What’s the latest on property trends and prices in Spain?

If you’re struggling to keep up with the fluctuating and unpredictable nature of Spain’s property market, we’ve gathered the latest data from industry experts to give you the lowdown on price drops and property trends this autumn.

What's the latest on property trends and prices in Spain?
Cudillero, one of the most beautiful coastal towns in Spain. Photo: Ramón Perucho/Pixabay

Americans are hunting for property in Spain

Data from Spain’s leading property search engine Idealista reveals that from June to September the highest foreign demand for Spanish properties on the coast came from the United States.

This bucks the usual trend of British and German buyers topping the foreign property tables, although in this case the stats refer to online searches for properties in Spain rather than actual purchases.

As Idealista’s map shows, there is a keen interest by Americans for properties along practically all of Spain’s coastline, with the only exceptions being the Canary Islands and the Balearic Islands, where German (and to a lesser extent British) house hunters made up most of the foreign demand.

US house hunters also represented the largest portion of foreign nationals looking for properties in Italy and Portugal during the summer period.

Could it have been that many feared that Donald Trump would be re-elected and preferred instead to move to Europe? Q4 should hopefully shed some light on that.

READ ALSO: 11 burning questions from Americans who want to move to Spain

Spain’s popular spots haven’t lost their allure among foreigners

According to figures from Spain’s College of Property Registrars, the Balearic Islands (27.1 percent), the Canary Islands (26.3 percent) and the Valencia region (24.1 percent) were the regions where most foreigners bought properties in Spain during this year’s third quarter.

The average mortgage price for properties during the third quarter was €136,895.

Where are property prices falling the most in Spain?

According to real estate valuation group Tinsa, Spain’s Mediterranean coast has seen the biggest property price drops in the past year, down by 6.7 percent on average since November 2019 after months of fluctuations.

Capitals and big cities across Spain have experienced the second largest price fall – down by 2.6 percent – whereas prices in the Canary and Balearic Islands are at virtually the same levels as they were a year ago.

Spain’s luxury homes remain unscathed

Despite a GDP drop in 2020 of roughly 12 percent according to the IMF and Morgan Stanley, Spain’s property market is yet to reflect the price drops many forecast and hoped for.

Spain’s ‘standard’ real estate market is expected to see falls of around 10 percent in the sale price of second-hand homes and up to 30 percent in the more disadvantaged areas.

But when it comes to luxury properties, prices have so far hardly changed, with sellers reluctant to let Spain’s unstable economic situation affect their decision.

“Faced with the fear that inflation could occur due to the excessive injection of money by the ECB and the Federal Reserve, tangible assets emerge as a good way to have capital in a safe place,” Manuel Romera, Director of the Financial Sector at IE Business School, told El País.

Plenty of property sales in September

After a terrible summer for Spain’s tourism industry, with the resurgence of Covid-19 and ensuing travel restrictions destroying the country’s most important industry, the Spanish property market actually bounced back in September.

New data released by Spain’s National Statistics Institute (INE) reveals how property sales in September 2020 were only 1.1 percent lower than for same month in 2019.

In total, 37,839 properties were bought during September of this year, representing a 20.5 percent increase when compared to August’s figures.

As for the provinces where most properties were sold in September, they were Madrid (5,498), Barcelona (3,395), Alicante (2,638), Málaga (2,346) and Valencia (2,053).

On the other side of the spectrum were the usual suspects – the ‘empty’ provinces of Spain’s interior: Soria (61), Teruel (87), Palencia (101), Ávila (103) and Zamora (104).

Spaniards’ living habits are changing

Spain continues to be the European country with the highest number of apartment and flat-dwellers, but things started to change when a nation which spends plenty of time outdoors was forced to stay at home for months of lockdown at the start of the pandemic.

Whereas previously living in a central location took precedence over having a garden, the desire for space (even if it means living on the outskirts) is growing like never before.

According to figures from Spain’s College of Property Registrars, the sale of single-family homes continues to gain strength.

Third quarter stats show a historically high rate of these bigger properties, representing 20.4 percent of total operations, to the detriment of flats, which sank to a record minimum. 

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Home insurance in Spain: How does it work and what does it cover?

