Spain is on course to regain its place as a key property investment hub as confidence returns to the market, with Madrid and Barcelona leading the way.
- 13% of all foreign purchases in Spain were by foreigners in the third quarter of 2015
- Yield on rental properties 5-6%
- Investors buying property in Barcelona doubles since 2014
- Ernest & Young put Barcelona and Madrid among the top ten cities for investment in 2015
Spain’s leading independent estate agency Lucas Fox International Properties’ half yearly market reports reveal that the proportion of their high end clients choosing to buy property for investment purposes in the Catalan capital doubled during the first half of 2015 compared to the same period in 2014 – from 30% in Q1/2 2014 to 60% in the first half of 2015.
The report also shows that 60% of Lucas Fox Madrid clients who bought homes with a value of more than 900 thousand Euros also did so for investment purposes.
“This is a really exciting time for Spanish real estate” comments Lucas Fox founding partner Alexander Vaughan “The tide is turning and people’s faith in the market is being renewed. Transaction numbers are up, and prices – after falling up to 40% – have leveled out and in some prime areas are beginning to slowly rise again”
For the first time, the in-house reports also include data from buyers purchasing mid-range properties (in the 400,000 to 900,00 Euro price range), which showed that, in Barcelona, a third of all buyers purchased property for investment purposes with the same proportion buying as a primary residence. This reflects the growing numbers of local buyers coming back to the market, traditionally a sure sign that the recovery is underway.
In their European attractiveness survey ‘Comeback time’, accounting firm Ernest & Young put Barcelona and Madrid among the top ten cities for investment in 2015 alongside the likes of London, Paris and Berlin. The growing number of property purchases is expected to be one of the key drivers of economic growth in Spain, which has already surpassed forecasters’ predictions.
“The recent correction in property prices in Barcelona and the rest of Spain has once again ignited interest in properties for investment purposes” continues Mr Vaughan “The price adjustment combined with a growing economy and more favourable mortgage conditions all point to it being an opportunistic moment to invest in Spanish property, especially in prime locations. With a yield on rental properties of up to 5-6%, investing in Spanish property in some cases could be viewed as a safer bet than the stock market”
13% of all foreign purchases in Spain were by foreigners in the third quarter of 2015, the same figure as during the whole of 2014. Significantly, El Colegio de Registradores, Spain’s Land Registry, states that a fifth of all foreign property sales were by British investors, up from 16% during 2014 as low interest on UK savings accounts, high housing costs and the strong pound have all been catalysts in luring Brits back to the Spanish property market.
In response to the growing demand for investment products, Lucas Fox has established ‘Lucas Fox New Developments’, turnkey homes that offer higher-than-average rental yields and a good return in the long term.
Currently focused on the regions of cities of Barcelona & Madrid as well as in and around Marbella, Lucas Fox New Developments will expand to incorporate other regions such as Ibiza, the Costa Brava and Valencia in 2016.