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Everything that changes in Spain in 2021

Covid-19 will no doubt dominate our lives in 2021 but there is plenty more in store for the new year which people living in or moving to Spain need to know about.

Everything that changes in Spain in 2021
Covid vaccines, Brexit, bank closures and the return of tourism are just of the challenges Spain will face in 2021. Photos: AFP

The vaccine 

It’s the most pressing point on the global agenda and what’s most likely to restore normalcy to life in Spain.

Spain will begin vaccinating people against the coronavirus as soon as January 4th or 5th, its health minister Salvador Illa said on Monday December 14th.

It could be that that launch date is brought forward as the Pfizer and BioNTech vaccine is expected to get the European Commission’s authorisation for distribution on December 23.

According to a statement made by Prime Minister Pedro Sanchez in late November, Spain will have vaccinated a large part of its population of 47 million against the coronavirus by the middle of the year

Third wave?

Much will depend on whether Spain’s infection rate spikes during the busy Christmas period.

There’s an increasing mention in the Spanish press of the high possibility of a “tercera ola” (third wave), with reports stressing that despite the fact Spain currently has fewer cases than other European countries, the premature removal of measures and an ambiguous Christmas Covid plan by the central government spell trouble.

ANALYSIS: Spain risks a third wave with its confusing Christmas message

Both national and regional authorities are now in the process of deciding whether to tighten restrictions for Christmas

The return of tourism and travel?

Spanish tourism authorities announced in early December that the plan is to open Spain to holidaymakers in March 2021 through its new 'Travel Safe' campaign.

That of course doesn’t necessarily mean Spain won’t remain on or return to many country’s no-travel list if infection rates are still high in March, so much will depend on the introduction of a new vaccine and the country’s handling of the pandemic.

Currently all arrivals to the country have to present a negative Covid-19 test taken less than 72 hours before travelling. Spanish tourism authorities hope this won’t be the case by the time spring arrives.

READ MORE: How Spain plans to bring back tourists in 2021

Brexit and Spain

On January 1st 2021 Britons will wake up as non-EU nationals, a sad day for most UK citizens who live across Europe, not least the 375,000+ that have officially made Spain their home.

No doubt each and every one of them knows this already, but if Brits in Spain want to carry on residing here and they haven’t registered before, it’s imperative that they apply before 2021 and if for whatever reason they can’t (no appointments available or circumstances) that they can at least prove that they were living in Spain in 2020.

It will be markedly harder for Britons wanting to move to Spain to do so after Brexit, and although the exact details of this are yet to be confirmed, it will involve stricter requirements regarding income, health cover, time spent outside the country and plenty more.

For British second home owners, ‘swallows’ and UK tourists who love spending time in Spain, the rules of the game will also change, from the 90-day limit to having to apply for a ETIAS visa waiver to enter the country and further setbacks relating to their status as third-country nationals.

READ MORE:

Spain’s floundering economy

Back in October, the International Monetary Fund reported that Spain would end 2020 with the worst-hit economy in the world and a GDP drop of 12.8 percent (the IMF figures have been revised up and down by a couple of percentiles).

It’s been a disastrous economic year for most countries however, and the forecast for Spain’s economy in 2021 is more positive at least, especially now that the Covid vaccine is within reach.

CaixaBank Research predicts a GDP growth of 6 percent and the Bank of Spain has given a growth range of between 4.2 and 8.6 percent; others such as ING aren’t as optimistic and put the figure around 4 percent.

What financial experts do seem to agree on is that there won’t be a sudden V-shaped growth of Spain’s economy in 2021.

Furlough ends, what will happen to jobs?

What Spaniards of a working age really care more about than the apparent state of their economy is their jobs and whether they’ll be able to recoup the stability and earnings so many have lost in 2020.

The country’s furlough scheme – the so-called ERTE which has propped up Spain’s job market since March – ends on January 31st 2021, so it may be only then when we start to get an idea of the full extent of “el paro” (unemployment in Spain).

According to the Economic Forecast Centre (Ceprede), Spain’s unemployment rate could go up slightly from the current 15.7 percent to 16 percent.

Spain’s government has actually announced that by the end of 2020, the jobless rate will stand at 17 percent; the Bank of Spain forecasts it will be between 19,4 percent.

No official body has predicted for 2021 anywhere near the 26.6 percent (6.15 million people) unemployment rate seen during the height of Spain’s last financial crisis, but the outlook is still hardly rosey and the same cracks will remain: a primarily service-based economy and an overdependence on tourism.

Road rules

The Spanish government’s new Traffic Code comes into force on January 2nd 2021.

