Property market trends in Spain in 2022-2023
The Spanish property market recovered strongly in 2021 after the health crisis, with transactions up by more than 34% compared with 2020. This momentum is set to continue in 2022 and 2023, underpinned by the economic recovery, still low interest rates and a growing appetite for the Spanish market among foreign investors.
Demand is particularly strong for second homes on the Mediterranean coast and the Balearic Islands, with an increase in searches for houses with gardens and swimming pools since the pandemic. Major cities such as Madrid and Barcelona also remain very attractive. Foreign investors will be well advised to target these trendy areas where rental demand is high, especially from a rental investment perspective.
On the supply side, new construction remains limited in relation to demand. This is keeping up upward pressure on prices, which should continue to rise in 2022 and 2023, albeit more moderately than in 2021 (projected growth of 4.5% in 2022 and 3.8% in 2023). Against this backdrop, buyers are best advised to opt for recent or renovated properties, as quality is increasingly in demand.
A detailed analysis of net rental yields is also essential, as charges and tax can have a major impact on returns. The demographic and economic outlook for the target areas also needs to be studied, to ensure that there is potential for long-term value creation.
Finally, to limit the legal and practical risks involved in managing a property investment in Spain from a distance, it is strongly recommended that you call on the services of a specialist, multilingual firm of business lawyers. These experts will be able to guide foreign investors through all the legal and administrative procedures, pointing them towards the best options for structuring their acquisition and ensuring optimum management of their property. Their in-depth knowledge of Spanish law and their command of the various languages are essential assets for successfully completing a property project in Spain. Coupled with the assistance of an experienced local property manager, the involvement of a specialist law firm is a wise option for maximising the chances of a successful rental investment in this country.
By following these few recommendations and carrying out the right preliminary analyses, foreign investors can make a success of their property project in Spain with peace of mind, and derive a stable and attractive income from it.