In Spain, you can buy real estate with cryptocurrency, but you won’t be able to do it with cash. Elena Bekisheva, Development Director of the Alegría Group of companies (real estate agency, center), told us about the innovations in the Spanish market, as well as where the cheapest real estate in Spain is for sale, in which regions it is better to buy housing for yourself and in which for investment, what taxes and mortgage rates to expect services and developer in Spain).
About sales volumes and market trends
— What are the latest news/changes in the Spanish real estate market?
— In general, there are positive trends in the Spanish real estate market: price growth continues, but at a moderate pace, which eliminates the risk of a bubble.
The main news in recent months has been that Euribor, which has not stopped growing throughout 2023, collapsed to 3.679% by the end of December. This should lead to a decrease in the cost of mortgages. The decrease in Euribor is primarily due to the fact that the European Central Bank has stopped raising key rates since October last year, which had previously been revised upward for 10 consecutive months.
— How has the demand for real estate in the country changed recently, say, in a year or two? What are the current sales volumes of housing?
— The volume of real estate sales in Spain in 2023 decreased slightly compared to 2022, but the indicators are still at a very high level. At the same time, the Valencian community and, in particular, the Costa Blanca region are among the leaders in terms of sales.
There is an increase in the number of buyers who immediately deposit the entire amount, rather than take out a mortgage. This trend is especially noticeable among foreigners. Foreign buyers generally behave more and more actively every year, buying housing in Spain both for living and as an investment.
— What trends have appeared in the market that you have not noticed before?
— The demand for luxury real estate is steadily growing, mostly among foreigners. The innovation is the purchase of real estate for cryptocurrency. I think this option will gain great popularity soon — for example, we have already conducted several such transactions.
This process takes place in several stages:
- preparation of customer data;
- wallet verification — AML-verification and verification of financial documents (verification by the exchange and notary);
- the technical part of the transaction is the exchange of cryptocurrency in euros through an intermediary — a crypto exchange, taking into account all taxes and commissions, as well as the transfer of euros to a notary or a developer;
- signing the purchase and sale agreement with a notary.
This process also requires confirmation of the origin of the buyer’s funds, as in a normal transaction. The term of the transaction itself also does not differ — up to 3 months. The option of buying real estate through cryptocurrency is more often resorted to by those who have a number of restrictions on opening a bank account in Spain, withdrawing funds from their country, etc.
— What problems are there in the Spanish real estate market? Maybe there are pitfalls that should be considered when buying a Spanish property?
— In general, I don’t see any pitfalls or specific problems. I think that the risks of buying may be the same as in other countries. I recommend contacting real estate agents you trust to avoid them.
Today, real estate in Spain is considered one of the most reliable investments, there is even a term — a safe haven asset. The real estate market in the country is stable, political and economic instability is also not observed.
I can point out, rather, not the problem, but the tendency of increasing demand in relation to supply. If you liked the property, then you should book it right away, since tomorrow, most likely, it will no longer be on sale. The market is now quite “hot” for demand.
And I see this even inside our company, which is considered one of the largest on the coast of Spain. When a new interesting object appears, there is even competition among our sales departments. The most “delicious” offers are sold immediately according to their customer base, without entering the market. This is often facilitated by the possibility of remote purchase of real estate in Spain without the arrival of a buyer. We make more than 50% of the total number of such sales.
Well, I think it’s worth mentioning the phenomenon of “payback” in Spain. However, the fear in this regard is greatly exaggerated. Firstly, squatters prefer real estate that has been empty for a long time, mainly banking, and secondly, you can always protect yourself by installing security systems, armored doors and other things. The occupiers are simply not interested in such housing.
About housing prices in different regions of the country
— Which objects, in general, are in constant demand in Spain?
— Inexpensive properties on the secondary market with one or two bedrooms, in areas with good infrastructure, preferably not very far from the sea, are in constant demand. Also, the demand for new buildings is growing every time — we see this in the number and speed of reserves of housing under construction.
The fact is that there are not enough new buildings in Spain, and the demand for them is high, and people tend to book housing in the early stages of construction at a bargain price.Among our sales are most of the objects with a completion date of 2025-2026. We also see a stable demand for luxury housing, and it is growing every year.
