Navigating the Spanish Property Market: Insights, Trends, and Practical Guidance

1. Historical Context: Spanish Property Market Trends

While the ECB has forecasted a fall in property prices across the eurozone, the Spanish property market exhibits unique conditions that provide resilience compared to its European neighbours, especially those in northern Europe.
In July 2008, real estate predicted a 20-30% decline in Spanish house prices within three years. Initially considered overly pessimistic, his forecast proved accurate in the longer term. By 2014, house prices had fallen by 29% nominally and 35% in real terms. This prolonged decline was due to Spain's delayed response to the crisis, unlike Ireland, which swiftly addressed losses through a 'bad bank.' As of 2023, Spanish house prices remain 7% below 2008 levels nominally and 28% below in real terms, underscoring the bust's lasting impact.
Despite this historical context, the Spanish market is currently outperforming the eurozone average. However, prices are expected to stagnate after 2024 due to rising interest rates. Therefore, now is an opportune time for sellers to sell and buyers to make their purchases.

Key Resilience Factors:

2. Ten Easy Steps to Buy Property in Spain

For those considering purchasing property in Spain, here’s a detailed guide:

1. ​Hire a Lawyer
   Essential for non-residents to ensure a clean title, handle legal paperwork, and manage administrative tasks.
   Your lawyer requires a Power of Attorney (PoA) to act on your behalf, including opening a bank account, applying for a NIE number, applying for a mortgage, drafting and signing legal documents, filing property taxes, connecting utilities, and dealing with a community of owners.
2. Apply for a NIE Number
   A tax identification number needed for all transactions and services in Spain. It’s a must-have for opening bank accounts, enrolling in schools, dealing with healthcare providers, etc.
   The process typically takes about two weeks.
3. Open a Bank Account
   Required for utility payments, property transactions, and other financial activities.
   You must attend the bank in person to open an account.
4. Visa Requirements
   EU nationals generally do not need a visa to stay in Spain, but a residency permit is required for stays over 90 days.
   Non-EU nationals need a visa for stays over 90 days. Some visas must be applied for from your home country, while others can be applied for in Spain.
5. Reservation Contract
   Pay a deposit (usually €3,000 or €6,000 for more expensive properties) to reserve the property for 30 days.
   The deposit is non-refundable unless otherwise stated in the contract. This deposit will be part of the sales price if the purchase goes through.
6. Hire a Surveyor
   Especially recommended for rural or off-plan properties.
   Surveyors provide a comprehensive report with a detailed snagging list to detect build flaws and negotiate the sales price.
7. Sign an Arras Contract
   Pay 10% of the asking price, non-refundable for buyers, with penalties for sellers if they withdraw.
   Signing an arras contract is a serious commitment; it’s crucial to have a lawyer review it.
   
8. Completion
   Typically 30 to 45 days after signing the arras contract, depending on mortgage requirements.
   The Title deed (escritura) is signed at a notary, the remaining balance is paid, and possession is transferred.
9. Property Registration
   Register the property at the land registry and pay the Property Transfer Tax.
   Registration usually takes 1 to 2 months. Ownership can be verified with a nota simple service.
10. Post-Completion
    Manage utilities, taxes, and other administrative tasks.
    This includes connecting utilities, paying local and national property taxes, enrolling in the local town hall census (padron), joining the community of owners, and making a Spanish will to handle your estate.
11. Engel & Völkers can help you !
    Finding properties : Engel & Völkers can help you find properties that meet your criteria.
    With Engel & Völkers, navigating the Spanish property market becomes a seamless and efficient process, ensuring a successful and rewarding investment experience offering the best advice.
    
    

3. Conclusion
The Spanish real estate market offers significant investment potential for those who are well-prepared. Historical trends, like the post-2008 decline, highlight the need to learn from past behaviours. Currently, high urban demand, limited land, and a robust tourism sector provide market resilience.
Key steps for successful investment include thorough market research, financial planning, and engaging a reliable lawyer. Secure financing, manage exchange rate risks, and work with reputable real estate agents like Engel & Völkers. Conduct due diligence, including inspections and property evaluations, and ensure a legal review of the purchase agreement.
Stay informed about market trends, attend real estate forums, and network with local experts. Despite expected price stagnation after 2024, urban areas and tourist regions will likely see continued demand and price stability.
With strategic planning and expert guidance, investing in the Spanish property market can be highly rewarding, maximizing opportunities and achieving successful outcomes.