Interest in real estate is returning, both on the coast and in large cities.
The beginning of 2021 was difficult. After the first year of the coronavirus pandemic, the downward trend in foreign investment in Spain seemed to have continued. However, an effective vaccination campaign has opened up more optimistic prospects, which has contributed to the overall economic recovery in Spain, especially in the real estate sector.
Along with the improvement of the health situation in In Spain, the vaccination campaign has helped ease restrictions on movement, opening borders not only to tourists but also to investment.
“Madrid, Valencia and Malaga are the provinces with the best recovery forecast in terms of investment,” explains Jesus Duque, vice president of Alfa Inmobiliaria. But other regions are also looking up. “The Balearic Islands and Barcelona are regions that are in demand among foreigners,” Duque added.
According to the expert, “buyers from Latin America, Russia, China and Central Europe find it attractive to settle in our country.” This is not news, before the covid pandemic, citizens of these countries also showed great interest in Spain. However, now they are also “driven by the benefits of remote work,” says Duque.
The revival in the real estate market has led to an increase in real estate prices in these regions. But this is not a problem for foreign investors. Duque explains that “this public is willing to buy real estate to their liking, without paying much attention to its price.” In fact, according to the expert, this “contributes to the growth of real estate prices” in general.
Luis Corral, CEO of Foro Consultores Inmobiliarios, confirms Jesus Duque’s words. “During the summer, there has already been increased interest from foreigners, not only on the coast, but also in large cities or in the urban area of coastal settlements,” the expert says. Among the main reasons for this, he clarifies, “remote work and the need for more open spaces.”
This is a trend that we also see among local investors who are looking for a home “not only for vacations, but also for long-term living or even remote work,” adds Luis Corral, who explains that local and foreign investors “together play a special role in this recovery.”
British pensioners and Brexit
Of course, apart from local investors and overseas buyers, there is a unique case of British investors. Two important factors converge here: the covid pandemic, which affected them as much as everyone else, and, of course, Brexit.
According to Luis Corral, “Brexit has already been taken into account.” This means that the consequences of this political decision have already begun to manifest themselves in the market. Remember that British citizens, and especially British pensioners, were the foreign nationals who contributed the most to real estate investments in Spain. Now the situation has changed, and many of them are selling their real estate.
According to the College of Registrars, in the second quarter of 2021, the British continued to lead in the investment rating. However, they also showed a significant decrease, accounting for 9.5% of the total number of purchases, which is probably partly due to travel restrictions. However, since August 20, they have been able to travel again, and Corral claims that “demand has decreased, but it is growing again.”
If we compare them with data from previous years, then in 2010, investments by British citizens reached 35% of home purchases in our country, so 9.5% is a significant decrease.
However, it should be noted that British investments before Brexit were focused on transactions in areas such as Costa del Sol, Costa Blanca and the Canary Islands. Now, foreign investors seem to be eager to invest not only in these areas, but also in other areas.
What will happen in the short term?
Luis Corral is optimistic and claims that since the beginning of 2021, “there has already been a moderate recovery” in the real estate market, which will undoubtedly continue in the coming months. He believes that the growth of “interest in buying or renting a second home” has begun, both from foreigners and compatriots. For this reason, investors will look for “houses that allow you to work many kilometers from the office.”
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