— How much does the average cost of housing in Spain in different regions of the country?
— The average cost of real estate in Spain in January 2024 was €2,049 per sq.m.
In the Valencian community — €1,794 per square meter, in the city of Valencia — €1,411, in the province of Alicante — €2,077, in the city of Alicante — €1949, in the city of Torrevieja — €1,816.
On the Costa del Sol, the situation is as follows: the autonomy of Andalusia — €2081 per “square”, the province of Malaga — €3099, the city of Malaga — €2687, the city of Marbella — €4510.
In the Madrid region, the price per square meter is €3247, and in the city of Madrid — €4190.
Community of Madrid, Balearic Islands (€4,148 per 1 sq. m.m) and the Basque Country (€2,867) are the most expensive regions of Spain to buy real estate, while Castile and Leon (€1,178 per square meter), Castilla La Mancha (€917) and Murcia (€1,192) — the most affordable.
Rising prices, demand and too high risks of being evicted. Analysis and trends of the Spanish real estate market. Analytics from REALTING
— Cheap real estate in Spain — what is it like? And where can I buy it?
— If we talk about inexpensive real estate, it is very difficult to give an unambiguous answer, because everything is relative.
It is safe to say that the days when it was possible to buy a studio or apartment in Spain for 30,000–40,000 euros are in the past — now we are talking about amounts 2-3 times larger. It is quite difficult to find affordable and at the same time decent real estate in Spain right now, because the demand for such housing is very high, and really decent properties are sold in a matter of days.
If we talk about locations, the ideal place to buy inexpensive real estate can be Torrevieja and other towns like it on the Costa Blanca, such as Guardamar del Segura or the Orihuela Costa area. Here you can find both inexpensive apartments with 1-2 bedrooms and small bungalows at an affordable price. At the same time, the sea, beaches, and excellent infrastructure are nearby.
If we take simplified figures and the minimum budget for buying real estate in Spain (studio or one-bedroom apartment), then the cost varies greatly by city.
I will give examples of the minimum budget for the purchase of liquid housing in the cities where we make more sales: in Torrevieja it starts from 85 thousand euros, in Alicante — from 100 thousand, in Benidorm and the surrounding area — from 180 thousand euros, in Valencia and Malaga — from 200 thousand, in Marbella and the surrounding area — from 250 thousand euros.
— In which regions is it better to buy a house for yourself, and in which regions is it better to invest?
— It all depends on your preferences. Someone wants to live in a big city, and someone in a cozy small town; for someone, the sea is important, but for someone it is by no means an obligatory requirement.
If you are looking for a property to stay with your family the first thing you should pay attention to is a good infrastructure (schools, hospitals, clubs for children, etc.); in addition, you need to make sure that the area belongs to the prosperous, and you will not have problematic neighbors.
Among those who have a small start-up capital, we observe a high demand for buying real estate “for themselves” in Torrevieja and the surrounding area. We are seeing a big jump in customer requests in Valencia: it attracts young immigrants, as well as families with older children, for whom there is a prospect of admission to university.
Above-average income buyersThey choose the Costa del Sol and the surroundings of Marbella. This is due not only to the cost of housing in this market, but also to the availability of the best private schools, an abundance of sports facilities and schools, tennis courts, golf courses and all kinds of entertainment, as well as the prestige of this place, known internationally.
— The development of infrastructure also applies to investment real estate, but here it is worth distinguishing whether you plan to rent housing for a long-term or for a tourist lease.
For example, TorreviejaIt is perfect for both long-term and tourist rentals, as it has a very good location and has experienced extremely high demand for rental housing in the last two years. Here, as I mentioned, the starting price of an apartment for rent is 85 thousand euros.
In Benidorm, you need to decide whether you want to rent housing to families or tourists — the choice of the area depends on this. In Marbella, Estepona, Benalmadena on the Costa del Sol, there are no openly disadvantaged areas for buying rental housing.
In cities such as Calpe, Altea, Denia, it is good to live temporarily, enjoying the beautiful nature and tranquility of the resorts, but you can also choose objects for rent (considering that prices here are much higher than, for example, in Torrevieja).
