Many indicators are pointing to the fact that the housing market is slowing in Spain, but this does not create a need for alarm for those that currently invest in that market, or those that are considering investing in Spanish real estate. There are several reasons why the market is slowing, and though it may mean higher prices for potential homeowners, it may not be so for investors. The key is to understand how geographical markets are performing, especially in the area of rental properties.
The cost of living is increasing in Spain as inflation takes its toll on the overall economy, and the housing market is no exception. Madrid logged a national high in residential price increases of 6.5 percent, while Malaga posted the lowest across the board increase of 1.9 percent. Valencia actually posted a 3.2 percent drop in prices.
Even with the increases in costs, the rising home sales in Spain are expected to increase by 3.4 percent through the year.
New House Prices
The new housing price index in Spain rose by 2.5 percent from this point last year. Everyone is expecting homes to hold their value or increase slightly.
Rental Market is Stable
The rental prices in Spain have increased steadily and reveal a 2.1 increase over this time last year. At current, Barcelona boasts the most costly rentals. Barcelona rentals are averaging 600 euros for a two-bedroom dwelling.
If you are looking for the rental yield feasting field, it would be in Javea, where properties for sale in Javea Spain are ranging from 6.3 percent to 8.1 percent on small apartments.
So, although the indicators show a slowing housing market in Spain, there is still room to play for investors, especially those who are willing to get into the rental market.
Spain’s growing job market is attracting immigrants in large numbers, ensuring that the rental market will continue to grow, at least in the short term.