Spanish property prices on the rise

The housing market in Spain is in full swing, and house prices in Spain have experienced a sharp increase in the first months of 2022. Property developers in Spain have had to increase the prices of newly built houses and flats by an average of 15%.

Inflation affects house prices in Spain

One reason for the price increase is to hedge underlying inflation. Inflation in Spain currently stands at 6%. More or less the same rate of inflation also applies in the Netherlands, Belgium and Germany, where house prices have been rising sharply for some time.

Rising house prices in Spain due to higher construction costs

The rise in house prices in Spain is partly caused by the higher costs of raw materials and building materials. Construction companies and project developers are confronted with higher costs for concrete, aluminium and paint. This year, price surcharges are also expected on electronic equipment used in house construction and furnishing, such as lighting, kitchen appliances and air conditioning.

Will demand for property in Spain continue to rise?

The third reason for the currently rising prices of houses in Spain is the overall increased demand, especially from Spaniards themselves, with the national market picking up strongly over the last 6 months.

Investors from the Netherlands, Belgium, Germany and the Scandinavian countries also seem to be opting more and more for investment in properties in Spain. The demand for property on the east coast of Spain is high, and many villas, houses and flats are currently being sold.

Buying a property abroad is popular. These are mostly Spanish holiday homes and newly built flats, which may or may not be part of a residential complex by the sea. A little further inland on the Costa Blanca and Costa Cálida, golf properties are also offered on and near well-known golf courses.

Is it attractive for a private individual to invest in a holiday home in Spain?

Despite the increased house prices, buying a second home in the Alicante area is still a very attractive investment.

Compared to house prices in Northern Europe, a house purchased on the Costa Blanca or Costa Cálida can be an appealing investment. Not only because of the possibility of making an attractive return by renting out the property, but you can also enjoy the house yourself during a short or long stay in Spain. After all, the climate in the working area of estate agents Ibérica-Estates has been declared the healthiest climate in all of Europe by the World Health Organization (WHO).

If you would like to have more information about return on Investment on your future investment in Spain please feel  free to contact us straight away.