After years of hard crisis in Spain, the economic activity appears to be slowly recovering in most parts of the country. The Spanish real estate market reached its lowest prices in 2013, which have started to increase faster in 2018. However, prices are still said to be 35% cheaper than the maximum figures reached in 2007, at the end of the real estate bubble. In contrast, long-term rentals have gone up considerably, to the extent that it often turns out cheaper to buy a property. For example, if renting a room in a shared flat in Malaga costs 400 Euro and you can get a mortage for 300 Euros, it could be a sign that buying is working out more profitable. Moreover, finding a place to rent is becoming more difficult and expensive in big cities, due to the success of holiday rental platforms and the growth of Tourism.
However, a long-term rental can be better for someone who hasn’t quite decided to settle down in a city or if the person hasn’t got a stable job. Besides, getting a mortage only becomes realistic when you have a permanent contract and some money saved. As a thumb rule, before buying property in Spain, it is generally recommended to have savings worth 25 to 30% of the final purchase price. The purpose of this 30% reserve is to pay for taxes, notarial charges and further legal costs. In case you are interested in knowing more about the cost of buying a home in Spain, you can find more details on this page.
When it comes to applying for a mortgage, foreigners can benefit from special programmes, which are specially designed for them. One of the reasons for buying a house in Spain in 2018 is the fact that the interest rates – that is, the Euribor rate and the mortgage differential – are still considerably low, which means they will be expected to increase in the years ahead. Whereas the Euribor applies to all the Eurozone, the differential is the interest rate at which each bank lends money. If you are interested in getting a estimate of a mortage in Spain, we recommend doing a rough calculation by yourself with the following source:
Furthermore, some of the best reasons for buying a home in Spain are:
Should you need further assistance to purchase a house or to rent out your property, don’t hesitate the Legal & Tax Help solicitors in Málaga, Costa del Sol. We are an English speaking law firm specialising in property conveyancing, taxes in Spain, residence, wills and succession and many more.