MadridIt is well suited for investments in profitable real estate — apartments and apartments for business people, digital nomads, students. However, the amount of investment here is much higher than in cheaper areas. But the profit is also greater.
— How are things with utility bills in the country? Can we give some examples?
— Utility bills in Spain are electricity, water, gas, garbage collection, payment for the community*. Detached houses do not have a communal area, respectively, and there is no payment for it. The amount of the fee for the community depends on the availability of various facilities on the territory of the residential complex: swimming pool, sauna, gym, etc.
The average fee can be 50-300 euros per month in the Costa Blanca region and above – on the Costa del Sol in elite gated protected urbanizations*.
Electricity in Spain is not cheap, but by standards EU prices are quite affordable — from 80 euros per month and above. Water — about 150 euros for 3 months. The garbage collection fee is 30-150 euros per year.
* Comunidad (Spanish: comunidad) is a community of homeowners in an apartment building or a complex of such houses. The Comunidad has an elected governing body that makes decisions on the management and maintenance of common property — entrances, elevators, house territory, etc. The members of the comunidad pay monthly dues for the maintenance and repair of common property.
* Urbanization (urbanización) is a gated residential complex that can be located both within the city limits and outside the city. It consists of a group of houses surrounded by a common house territory. As a rule, this is a protected area with amenities such as swimming pools, recreation areas and sports fields.
About buying real estate, taxes and mortgages
— Is it possible to buy a property in Spain without citizenship? In general, what do you need to buy a property in Spain if you are a foreigner?
— Real estate in Spain is available to almost everyone — it can be purchased both without citizenship and without a residence permit.
You need to provide documents proving official income, get a foreigner identification number (NIE) and open an account with a bank of Spain. It is impossible to buy an apartment in Spain for cash.
Important. Currently, Russians and Belarusians do not open bank accounts, so the purchase of secondary real estate is possible through cryptocurrency and several other tools.
— What taxes should I expect when buying and owning real estate?
— The main taxes paid by the buyer of residential real estate in Spain include VAT (IVA) in the amount of 10% — paid when buying a new building, and property transfer tax (ITP) — when buying a second home (7-10%, depending on the region).
The list also includes stamp duty (IAJD) and state duty for registration of a purchase and sale transaction in The property register. It will take 3-4% of the total cost.
The main tax for property owners is the annual real estate tax (Impuesto sobre Bienes Inmuebles (IBI)). It is accrued and paid according to a single scheme by residents and non-residents. The rates are set at the municipal level: from 0.3 to 1.3% of the cadastral value of the object.
— Which of the foreigners buys real estate in Spain most often?
— According to the sales analytics of our company, which works with customers in 20 languages of the world, a large volume accounts for buyers from the UK, Poland, Ukraine, Finland, France, as well as the Baltic countries — Latvia and Lithuania, in particular. The demand of the latter has increased significantly in the last two years due to political and economic circumstances.
We maintain a high level of sales among buyers from the USA and Canada. More often, clients from these countries purchase housing for the purpose of moving and living on their own, justifying the high cost of living, real estate and high taxes in their countries. The same thing happens with German buyers.
According to the statistics of Property Registrars (Registradores de la Propiedad) for 2023, citizens of Great Britain, Germany, France, Morocco and Belgium buy the most real estate in Spain.
— Can foreigners take out a mortgage for the purchase of real estate?
— Yes, foreign citizens can take out a mortgage for the purchase of real estate in Spain practically on the same terms as citizens of the kingdom.
But there are restrictions in relation to some countries, for example, Ukraine, Russia, Kazakhstan, Belarus — citizens of these countries are not given a mortgage in Spain.
— By the way, recently almost all countries have been talking about very high mortgage interest rates. How is this the case in Spain and how does it affect the market, prices and demand from buyers?
— Indeed, in recent years there has been an increase in interest rates on loans, which was primarily due to the growth of the Euribor index. By October 2023, it had reached 4.16%. The growth was associated with several factors, such as an increase in inflation in the Eurozone, as well as an increase in key rates of the European Central Bank over 10 months.