It will include new speed limits for urban roads(down from 50km/h to 30 or 20km/h, harsher penalties on the driving licence point system and limitations to where e-scooters can be ridden.

You can read about it in detail here.

Will Spain’s property prices drop in 2021?

Different real estate experts, from popular property search engines Idealista and Fotocasa to market trend analysts, can't seem to agree over just how sharp the property price drop will be in Spain, if there will be one, and when house hunters in Spain can expect to see proper bargains.

Nonetheless, US credit rating agency Standard & Poor's recently forecast that in 2021 Spain will see the steepest property price fall in Europe, only to then rise very sharply in 2022, apparently leaving a short window of opportunity for budding property owners.

In December, Fitch Ratings published a report that also stated that among the world’s top economies, Spain will see the biggest property price drop in 2021 (4 to 6 percent), especially in Madrid and Barcelona where prices were overinflated prior to the pandemic.


READ MORE:

Fewer bank branches

Whether it’s a direct consequence of the pandemic or just due to a pre-planned strategy to cut costs, Spain’s different banks will be closing thousands of their branches in 2021.

Before Santander’s recent announcement that it would shut around 1,000 of its offices next year, the total number of closures had been estimated at around 4,000 between 2020 and 2021, with Caixabank (which is merging with Bankia) making up the bulk of these with 3,600 closures.

In practice this will mean that many people in Spain are going to have to travel further or resort to doing most of their banking online, a consequence which has been deemed particularly discriminatory for the elderly and those living outside of big cities.

Tax changes

Spain’s official budget decree (Ley de Presupuestos) for 2021 will go up for a vote in congress on December 29th. Here are some of the main points.

Regarding personal income tax, the draft law includes an increase from 45 up to 47 percent for big earners whose income from work exceeds €300,000; and from 23 to 26 percent for those earning more than €200,000.

There are also likely to be increases to the wealth tax on fortunes higher than €10 million.

There will be a tax increase on sugary drinks from 10 to 21 percent, from which bar and restaurant owners will be exempt.

If the law is approved, parental leave for new dads will be the same as for mums in 2021: 16 weeks with 100 percent of their salaries paid.

Non-contributive pensions would go up by 1.8 percent.

The IPREM index used to calculate if a worker is entitled to benefits will go up by 5 percent from the current €537,84 per month.

Stay tuned to this space as we will publish all the details on Spain’s new Budget Law as soon as it’s been officially approved. 

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MOVING TO SPAIN

REVEALED: The cheapest and most expensive areas to buy or rent in Valencia

If you're thinking of a move to Valencia, you should know that the eastern city is renowned for its relatively cheap cost of living compared to other big cities in Spain. So where are the cheapest and most expensive 'barrios' (neighbourhoods) to rent or buy a home?

REVEALED: The cheapest and most expensive areas to buy or rent in Valencia

The Mediterranean coast, climate and diet. A city with history, charm, and bustling with life. Valencia has it all, and that is why so many foreigners make it home.

In fact, over 100,000 foreigners have made the eastern Spanish city their home in recent decades, and for good reason.

But what’s the situation when it comes to renting or buying a property?

Before diving into our neighbourhood property guide, let’s have a look at the big picture and see how Valencia stacks up against other Spanish cities. 

Buying a property in Valencia in 2022 costs an average of around €1,839/m2, which means that if you buy a 80/m2 apartment, it would cost you around €147,000.

That’s cheap – in fact, if we compare the average prices in Valencia to Madrid and Barcelona, you’ll realise just how affordable Valencia can be if you know where to look.

Let’s take, for example, Valencia’s most expensive neighbourhood, l’Eixample, in the city centre, which on average costs €3,024/m2 to buy.

That’s quite a bit more than the city-wide average (in barrios further afield the average is around just €1,400/m2), but pales in comparison to the Salamanca district of Madrid (€6,149/m2) and the Sarrià – Sant Gervasi area of Barcelona (€5,228/m2).

Valencia’s affordability is one of the main reasons why so many foreigners have flooded the market in the last two decades.

More than four out of five foreigners in Valencia (82 percent) believe that housing is affordable in the city, compared to 41 percent globally, according to the annual Expat Insider Survey published by InterNations which recently ranked Valencia as the best city in the world for foreign residents.

READ ALSO: Living in Spain: Why Valencia is officially the best city in the world for foreign residents

And renting is cheap too – international cost of living calculator Numbeo found that Valencianos fork out just 27.7 percent of their monthly budget on paying rent.

