When we talk about the real estate market, location plays a key role in the property’s purchase value and its future growth forecast. Before choosing the city or the neighborhood, it is important to analyze the characteristics of the country. If you are looking for a good investment (and we think you are!), you will want to consider factors like the country’s infrastructure, security, natural resources and/or the healthcare system in your decision-making process.
Spain has become an ideal market for investors. According to the report, Real Estate Market Outlook 2018 prepared by CBRE, trends are showing that Spain’s real estate market continues to rise each year, thanks in part to low interest rates and high liquidity, which offers interesting investment potential and possibilities for sectors, such as hotels, residential rentals (counting on the always attractive percentage of rentals for students), offices or industrial buildings.
This current Spanish situation has benefited from the negative effects of Brexit in the British real estate sector. While investments and real estate value have decreased significantly in the UK, they are actually increasing throughout the rest of Europe, in countries such as Germany, France, Luxembourg and Spain, according to a recent report on Real Estate Market Trends in Europe 2018, prepared by the consultant PwC. In fact, in Spain, the cities of Madrid (5th position) and Barcelona (11th position) scored among those with the best growth expectations within the European market!
Forecast by sectors
The PwC report also addresses the most attractive sectors for investors according to their level of development and the demographic changes in Spanish society. This means that, according to this study, the following are the areas in which we must explore in terms of opportunities:
- Logistics centers
- Self-storage centers
- Residential rental
- Student residences
- Nursing homes
- Construction of homes for sale
- Offices and coworking centers
- Medical assistance centers
- Aparthotels
- Computer centers
These trends coincide to a large extent with a study carried out by the BNP Paribas Real Estate on the sector trends for this year in Spain. It also serves as the main focus of interest in the logistics market, which continues to increase the most, thanks to the growing development of electronic commerce.
This increase in consumption has an impact on another sector, that of retail, which is expected to continue growing due to employment creation policies and the foreseeable increase in GDP. It is followed by the residential sector (with a special look at local businesses) and office spaces with shared services. BNP closes the ranking with the hotel sector, which has grown due to the large Spanish tourist attraction and especially focuses on small and medium-sized hotel groups, usually family-run companies. Finally, the report points out how an alternative investment market is being developed, focusing on services such as healthcare, educational centers, student facilities, senior citizen residences, car parks and gas stations.
It is also interesting to assess the government measures planned in this sector, with a focus on providing greater market stability and avoiding a new bubble. In this sense, it is expected that there will be continuity within the lines adopted by the previous Government, and a need to make changes in the Land Law and improve the rental market with tax benefits for tenants and owners. Municipal regulations related to holiday and tourism rental will be important in this regard, which is expected to give this type of business greater competitive strength. Equally important may be the measures planned to improve the legal security of the sector.
Spain and its display of “charms”
Investors’ interest in the Spanish market, apart from the more-than-good growth forecasts, focuses on other aspects that, to a large extent, influence the former and relate to quality of life.
Although it may sound like surreal, the reality is that the combination of Mediterranean culture, climate and philosophy of life of the Spaniards makes this society, compared to the rest of Europe, one of the few places where you can still enjoy yourself and maintain a good quality of life—especially when compared to markets in the U.S. and others. In fact, Spain is the second country in the OECD with the highest life expectancy, according to the Marca España portal.
- Free and universal health system
- Good infrastructure in terms of services, public transport, road network, etc. Spain is among the main countries of Europe and the world in terms of high-speed networks, fleet of trains, number of highways and air connectivity
- Security level of the country, the third most secure in the EU, and one with the lowest crime rates
- Cultural and environmental wealth. Spain is known for being the third country with the largest number of World Heritage declarations of UNESCO and for having an exceptional landscape richness, being the first in the world in Biosphere Reserves
- Diversity and climate benignity, one of the warmest countries in the EU, with an important coastal and beach area where, in addition, you can enjoy snow environments without the aggressiveness of northern climates
- Stability of the currency, with the strength and support of the European market
- Language: With more than 437 million native Spanish speakers, Spanish is the second most spoken language in the world behind Chinese, and well ahead of English
To find out more about real estate investment opportunities in Spain, Contact us
Recent Comments