Best Places to Buy Property in Spain

• Current trends in the Spanish real estate market

• Top-5 Spanish coasts by growth in number of transactions

• Best regions in Spain for foreign property purchases

• Top-5 Spanish coasts and islands for foreign property purchases

• Valencian Community

• Murcia

• Catalonia

• Andalusia

• Best Spanish islands for foreign property purchases

• Balearic Islands

• Canary Islands

• Top-15 Spanish provinces where foreigners buy property

1. Current trends in the Spanish real estate market

Strong sales growth

In the first quarter of 2018, 134,705 housing units were sold — 8% more than in the first quarter of 2017. The share of foreign buyers was 16.7%. Britons remain the largest group, however they are starting to be overtaken by buyers from Scandinavia and Belgium.

In June 2018, sales volume was 2% higher than in 2017.

By regions: the highest growth was shown by La Rioja (59.1%), Murcia (50.2%), Castilla-La Mancha (48.7%); the lowest — Balearic Islands (13.8%), Basque Country (16.5%), Cantabria (17.8%).

Data is based on 43,608 transactions registered by the Spanish Land Chamber in June 2018.

Housing costs are rising

Average property cost increased by 7.2% in 2017. Barcelona province showed 10.2% growth. Balearic Islands — +7.5%, Madrid — +6.9%.

Average price per square meter increased by 9.2% from August 2017 to August 2018. Average price in August 2018 was 1,697 euros per m².

Madrid and Barcelona are considered the most stable markets, followed by Valencia and Seville (low risk level).

Experts forecast price growth for at least three more years. According to JLL estimates, residential property values could grow by 3.8% by 2021.

Growing profitability

According to Idealista research, rental yield increased from 7.3% (2017) to 7.8% (2018).

Best cities for housing investment returns

Cities with highest yield: Las Palmas — 7.7%, Lleida — 7.7%, Murcia — 7.2%, Huelva — 7.2%, Santa Cruz de Tenerife — 6.8%, Almeria — 6.7%.

Lower yield: Madrid — 5.2%, San Sebastian — 4.3%, La Coruña — 4.4%, Ourense — 4.4%, Zamora — 4.6%, Barcelona — 4.7%.

In the secondary market from April to June 2018, prices rose by 2.7%, with an average cost of 1,664 euros per m².

2. Top-5 Spanish coasts by growth in number of transactions

Costa Brava — 27%, Costa de Valencia — 21%, Costa Verde — 21%, Costa del Azahar — 20%, Costa Dorada — 15%.

3. Best regions in Spain for foreign property purchases

Demand is distributed unevenly. In some areas, most buyers are Spanish, in others — foreigners (typically on the coast). Below is a list of the most sought-after provinces among foreigners (percentages indicate the share of foreign purchases in 2017).

4. Top-5 Spanish coasts and islands for foreign property purchases

Costa Blanca: 18,847 transactions, 23% — foreign buyers Costa del Sol: 10,761 transactions, 13% Costa Dorada: 9,254 transactions, 11% Canary Islands: 9,064 transactions, 11% Balearic Islands: 5,910 transactions, 7%

5. Valencian Community

In the first quarter of 2018, the share of foreign buyers was 26%, with a total of 52,365 transactions concluded. Sales grew by 35.5% in spring 2018 — the best indicator since January 2007. 83% of transactions were in the secondary market.

Average prices: Valencia — 103,000 euros, Alicante — 120,000 euros, Castellon — 50,000 euros.

Costa Blanca

Very affordable prices and high demand. Suitable for buyers with different budgets. New housing at affordable prices — lower than in Catalonia and Andalusia. 80% of foreign demand falls on Alicante province. Cities: Alicante, Torrevieja, Ciudad Quesada, Orihuela Costa, Calpe, Denia, Finestrat, Benidorm.

Costa de Valencia

Diverse beaches, historical attractions. Affordable prices. Popular cities: Oliva, Gandia, Cullera, Sagunto, Valencia.

