In recent years, Spain has become an attractive country for foreigners to invest in. Spain is ranked as the 13th best place to invest in the world. In 2022, foreign investment reached one of the highest figures with 34.2 billion euros. A significant part of the investments that have been made in Spain focuses primarily on tourism, commercial and real estate.
Spain has the 4th greatest economy in Europe and the 14th country with the highest GDP in the world, which is one of the most attractive sides of investing in Spain. Its potential yield rate and being able to ensure the investment’s stability and sustainability make it an attractive investment center.
During the year 2022, Spain’s investment returns, especially in real estate, showed perpetual, remarkable growth. This consistency can be seen as an early announcer of how the market will shape in the following years. This might be the case for 2023 as well.
The number of units purchased by foreigners increased by nearly 20% more than in previous years. A significant increase can be observed not only in demand but also in house values per sqm. The rising property values and house prices have promoted the market’s whole dynamism, including second-hand and off-plan properties.
Valencian Community occupies 23.9% of total real estate sales to foreigners. This is a significant rate when considering there is a total of 17 autonomous communities in Spain. Valencia was followed by 15.2% with Andalusia and 13.1% with Murcia. Let’s dive into the best locations in Spain to invest in a property as a foreigner.
Most Demanded Locations to Invest in Spain
The cultural capital Barcelona or the official capital Madrid may seem like the most promising locations to invest in real estate. However, it might be better to consider new-generation investment regions to make a more sustainable investment with a clear future.
Where to invest in a property might be a tricky thing to consider. No doubt that Barcelona city or the capital Madrid stands out as a major tourist destination. They are major attraction centers that entertain thousands of tourists each year. It might be a good place to establish a business.
But when it comes to real estate, there are different factors that affect the future of the investment. These might be modernity, fixtures, construction quality, location, and more. Since these cities are well established, the property options can be quite limited. Also, the best properties might be a bit overpriced when measured by their qualities.
Right after the Covid-19 pandemic, Spain’s smaller regions started to draw attention as the best places to invest in Spain. They have become tranquil but steadily developing urbanizations. Especially from Costa Blanca on the north to Costa del Sol on the south, new residential areas started to gain popularity.
These coastal regions offer a private but comfortable lifestyle, full of amenities and a healthy environment. Since then, they still bear the same importance. Even some of them are transitioned into contemporary and metropolitan dwellings such as Torrevieja or Marbella.
Foreigners constitute nearly 45% of the population in Spanish costas. The latest report of the APR states that foreign property sales in 2022 constitute 15.92% of total purchases. This demand promoted mobility in the construction industry and real estate market on the coasts of Spain.
Settlements along with the coastline have transformed into modern living centers from small fishing villages. There is a big advantage to investing in real estate in cities like Alicante. It is easier to adapt to a contemporary lifestyle in a metropolitan city.
Most of the housing projects in seaside regions are strategically positioned within easy reach of amenities. Some even include social facilities within the complex. They are built with quality construction methods and designed with the latest technology.
These contemporary projects in newly developing regions are not only profitable in terms of material gains. They also might be a better option to live and pursue a modern lifestyle, if that’s your motivation.
Why Do Foreigners Choose to Invest in a Spanish Property?
Foreigners mostly choose to invest in real estate in Spain while buying property from abroad instead of in other European countries. Spain is more affordable, and profitable and it comes with lots of advantages.
Spain offers one of the best immigration programs in the whole Europe, which can be acquired by property investment. The Spanish Golden Visa scheme also increases the popularity of Spain among foreign investors. Foreigners can get a Spanish residency via Golden Visa. It allows foreigners to study, live and work in Spain.
The Golden Visa program is a big promoter of buying property in Spain as a non-resident. Also, along with a residency in Spain, Golden Visa holders benefit from visa-free travel. Golden Visa owners can travel without a Schengen Visa in the Schengen Zone, which is a big advantage. This is why non-EU citizens constitute a big part of the property investor profile of the Spanish real estate market.
Who Buys What: Spanish Property Investment by Nationality
It is possible to divide the foreign investor profile into two. The first group is non-EU citizens, looking for a way to get a permanent residence permit in Spain. The second is EU citizens who are looking for better living conditions and opportunities in Spain.
In Europe, Spain stands out as an attractive place for second-home owners. It is the perfect place for people who are planning to pursue a more comfortable and laidback lifestyle. The main reason for that is its wonderful climate. Sun shining in the sky average of 300 days, and makes Spain an attractive destination to adopt a joyous lifestyle.
Also, the healthy environment and affordable living conditions make it easier to pursue an active but easygoing lifestyle. Even EU passport holders, without needing a Golden visa, choose to buy their second home in Spain for these reasons.
EU citizens mostly look for comfort that they couldn’t acquire in their own residences. This is why the most in-demand properties purchased by Europeans are detached houses with open gardens and swimming pools.
These villas provide additional spaces for each resident. Also, they can benefit from the open areas to happily enjoy the warm, sunny climate and lively ambiance.
As for non-EU citizens, there is another perception of investing in Spain which is obtaining a Golden Visa. US citizens are the leading investor profile with 27.7% and are followed by UK citizens with 17.8%.
Non-EU investors tend to act more flexibly when it comes to property type. Definitely, residences such as flats in comprehensive complexes or houses occupy most part of their investments with 28.2%.
Talk to a Representative to Make a Profitable Investment!
Are you thinking of buying property in Spain but confused about where to buy investment property in Spain?
Yes, metropolitan cities such as Barcelona, Málaga, or Alicante stand out more than others. However, you can easily find a decent and lovely place to live your best life in each corner of Spain. However, when it comes to investment, the gainings and expenses must meet a balance to make it worthwhile.
It would be a smart move to work with a local agency while buying property as a foreigner. When it comes to overseas property investment, advising someone with full knowledge comes in handy.
The local real estate agents may show you some off-market properties and present special good deals. Your personal agent will lead you to the best option that matches your purpose.
The expert team of Spain Homes ® is ready to guide you through the best options in the Spanish real estate market. Contact us or visit our offices to get more information.