Investment Advice

Exciting Opportunities in a Recovering Economy

 

 

 

 

 

 

 Why You Should Invest in Spain

Much like the rest of the economy in most European countries, the Spanish property market has frozen to a standstill. However it is expected to resume activity during 2021, with the arrival of vaccinations in the country and property investment in Spain looks like an increasingly attractive proposition.

The recovery will be driven by domestic demand from Spanish nationals, and the holiday property market by European citizens.

Regarding domestic demand, the APCE (Association of Promoters and Constructors in Spain) has already put forward a demand to the government, together with other incentives, for the reduction of VAT on newly built property from an average of 10% in most areas to 4%.

This could be one of the extraordinary measures that are now being implemented by the Spanish Government, to prevent all new housing promotions suffering the consequences of a long term crisis.

VAT is applied to the property so the reduction would benefit all buyers, regardless of their nationality.

The general, optimistic belief between promoters is that Covid-19 has simply delayed launching new promotions, but they don't foresee significant reductions on the price.

The foreign holiday property market might be subject to high and low fluctuations as the crisis progresses during this year, once the movement restrictions are lifted.

Real estate agents are finding new and innovative ways to keep customers interested and they are ready to attract three types of customers:

  • Buyers and sellers who are on hold temporarily, by the complete shut down of the economy, will want to exchange contracts as quickly as possible before next autumn, and the predictable return of coronavirus during the winter months.
  • Investors with substantial cash amounts, who are already suffering losses in other financial investments, will quickly move to the property market as the safest place to keep money during times of economic uncertainty.
  • Bargain hunters expecting to find special reductions on prices in some areas, as new properties add up to the ones already for sale prior to the coronavirus crisis, creating excessive offers which would cause subsequent discounts.

 

 

 

Is the Spanish Property Market Improving in 2021?

Property investment in Spain will look increasingly attractive as demand in the Spanish housing market picks up in 2021. There is much data to support this.

According to American credit rating agency Standard & Poor's (S&P), households in the Euro zone have saved, on average around 25% of income. This has the potential to increase house prices as early as this year.

If the delayed demand for housing is caught up in 2021, people who have more savings will be available to buy housing and house prices will rise as a result, according to the credit rating agency.

A good indicator of the evolution of the property market in Spain can be seen in the data showing the price per square metre. This data can be used to forecast and predict the path of the Spanish housing market.

 

 

 

 

Why Will the Property Market in Spain Go up in 2021?

There has been a slight upward movement after 11 months. Prices for existing houses rose again for the first time in November 2020 after 11 months of decline. It is admittedly a small initial increase (0.7%) in the house price, that was measured in November of this year. However, this puts an end to a string of 11 month straight declines since December 2019.

In Spain, twelve autonomous regions presented positive monthly data in November 2020. Four of those 12 regions showed an increase of more than 1%:

  • Catalonia (2.8%)
  • Aragón (2.1%)
  • Extremadura (1.8%)
  • La Rioja (1.1%)

There were still 4 autonomous regions where the price of housing fell in November:

  • Castilla-La Mancha (-2.7%)
  • Navarre (-2.5%)
  • Madrid (-0.6%)
  • Canarias (-0, 4%)
  • País Vasco (-0.4%)

 

 

Delayed Housing Demand
From 2020


During the pandemic, the housing market was unable to function normally. There was a demand for housing, but buying was postponed. The demand for housing has therefore gone unnoticed and is likely to surface once restrictions have been relaxed.

Extra
Financial Resources


Due to restrictions on freedom of movement, much less money was spent in 2020, while incomes remained largely unchanged. As a result, money has been saved and homebuyers have more resources. These extra financial resources are the foundation for the expectation that we can expect to catch up in deferred home purchases in 2021.

Very Low
Financing Costs


In addition, financing costs are low with interest rates at an all time low. However, the banks have tightened credit conditions since the start of the pandemic. Yet most households have less debt than during the time of the financial crisis (2008-2013). The solvency of home buyers is much better. In combination with the low interest rate, many loans for the purchase of a home will be granted in 2021.

 

 

 

 

 

 

Invest With Espanvest

According to all reports, property is set to increase in value over the next year. There is no better time for property investment in Spain. Invest in Spain and your investment will be completely safe by virtue that you own part of the land. Invest with Espanvest and your option to sell back to the company is guaranteed.

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How Our Investments Work

Espanvest (Premier Developments Spain) purchases sites suitable for sustainable and eco-friendly developments. Purchases are made using the companies own funds, so land is clear of any charges or mortgages.

Once the site is purchased we then seek to gain outline planning permission. Once achieved, we then bring direct investors on board, which allows us far more flexibility with time scales for both full planning permission and development time scales. This ensures we avoid early payment penalties on funding, but also means we can share the large part of the profit cake with our investors and repay both trust and capital and interest, in the lowest time possible.

Each investor owns part of the company which owns the assets, which then secures your money. So your investment is always safe, secure and protected.

Explore property investment opportunities in Spain with Espanvest.

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