Private real estate investment picks up again in Spain

by Lorraine Williamson
real estate investment Spain

MADRID – Real estate in Spain is becoming increasingly attractive for private individuals as an investment. In 2021 they bought no less than 23% of the total number of homes sold. Not to live in but as a nest egg. 

That is an increase of 4% compared to 2020 and about the same as before the start of the pandemic. This is evident from recently published data from the real estate platform Grupo Tecnocasa and Pompeu Fabra University in Barcelona. 

Most investments were made in the cities of Valencia (37.8%), Zaragoza (31.3%), Madrid (27.9%), Barcelona (24.5%), Seville (23.4%) and Málaga (23.1%). This expressly concerns private investors who buy a house as a nest egg and not the large investment companies. The current uncertain situation in the stock market means that private individuals who have been active here now want to invest more safely in the real estate market where house prices are currently rising strongly. 

New housing law not disadvantageous for private individuals 

The new housing law that limits excessive rents will not affect private individuals. The protection mechanisms for tenants only apply to ‘large owners’, i.e. companies that own more than ten real estate objects. However, private landlords are bound by rules when they want to increase the rent; this is only allowed in accordance with the price index. 

Old apartments are popular 

Apartments are by far the favourite for private investors: 94.7% of all real estate purchases involved an apartment. Most have an area of ​​40 to 60 square metres and two bedrooms. Often these are empty apartments that are more than 60 years old and need a facelift. Buyers of these types of homes receive a 12% discount on the sale price. The buying process is usually fast and more than 70% of purchases are without a mortgage. The profile of the private investor is a person between the ages of 45 and 54 who is self-employed and has completed a university degree. 

cogesa expats

Living in Barcelona is the most expensive 

The average real estate price in Spain in the second half of last year was €2,327 per square metre. That was 3.37% higher compared to the second half of 2020. In the municipality of Móstoles (Madrid), the price per square metre rose the fastest (6.52%) and in Málaga the least fast (1.33%). Only in Alcorcón (Madrid) did the price drop by 4.85% compared to 2020. 

The most expensive are properties in Barcelona with an average price per square meter of €3,035, followed by Madrid with €2,664. In Córdoba, the houses are the cheapest with an average of €998 per square metre. 

In 2021, housing rents in Spain generally fell. The largest decrease occurred in Madrid, while this decrease was barely noticeable in Barcelona (-0.20%). In Valencia, Seville and Zaragoza, rents rose by 9.52%,  3.48%, and 0.34% respectively.

Related post: Spain in top 5 for real estate investment

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