorts in the south of the island with its picturesque coastlines, fantastic sandy beaches and World Heritage sites. 1 m2 of the apartment in the secondary housing market of the Canaries costs around 1300-1500 euros.

If you are planning to buy a property in Tenerife, then we recommend considering the south, namely the cities of Las Americas, Costa Adeje, Los Cristianos, Los Gigantes, Costa del Silencio, Golf del Sur, Amarilla Golf, El Medano. In the north of the island the most-visited places are Puerto de la Cruz, Garachico and Candelaria.

Top-15 Spanish provinces where foreigners buy property

Listed average prices are relevant for the provinces. In the capitals of the provinces average property prices are usually higher.
In conclusion, for the past year:

  • The number of transactions on the Spanish housing market increased by 8%;
  • Average property price grew by 9.2%;
  • Top-3 places for foreign investors are the province of Alicante, the Balearic and the Canary Islands;
  • Expected increase in property prices in 2018 is up to 14% compared to the average in 2017.

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