Unlocking the Allure: A Dive into Spain's Property Market and Expat Hotspots
There is no denying that there is something special about Spain. From the vibrant culture, warm Mediterranean climate and stunning beaches, to the rich history, exquisite cuisine and laid-back lifestyle, it is not hard to see why the country is so enticing. Explore this article by Expat Estate
Spain is not only one of the most popular tourist destinations in the world, but also attracts foreigners keen to set up a second (or even a first) home in the country. Even in the face of high inflation and increasing interest rates, the allure of the Spanish property market remains unwavering.
So much so that in the first half of 2023, 21.4% of property purchases in Spain were snapped up by foreigners - the highest percentage on record according to the Spanish Ministry of Transport, Mobility and Urban Agenda.
The lion’s share of foreign buyers are from the UK, representing 9.6% of the total foreign buyer pool, followed by Germany, 8.1%, and Morocco, 7.3%. Foreign buyers seeing the largest growth in the first half of 2023 have been the Russians with a staggering 50.2% increase compared with the previous period, followed by Ukrainians with a 41.6% increase and Americans in third place with a 13.6% increase.
Not only is the influx of foreign buyers strong but the residential market itself is buoyant with nationwide house prices rising by 2.1% in Q2 2023 compared with the previous quarter according to the Instituto Nacional de Estadistica, Housing Price Index. The region with the greatest uplift was Andalucia which includes the popular towns of Seville, Cordoba, Granada and Malaga, up 3.2% for the quarter.
Interestingly, despite the price rises, nationwide house prices are still about 17% (36% inflation-adjusted) below peak levels seen in 2007 according to the Global Property Guide.
So where do foreigners like to buy in Spain?
Barcelona
One of Europe’s most cosmopolitan cities, Barcelona is known for its café culture, buzzing nightlife, distinctive architecture and stunning beaches. An expat haven, Barcelona. is home to around 300,000 foreigners or 20% of the city’s population.
In fact, Barcelona is so popular that in the first half of 2023 it was recognized as one of the top five European markets with the most foreign real estate investment, according to the CBRE’s 'Global Real Estate Capital Flows H1 2023' report. Other cities in the top five were London, Munich, Manchester, and Berlin.
In Barcelona, expats tend to gravitate to the popular neighbourhoods of Gràcia, Sarria Sant Gervasi, L’eixample and Cuitat Vella (the old town).
Average square metre property asking prices in Barcelona are €4,150 (Idealista October 2023).
Valencia
Valencia was ranked the #1 best expat destination in the world in the 2022 InterNations’ Expat Insider Report….and deservedly so.
A cosmopolitan city with a population of 838,000, around 133,000 of whom are expats, Valencia is large enough to offer plenty of entertainment options but not too big to be overwhelming. With incredible architecture, both old and new, beautiful wide tree-lined boulevards, Turia Park, which is the largest urban green space in Spain, and stunning sandy beaches, there is a lot to love about Valencia.
You will find expat communities in Ruzafa, El Carmen, Canovas (also known as Gran Via) and Cabanyal.
Average square metre property asking prices in Valencia are €2,302 (Idealista October 2023).
Madrid
Madrid is Spain’s biggest economic hub and is popular with the technology, tourism and trade industries. The city plays host to 40% of international businesses in Spain. Given this, it will come as no surprise that Madrid is also home to the country’s biggest expat community, currently estimated at 1 million people or around 29% of the Madrid population.
According to the 2023 InterNations’ Expat Insider Report, Madrid is ranked the sixth best city in the world for expats. Madrid is a great hub for exploring other regions in Spain (and beyond) and is connected by one of the world’s fastest high-speed rail networks.
Neighbourhoods popular with expats are, Sol, Malasaña, Chueca, La Latina, Lavapiés, Retiro, Chamebrí and Salamanca
Average square metre property asking prices in Madrid are €4,064 (Idealista October 2023).
Palma de Mallorca
The capital of the Balearic Islands, Palma boasts picturesque beaches, historic architecture, and a charming old town, with narrow streets, hidden squares and quaint cafes. The city's diverse cultural scene, international events, and outdoor activities cater to a well-rounded lifestyle. While the cost of living is higher due to its popularity, the stunning natural beauty and relaxed pace of life make Palma a great place for expats.
Areas that attract expats are Son Vida, La Lonja, Santa Catalina, Portixol and Son Espanyolet.
Average square metre property asking prices in Palma are €3,917 (Idealista October 2023).
Alicante
Alicante has one of the highest concentrations of expats in Spain. Over 380,000 or 20% of the population are foreigners. It is also the sunniest city in Europe, averaging 349 hours of sunshine a month, which is no doubt part of the appeal!
In addition to the great climate (and stunning beaches that go with it) Alicante has a rich cultural heritage, vibrant culinary scene, affordable cost of living, and a welcoming local community, making it an attractive destination for expats. Alicante ranked #2 as the best place for expats to live in the world in the 2023 InterNations’ Expat Insider Report.
The neighbourhoods expats prefer in Alicante are Vistahermosa, La Albufereta, Cabo de La Huertas and Playa de San Juan.
Average square metre property asking prices in Alicante are €1,859 (Idealista October 2023).
Malaga
Situated on the Costa del Sol, Malaga offers a blend of history, beaches, and a laid-back lifestyle. The birthplace of Pablo Picasso, the city boasts cultural attractions like the Picasso Museum and the Alcazaba fortress. The expat scene is alive and well in Malaga - 16.7% of the population are foreigners, making it one of the most cosmopolitan areas of the country. So much so that the 2023 InterNations’ Expat Insider Report rated Malaga the best place in the world for expats.
Popular neighbourhoods for expats include the Old Town (Historic City Centre), Soho, La Merced, El Perchel, La Malagueta and Teatinos. A little futher afield, Marbella is also a popular expat haven.
Average square metre property asking prices in Malaga are €2,643 (Idealista October 2023).
Seville
Seville, the capital of Andalusia, is as picturesque as they come. With stunning Moorish architecture, horse-drawn carriages, a thriving Flamenco scene and a colourful history dating back to Roman times, what more could you ask for?
The city has become popular with expats in recent years with over 40,000 expats calling Seville home. Property prices are also cheaper than some of the larger cities like Barcelona and Madrid.
The most popular suburbs in Seville for expats are Triana, Los Remedios, Nervión, the Prado de San Sebastián area and La Macarena.
Average square metre property asking prices in Seville are €2,210 (Idealista October 2023).
Buy Property in Spain with Expat Estate
Expat Estate assists foreign nationals to buy property in Spain. Offering an end-to-end service from property search and acquisition through to mortgage broking and assistance with Golden Visa applications, Expat Estate make home ownership in Spain hassle-free.
Contact Caxton’s partner today for a free consultation to discuss your home ownership options in the Spanish property market.
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