Nevertheless, since October, the ECB announced that it was freezing the rate, and by the end of December it had collapsed to 3.679%. Experts say that Euribor will continue to decline, but do not wait for its collapse, the decline will be gradual. At the same time, the cost of mortgage loans may decrease somewhat. Today, the average interest rate ranges from 4.5% in the first two years of lending.
Spanish banks have tightened the issuance of mortgages — loans are being refused, demand for apartments is falling
About the investment attractiveness of the market
— What is the attraction of the Spanish real estate market for ordinary buyers and investors? Is it possible, for example, to obtain a residence permit or citizenship through such investments?
— The real estate market today is attractive to investors, first of all, for stability, high potential for growth, and guaranteed return on investment.
As for a residence permit or citizenship, in this regard, you should not make the main bet on buying real estate in Spain, because the very fact of owning property here does not give you the right to obtain a residence permit and even more so citizenship. There is, of course, the “Golden Visa” program, which assumes a residence permit for the whole family when buying a property worth more than 500,000 euros, but this is not suitable for everyone.
However, owning real estate in Spain is an additional plus when requesting a residence permit. In recent years, the Spanish state has significantly expanded the program for obtaining a residence permit, so in addition to the “Golden Visa” there are other more “affordable” relocation options.
In addition, prices on the primary and secondary markets, as well as rental in Spain, are growing rapidly, which, on the one hand, is a factor in favor of buying real estate in Spain if you are going to live here, and on the other hand, they guarantee a good income from renting out real estate if you are considering buying for the purpose of investment.
According to our observations, the increase in the cost of housing in the most popular cities and regions of Spain amounted to at least 25% over the past year. This dynamic continues to persist, which is why real estate in Spain remains liquid and represents one of the most profitable investments, in my opinion.
— How much can you earn on real estate in the country and what are the ways to do this?
— The main and most popular way is to rent out real estate, both tourist and long—term. If we take the average yield per year, it will be from 5 to 8%. There are more profitable investments — up to 12%, but there are few such offers and they have their own characteristics.
If we talk about long-term rentals, prices for them in Spain are growing very quickly, and the supply is quite limited, especially in areas with high demand. This provides great potential for investors.
Another way to earn money is buying and reselling real estate, which allows you to earn money with an increase in value. This method is especially popular in the market of new buildings.
About rent and the phenomenon of “payback”
— Now let’s move on to rental housing, how is this market developing in the country? How much is it possible to rent an apartment in the capital and in other regions on average today? Has the situation changed in the last six months/year and if so, how?
— The rental situation in Spain is changing almost every day, prices are rising rapidly, and supply is falling. In some cities, such as Madrid, the government is taking measures to ease the tension in the rental market in order to bring more affordable housing to the market. To do this, measures are being taken to support the owners.
In general, today it is quite difficult to find good housing in Spain for rent at a low price, and owners impose stricter requirements on potential tenants.
The average rental price in Madrid, according to the enalquiler portal, is €2,316 per month, in Barcelona €2,559, in Torrevieja — €812, in Malaga €1,336, in Marbella — €5,861 per month.
“We were refused a lease at least 7 times.” Personal experience: As a family from Kazakhstan moved to Spain
— Have you encountered the problem of squatters in Spain in your practice? How can you comment on this phenomenon in the market?
— The phenomenon of so-called “payouts” scares off many potential buyers of real estate in Spain. There is such a horror story: he went to get bread, returned, and someone had already seized the apartment. But, based on our practice, the fear of payback is greatly exaggerated.
The problem really exists, it cannot be denied, but the occupiers prefer empty housing, mainly bank real estate. You can also easily protect yourself with the help of modern security systems and armored doors — squatters are not interested in such real estate.
In addition, some progress is already being made in the field of legislation regarding home invaders: Congress is considering a bill on the emergency eviction of okupas within 24 hours and the introduction of criminal liability for this crime.
— Which, based on the current market situation, is In your opinion, what can be expected in the future?
— We expect further growth in sales volumes, especially from foreign buyers, a possible decrease, albeit small, in mortgage rates, a steady increase in demand for luxury real estate, as well as an increase in the number of transactions for cryptocurrencies.
Author
Yulia Yanukovych Editor-in-Chief
I am responsible for the work of the editorial office. I write expert interviews and guides.
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