Before we continue, it’s worth noting that due to rising inflation in Spain and a lack of available properties in Valencia itself, rent and sale prices have increased, keeping in mind that the data in this article is from February 2022, before Russia’s invasion of Ukraine.

But we know that by general standards Valencia’s is fairly affordable – but where are the most and least expensive neighbourhoods in the city? 

Cheapest neighbourhoods to buy a property in Valencia

According to Spanish property site Kasaz.com, these are the cheapest Valencian barrios to buy in 2022:

  1. Rascanya is the cheapest place to buy an apartment in Valencia. In the north of Valencia and bordered by better known barrios such as Benimaclet to the east, La Saïdia to the south, and Benicalap to the west, Rascanya is really cheap to buy – on average, buyers pay around €1,133/m2.
  2. L’Olivereta comes in at number 2. Located in the west of the city but just a 15 minute walk from downtown, prices in L’Olivereta average out at around €1,302/m2 but it varies quite a bit within the neighbourhood itself. L’Olivereta is home to five neighbourhoods and prices vary depending on where you are: La Fontsanta €862/m2), Tres Forques (€1,017/m2), Soternes (€1,387/m2), La Llum (€1,415/m2), Nou Moles (€1,456/m2).
  3. Jesús district was a historically industrial neighbourhood, and despite many years of housing shortages, prices have stayed low: buyers there pay on average €1,355/m2. However, having 5 neighbourhoods, prices may vary depending on where you are: Sant Marcellí is the cheapest neighbourhood (€1,214/m2), followed by Camí Reial (€1,238/m2), L’Hort de Senabre (€1,306/m2), La Creu Coberta (€1,353/m2) and La Raiosa (€1,453/m2).

    An official map showing Valencia’s city’s neighbourhoods. Map: Valencia City Hall
  4. Benicalap – the fourth cheapest area in Valencia is one of its oldest. Benicalap dates back to 1238 and it even existed as a separate municipality until it was eventually annexed by the city of Valencia in the late-19th century.

    Located in the northern part of Valencia, Benicalap averages out at about €1,408/m2, but within the district are a few neighbourhoods within which prices vary quite a bit. Ciutat Fallera, for example, is very cheap (€1,006/m2), but Nou Benicalap is much pricier, with averages of €2,148/m2.

  5. Patraix – a family friendly area just 3km from the city centre, prices to buy average €1,437/m2.

    READ ALSO: Moving to Valencia: A guide to the best neighbourhoods to live in

Cheapest neighbourhoods to rent in Valencia

  1. Favara – sandwiched between Patriax and Jesús is the small barrio of Favara in the south of the city, where renters on average pay just €6.03/m2 – the cheapest rate in Valencia.
  2. The Torrefiel neighbourhood of Rascanya comes a close second, costing on average just €6.47/m2 to rent.
  3. San Antoni is Valencia’s third cheapest neighbourhood- up in the north of the city and neighbouring Rascanya – where rents average €6.67/m2.
  4. La Llum – on the western outskirts of Valencia lies La Llum, where renting is also a very affordable €6.86/m2.
  5. San Marcelino – a small neighbourhood belonging to the bigger barrio of Jesús, San Marcelino is an old working class area with cheap rents – €6.95/m2 on average.

Renting or buying in Valencia’s old town Ciutat Vella is logically more expensive. Photo: Al Elmes/Unsplash

Most expensive neighbourhoods to buy in Valencia

If money’s no object to you, here’s a quick breakdown of the most expensive parts to buy in Valencia. See a more detailed sub-neighbourhood by sub-neighbourhood breakdown list over at 7televalencia, which includes both the most expensive and cheapest barrios, but be warned, it’s in Valenciano!

  1. L’Eixample – €2,876/m2 – Upscale L’Eixample is filled with wide, leafy streets lined by department stores and posh brunch spots. Pricey, but trendy.
  2. Ciutat Vella – €2,859/m2 – The old town, or casco antuigo in Spanish, is stuffed to the brim with gothic cathedrals and cobblestone side streets. This is the ‘heart’ of Valencia, and living amongst such hustle, bustle, and history comes at a price.
  3. El Pla del Real – €2,487/m2 – Known by some as Valencia’s nicest district, El Pla del Real is full of green spaces and parks, and is a great place to bring up kids.
  4. Campanar – €2,082/m2 – Campanar’s canal walks and vineyards give it a village like quality right in the middle of the city.
  5. Extramurs – €2,062/m2 – Bordering the old town, Extramurs central location mean it’s pricey and brimming with life – the barrio is home to some of Valencia’s best tapas bars and very popular with students. Top tip: visit the university’s botanic garden for an escape from city life.

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