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Property in Spain: A weekly roundup of the latest news and updates

Property in Spain: A weekly roundup of the latest news and updates
The beautiful Catalan city of Girona. Photo: Irene Lasus Almirón/Pixabay
Stay up-to-date on the latest Spanish property news with The Local's weekly roundup.

Spanish property prices are expected to rise in the coming months

That’s the view held by a number of real estate experts who argue that the time to get a good deal on a Spanish property is now, as the window of opportunity opened by the coronavirus is quickly closing. 

“With the prospects of progressive improvement vis-à-vis Spain’s economy, we estimate that the evolution of house prices will have a positive trend from here until the end of 2021,” says Antonio de la Fuente, managing director of the Corporate Finance department of Colliers consultancy firm.

“There’s a broad consensus regarding the growth prospects of Spain’s economy for the next two years which, together with the current environment of low interest rates and inflation, we estimate that it will have a direct and positive relationship in the sale of homes also during 2022,” de la Fuente told Idealista.

According to Raymond Torres, head of Spanish think tank Funcas, “persistently low interest rates, increased savings by many families as a consequence of Covid restrictions, uncertainties about the performance of other assets such as investment in the stock market or in public debt securities, and the attractiveness of the Spanish market compared to other countries such as Germany, France, the Netherlands, and to a lesser extent Italy” are all factors contributing to rising house prices in Spain.

The price per square metre of homes in Spain increased by 2 percent in July 2021 up to an average of €1,848, according to Spanish property website pisos.com. 

In general, Spanish property experts believe the biggest price rises in the remaining months of 2021 will occur in large cities and well-connected and serviced surrounding areas while in rural areas and small cities the forecast is that house prices will remain stable.

Renting in Spain isn’t what it used to be 

Despite the drop in rent prices seen during 2020, especially in big cities such as Madrid and Barcelona, renting in Spain is still 41 percent more costly than it was five years ago, according to leading property portal Fotocasa.

The coronavirus crisis hasn’t proven enough to shake up the market and Spain’s inter-annual drop in rental rates of 5.7 percent in July 2021 hasn’t really made it that much more affordable for tenants. 

For extra context, in 2016 Spaniards paid an average of €592 per month for the rental of an 80sqm property compared to the €835 they pay on average in 2021 .

The Canary Islands (+49 percent), the Valencia region (46+ percent), La Rioja (+43 percent) and Navarre (+42 percent) are the regions that have experienced the biggest increase in rents over the past five years.

Where are all the luxury homes in Spain?

New data released by Spanish property search giants Idealista reveals that 73 percent of luxury properties advertised on their website are in Málaga province, the Balearic Islands, Madrid and Barcelona. 

Idealista’s criteria for qualifying properties as “luxury” (de lujo) is that they were priced above €1 million on August 1st 2021. 

The same four provinces lead the way in terms of ultra-luxurious properties costing €3 million or more, with Málaga housing the most luxury homes in Spain overall. 

One the same note, one of the most expensive properties in recent times is currently on sale in Mallorca, with an eye-watering asking price of €65 million. 

Photo: Engel & Voelkers

Unfortunately, when luxury properties become the norm you have situations such as that seen in Ibiza, where 40 percent of homes cost more than €1 million and locals are completely priced out.

READ ALSO: The most expensive streets in Spain in 2021

Where are the cheapest municipalities to buy a property in Spain?

Idealista has also released the latest data from the other side of the spectrum, where in Spain house hunters can buy the cheapest properties. 

The village of Carpio de Tajo in the central Spanish region of Castilla-La Mancha is the cheapest municipality to buy a home in all of Spain: €304 per square metre.

Barruelo de Santullán in Palencia province in the region Castilla y León (€383/sqm) and three other municipalities in Castilla-La Mancha – Cebolla (€401/sqm) Almadén (€407/sqm) and Herencia (€413/sqm) – complete the top five positions. 

Only 13 municipalities in Spain have average property prices below €450/sqm. 

Spain’s interior isn’t particularly popular with foreign buyers but it’s an area of the country which is full of authentic tradition, big open spaces, cheap properties and in the case of Carpio de Tajo, only an hour’s drive from the Spanish capital.

READ ALSO: What Spanish house hunters with few savings need to know in 2021

Spanish villages offer families with kids free accommodation and work 

An increasing number of Spanish municipalities suffering from depopulation are drawing in city dwellers with offers of a free home and in many cases a job to go with it. 

The village of Griegos in Teruel. Photo: Chantejot/Wikipedia

The latest to do so are the Teruel province villages of Alacón and Camarena de la Sierra, offering several families with children the chance to start a new life in rural Spain, rent-free and a job helping out at the local school. 

What these villages are often looking for is young inhabitants that can offer a more long-term future to their communities, as seen in Griegos, where for each child new arrivals bring with them, they get an extra discount on their rent, as well as jobs for the parents.  

Unfortunately, some of these offers don’t last long as local authorities quickly find suitable candidates to fill up the spaces.

If you’re after a move to rural Spain, it may be more realistic to find villages that are looking to build a community of remote workers over the long term rather than offering freebies as an incentive, as offers such as those offered by Teruel’s villages usually don’t last long due to the huge demand.

READ ALSO: The Spanish villages that want remote workers

Did you know?

As part of the Spanish government’s ‘Recovery, Transformation and Resilience Plan’, it’s possible to get a tax deduction of up to 60 percent for energy-efficient renovations on your home.

This is in addition to the government’s Housing Plan, which it launched in 2018 and has now extended until December 31st 2022, because of the Covid-19 pandemic. The Housing Plan gives grants for essential home improvements of up to €12,000 for things such as conservation, safety and access, as well as energy efficiency of the home and urban renovation.

Here are several home improvement ideas you can do in order to improve the energy efficiency of your home and benefit from these tax reductions.

Property in Spain: the home improvements you can get a 60 percent tax deduction for

Properties in Spain

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