Home insurance in Spain has policies which may differ from what you're used to in your home country. Here's why Spanish home insurance may surprise you in terms of what it covers, what it costs, key info and whether it's worth getting.

Home insurance in Spain: How does it work and what does it cover?

If you’re moving to Spain and purchasing a property or even renting, one of the first and most important factors to consider is purchasing home insurance.

According to the latest data available, approximately 23 percent of households in Spain are uninsured. That percentage corresponds to around 6 million homes.

But with low prices and the wide range of situations Spanish home insurance covers, there’s little reason not to get it.

Contracting home insurance is only essential in Spain when you acquire a mortgage. The current Mortgage Law requires you to take out this insurance if you are going to buy a house with a loan and is an essential requirement for banks to grant you the money.

If you’re renting in Spain, you’re not obliged to contract home insurance, but it still may be a good idea.

Your landlord may have buildings insurance, but you may still want to take out some type of insurance to protect your own belongings or the contents of the property. 

In the UK, home contents insurance covers your personal possessions against theft, fire or other damage, while buildings insurance covers the structure of your property if the tiles on your roof are broken in a storm for example, the outside is damaged by fire or a tree falls on part of your property.

In Spain, home insurance works slightly differently. Like in the UK and other countries there are different types of insurance. 

READ ALSO: Is getting rental default insurance worth it for landlords in Spain?

What types of home insurance are there in Spain?

The most basic is seguros de daños or damage insurance which is similar to buildings insurance in the UK. This will only protect the structure of your property. This would be damage caused by major events such as fires, explosions, flooding, acts of vandalism or subsidence and you should still check the smallprint to be sure of the conditions. With flooding for example, most insurers cover flooding damage caused by rainfall greater than 40 litres per square metre per hour.

The second tier is seguros multiriesgo or multi-risk insurance. This covers both your building and its contents and is one of the most comprehensive types of home insurance in Spain.

This type of insurance not only covers big incidents like fire or theft, but it also covers a whole range of minor issues, which is very different from the type of contents insurance in the UK.

Home insurance is only essential in Spain when you acquire a mortgage. Photo: Louis Hansel / Unsplash

It can cover for everything from a blocked sink to a burst pipe in the wall or a broken radiator. Sometimes it may even cover the breakdown of your white goods such as washing machine and fridge, depending on how old they are and what your specific policy says.

It’s also especially useful for flat owners as it covers against damage to your neighbours’ property if something inside your apartment is at fault.

For example, if your shower or toilet breaks and starts leaking into the flat downstairs, your insurance should cover the damage to your neighbour’s ceiling so that you won’t have to fork out a fortune for fixing someone else’s property.

Many major cities in Spain have historic quarters and some of its nicest-looking apartment buildings are some of the oldest too, so it’s particularly useful if your property is old and prone to needing fixing regularly. 

The third and highest type of home insurance coverage in Spain is all-risk home insurance, which has extended coverage that includes robbery on the street, damage to extra storage rooms outside the main property or coverage for cosmetic damage.

What you need to know

Keep in mind that when you do claim or after you have claimed a couple of times, it’s normal that the insurance company won’t want you to be their client anymore and will terminate your contract.

This shouldn’t be a problem, however, you will simply contract a new home insurance policy with a different company. It helps to go with a broker so that they can present you with different options to choose from, so you know what’s the best.

Be aware that every insurance company will have a slightly different policy so just because a certain item may have been covered on your old policy, it doesn’t mean that will be on the new one or be covered to the same amount of money.

What are some of the most popular home insurance companies in Spain?

There are many different companies that offer multi-risk insurance policies in Spain, both international and national companies. Some of the most popular are:

  • AXA Home Insurance
  • Generali
  • Zurich
  • Mapfre
  • Caser
  • El Corte Inglés 

How much does home insurance cost in Spain?

As the multi-risk policies cover so many different aspects, you would imagine that they’re very expensive. Surprisingly though, these are quite affordable at under €200 per year according to the Organisation of Consumers and Users (OCU).

The price isn’t too different from what you’d pay in the UK. Money Supermarket says that a combined home and contents insurance policy in the UK costs around £140 per year, but usually it will cover a lot less.