If you were planning to buy a beach house on a dreamy Balearic Island or invest to live a more metropolitan life in Barcelona, the capital of Catalonia, professionals affirm that the year 2021 is the best year for investors to buy real estate in Spain.
State of the real estate market
Among the effects of the coronavirus pandemic, the real estate market in Spain has experienced a total paralyzation of movement along with other sectors that involve foreign ties, such as tourism and hospitality. Professionals and experts expect investors and potential buyers to resume activity and raise their interest to buy real estate as 2021 nears, as they expect demand for Spanish housing to lower and therefore, decrease in price.
According to S&P Global Rating analysts, a decrease of 3.5% in 2020 will favor possible buyers; while Professor Gonzalo Bernardos from the Department of Economic Theory at the University of Barcelona predicts a shocking 13% decrease for this year. For that, experts advise that it is better to buy real estate than to sell, which is good news for international investors that are wise enough to grab the opportunity of investing in the third largest investment country in the EU, where the low cost of living, good weather, good educational system and exceptional food are guaranteed.
Also, after the Brexit, UK Nationals are evening the opportunity to migrate to another Europe country and one of the most demanded is being Spain.
Steps to buy real estate in Spain
Investors from Philippines that decide to buy real estate in Spain must obtain a NIE (Numero de Indetificacion del extranjero) beforehand, for it must appear on all documents that are signed or are issued in Spain. Also, opening a bank account in the country (if you do not have one yet) will make transactions less complicated, although it is not compulsory. For Philippines buyers that are not residing in Spain, a tax representative will be needed once you officially own real estate in the country.
Deciding on how much to spend in the purchase of a real estate in the country should be the first step, whereas real estate agents and lawyers would advise to ensure the best choice for you.
Since February of 2020, the price of a house in Spain has decreased by 0.3%, more significant in Castilla y Leon (-1.3%), Catalonia (-0.7%) and Galicia (-0.4%); whereas the Balearic Islands, Valencian Community and Madrid have mostly maintained their pre 2020 pricing. The average price range to buy real estate in most provinces of Spain is between €900 and €1,250 if you are looking forward to living in places like Barcelona, Mallorca or San Sebastian; but in provinces such as Ciudad Real, Lugo or Toledo, the prices of housing do not reach the €660 per square meter, which it is a more convenient and economical alternative where buyers can still enjoy the benefits of living in the Peninsula. From most expensive to least, the Balearics is the most high-priced region with a €3,060 per square meter average, followed by the capital of Spain, Madrid (€2,796) and Euskadi (€2,567). For the cities, San Sebastian, with a current property price of €4,545 is the most expensive, followed by the capital of Catalonia, Barcelona (€4,104).
After deciding where you want to buy real estate in Spain, whether it is a house in the city or a property in the northside of the country, and discussing with your experienced team of lawyers and real estate agents, you will be directed to sign a pre-purchase contract. The document includes the terms and conditions of the transaction, the deadline for the purchase and the signature of both buyer and seller. In addition, investors usually pay 10% of the total agreed upon price.
Golden Visa by buy real estate
For overseas entrepreneurs that want to buy real estate in Spain, a minimum investment of €500,000 in real estate will allow you to apply for the Golden Visa, which allows you and your family to enjoy its advantages, which includes the possibility to live, work and study in the country, and to travel to other European countries such as Germany and France.