The honest answer depends on your reasons for buying a property in Spain. There’s a saying in the financial markets that equally applies to real estate when it comes to investing:
“If the reason for your investment still exists, so too should your investment.”
This means it’s prudent to hold your investment position if the reasons for your investment are still valid. Suppose you invest in houses for sale in Spain to enjoy your holidays, for your retirement or primary residence, or to escape the long, dark winters in your home country. In that case, fortunately – Spanish weather is unaffected by real estate trends and your reasons for Spanish property investment. It will remain valid and well-timed.
If you are buying a property in Spain to maximize rental yields and you’re hoping to achieve capital gains on your property, then local real estate trends will influence the answer to the question:
How Much Time Does It Take To Buy A Property In Spain?
One of the first things people should know when buying a property in Spain is how long it will take before they can take ownership. There are no laws in place regulating the time between signing a private contract (called Contrato privado de compraventa), paying a deposit, usually 10%, and completing the sale at the notary’s office; however, it does depend on how complex the purchase is.
The private contract, the document signed by both parties and including a deposit paid by the buyer, usually states a time limit for completion. This completion date is agreed upon by both parties and based on the type of purchase and the buyer’s and seller’s preferences.
In general, timescales for buying a house or property in Spain vary but in general; they are as follows:
- 3 to 4 weeks: for straightforward purchases, i.e., properties with no debts, all paperwork in order, and financing already in place.
- 4 to 8 weeks: for slightly more complex purchases where, for example, an architect’s certificate is required, or the buyer needs to obtain a mortgage. Spanish properties purchased from banks tend to fall into this category too.
- Over 8 weeks: for those purchases where there are problems or time-consuming bureaucratic processes – for example, the property isn’t properly registered, or the property forms part of inheritance or divorce proceedings.
In our experience, the completion of a property sale typically takes place between 4-6 weeks after the private contract is signed, but of course, the buyer and seller can agree to a longer time if needed.
When making a large purchase, such as a luxury villa, or any property purchase of any significant sum, you should always use the services of a recommended lawyer who specializes in property law/transfers and a reliable and honest real estate agent. Buying a house in Spain might seem daunting, but with access to the right professionals, the process can be easier. You can search for the best places to invest in real estate in Spain right here at https://www.javea.properties/.
Is Now a Good Time to Buy Spanish Property?
Timing is everything with most investments. All asset classes, including property, are cyclical in nature. Peaks and troughs are characteristics of all asset classes.
However, timing is only imperative if you need to buy and sell your property within a time frame to achieve your investment objectives.
The great news about Spanish property prices is that despite the economic slump from the global pandemic, house prices in Spain have been steadily rising, bucking the trend.
Is it Safe to Buy Property in Spain?
Yes, “as safe as houses,” as they say. Here’s why: the latest housing pricing data from Spain’s National Statistics Institute (the Instituto Nacional de Estadistica (INE)) shows a steady rise in property prices. Nothing is sharp and steep, just slow, gradual growth. It is characteristic of a stable real estate market in Spain that’s been growing since late 2012.
Spanish house prices rose 1.68% during Q3 2020 (2.2% inflation-adjusted). In the previous year, property prices in Spain 2019 posted a 4.68% rise, according to the Instituto Nacional de Estadistica. Every quarter, house prices increased by 1.15% in Q3 2020 (1.67% inflation-adjusted).
Price increases by property type:
- Existing properties: prices rose by 0.76% during Q3 2020 (1.27% inflation-adjusted).
- Newly constructed properties: prices rose by 7.46% year on year in Q3 2020 (8.01% inflation-adjusted) – up from the annual rise of 6.64% in Q3 2019.
Spanish Property Prices Forecast
The housing prices show a steady uptrend in Spain’s property prices since recovering from the Spanish property crash.
The promising outlook for property prices: despite over five years of continued housing prices rising, Spain’s real housing price is still 23% (-32% inflation-adjusted) below peak levels witnessed before the global financial crisis.
Spain’s Housing Supply Reaches Equilibrium
It is no secret that the housing supply was surplus during Spain’s property boom. Skyrocketing property prices and foreign investment fueled a surge in construction projects and real estate agents.
According to the Institute of Business Practices (el Instituto de Práctica Empresarial), housing stock reached peak levels back in 2010 (at 931,615 homes). Since the peak, home sales have averaged approximately 430,000 per year (for the past 5 years), with 50,000 new houses constructed each year.
This adjustment has corrected the previous housing surplus, where the Spanish property market is now said to be at equilibrium (housing supply matches demand).
For the first time in 40 years, Spain’s current account balance has also reached equilibrium, a strong sign of economic stability in the region.
For the Spanish government, the new challenge is to preserve a proper living environment for the locals (equally popular with tourists and expatriates) by enhancing their access to property while promoting foreign investment. Rising prices seem indisputable, but the government emphasizes greater security and control of real estate transactions and more transparency so that buyers can have peace of mind.
Considering Buying a Property in Spain?
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