After important changes in Spain’s property market throughout 2007, property in Spain has ceased to be of interest to profit-seeking investors. Today’s market doesn’t promise the quickly rising prices and fast turnaround that was possible years back; profit seekers have fled in search of more lucrative investment ventures, while private homebuyers are presented with a more approachable and friendly market.
Foreign buyers of Spanish property continue to be attracted to Spain thanks to the country’s classic appeal as a golden land of sun, relaxation and enjoyment. These overseas property seekers now enjoy a more accessible and stable market (throughout 2007 prices appreciated by a sustainable 4.8%) as well as increased leverage at the buying table (see the section Spanish Property Prices for more info.
The situation was drastically different only four years ago, when Spain’s property boom was in full development. Prices saw yearly rises of nearly 20% and the market was infested with money-hungry investors that spawned endless construction throughout the country – especially in more popular areas along the coast – with little or no regard for natural surroundings or consumer privilege.
Today, the Spanish property market is much friendlier to foreigners interested in relocating, retiring or vacationing in their own Spanish home. This is partly thanks to efforts by Spain’s department of housing, which saw to the tricky job of providing a soft landing for prices without weakening other aspects of the Spanish economy, so that a realistic level of growth can be maintained in years to come.
Whatever your reason for buying a property in Spain, you should not rush into buying a home. You should be careful as it always represents a risk to purchase something abroad, in a foreign and unfamiliar country, especially if you are not familiar with the language. Do not doubt about contacting a lawyer or a property specialist if you have any doubts ( see also our section Ask a Spanish Lawyer.
You may choose to acquire a property under construction from a promoter (off plan property), build a new property, or purchase one second hand. Each of these investments has its pros and cons and the process to acquire each type of property is different.
To make a sound decision you need to proceed with a method and an order. The financial factor is one of the principal issues that will determine the type of Spanish property you will purchase. You need to think about how much you can afford and are willing to pay. If you apply for a home loan, the bank can help you set your limits. Once you have the pre-approval it will be less likely for the bank to refuse you the loan when you have found your ideal Spanish home. However, if you are considering taking a mortgage from a bank you need to reflect on the interest rate and the consequences of it; keep constantly in mind it will have an impact on your monthly cost for years. Spanish banks will normally offer between 60% and 80% in mortgage for second hand and new development properties. However, the terms and conditions might not be the same in all banks. Thus it is preferable to talk to several banks before you make your final decision - see the section Financial Issues of purchasing a Property in Spain.
When you have decided how much you are going to spend, you need to establish what type of Spanish property you want (i.e. villa, apartment, farmhouse, etc.). You should then consider the location in which you want to buy your real estate. You should not decide the latter based solely on factors such as friends living in the area, available hobbies and recreational activities (i.e. horse riding, golf, sea), or previous vacations in the region. For example, you must also reflect on how it will be to live in a certain place all year round (if you plan to move to Spain), particularly during the winter or the tourist seasons depending on a location's popularity. Making a list with your essential criteria can be useful to decide what you want from a property (i.e. size, number of rooms, facilities included, lighting, investment value, and price); the more detailed is your list the more time you will save while visiting properties.
In the next section The Search for a Property in Spain you can find useful information about how to find your ideal house in Spain.
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