Costa del Azahar

New developing destination. Profitable real estate, many new constructions. Popular cities: Oropesa del Mar, Marina Dor, Viñaros, Peniscola, Benicassim, Benicarlo.

6. Murcia

Costa Calida

Rich history, Roman attractions in Cartagena. Accessible market. Popular cities: Murcia, San Pedro del Pinatar, La Manga de Mar Menor, San Javier, Cartagena, Los Alcazares.

7. Catalonia

Barcelona

Seaside districts: Diagonal Mar, Poble Nou, Vila Olimpica. Central: Pedralbes, Sarria, San Gervasi. Average price — about 4,400 euros per m². Buying an apartment in the listed areas for ~200,000 euros is virtually impossible. A parking space costs 25,000–30,000 euros, on Paseo de Gracia — up to 60,000 euros.

Costa Brava

Most popular destination after Barcelona. Unique nature, proximity to France. Little new housing by the sea — buyers acquire land or old houses for demolition. Many consider Marbella as an alternative.

Costa Dorada

Picturesque coves, golden beaches, shallow water. Popular cities: Tarragona, Salou, Cambrils, La Pineda.

Costa Maresme

Barcelona province. Prices — about 2,000 euros per m². Long sandy beaches. Resorts: Calella, Alella, Sant Pol de Mar, Canet de Mar, Arenys de Mar, El Masnou, Premiá de Dalt.

Costa del Garraf

50 km south of Barcelona. Prices — about 1,900 euros per m², in Sitges — over 2,500 euros. Sitges is famous for its active nightlife. Cities: Sitges, Castelldefels, Vilanova i la Geltrú.

8. Andalusia

Costa Del Sol

Marbella — for buyers with above-average budgets. There’s a trend of buyers transitioning from Catalonia. Golden Mile and Estepona: modern villas with beach access. Other cities: Malaga, Fuengirola, Benalmadena, Calahonda, Casares, Mijas, Nueva Andalusia, Puerto Banús, San Pedro de Alcántara, Torremolinos.

Costa de la Luz

Popular among surfers. High prices, predominantly secondary market. Elite house — from 3 million euros. Cities: Cadiz, San Roque, Tarifa, Huelva, Sotogrande, Chiclana de la Frontera, La Alcaidesa.

Costa de Almeria

200 km of coastline, the youngest resort region. Prices — 1,500–2,000 euros per m². High service level, good ecology. Cities: Almería, Roquetas de Mar, Aguadulce, Águilas, Adra, El Ejido, Mojácar, Carboneras, Pulpi.

9. Best Spanish islands for foreign property purchases

10. Balearic Islands

Mallorca

Average price — 2,000 euros per m². Popular cities: Palma de Mallorca, Santa Ponça, Andraitx, Costa den Blanes, Calvia, Marratxi, Llucmajor and many others.

Ibiza

Nightlife, famous DJs. Europeans purchase elite real estate here. Average price — about 3,000 euros per m². Popular cities: Ciutat d’Eivissa, San Antonio, Santa Eulalia del Rio, San Jose, Roca Llisa, Vista Alegre.

11. Canary Islands

Tenerife

Largest island of the archipelago. Mount Teide volcano, impressive resorts, sandy beaches, World Heritage sites. Secondary market — 1,300–1,500 euros per m². Cities in the south: Las Americas, Costa Adeje, Los Cristianos, Los Gigantes, Costa del Silencio, Golf del Sur, Amarilla Golf, El Medano. In the north: Puerto de la Cruz, Garachico, Candelaria.

12. Top-15 Spanish provinces where foreigners buy property

Conclusions:

• The number of transactions in the Spanish housing market increased by 8%;

• Average property price grew by 9.2%;

• Top-3 places for foreign investors — Alicante province, Balearic and Canary Islands;

• Expected real estate price growth in 2018 will be up to 14% compared to the 2017 average.