Property News from Spain

Real estate agencies are saying "It's a good time to sell". They are reminding people that the price is stabilising at its maximum and that the demand still has purchasing power and there is still attractive financing available.

As explained by the General Council of Official Associations of Real Estate Agents of Spain, the increases in interest rates that the European Central Bank has applied and those that are yet to come will cause a fall in housing prices, as well as a decrease in the purchasing power of potential buyers and a tightening of financing conditions for mortgages.

According to the agency any owner who wants to sell should take advantage of the current conditions, which adds that in this new scenario, "mortgages are more expensive for both the individual and the investor, but it is with the individual that this increase is going to have a greater impact. The drop in housing prices predicted by the ECB (of around 9% in two years) is logical because there is going to be a part of the demand that is going to disappear from the market and, with equal supply, prices will drop".

The General Council of the COAPI (Consejo General de Colegios Oficiales de Agentes de la Propiedad Inmobiliaria) believes that some buyers are going to try to advance purchases to avoid future increases in both the price of housing and mortgages. However, there will also be another profile of individuals or investors who can afford to wait and decide to operate long-term, once the macroeconomic environment has stabilised and access to financing is less expensive.

In fact, the organisation emphasises that "in the coming months a window of opportunity will open due to the general fall in prices that will benefit investors who have liquidity and can afford to wait for the right moment to buy."

Where is the cheapest city in Spain to live? Establishing which is the cheapest city in Spain is not an easy task, as many aspects need to be taken into account such as the price of housing, taxes or transport.

In this case, it is also important to assess income, as a general rule, depending on the city in which you reside, the salary will be higher or lower. Based on Kelisto's latest study, which was conducted in 2018, there is one city that outperforms the rest.

Assessing the purchase of housing, taxes, transport costs and income levels of the different cities in Spain, it was concluded that Palencia was by far the cheapest city in Spain to live in, with a cost of living 30.06% below the average. After Palencia was Melilla (17.13%) and Lugo (16.94%).

According to the ranking carried out by Kelisto, the cheapest cities in Spain to live in are the following:

1. 1. Palencia - The Cheapest City in Spain
2. 2. Melilla
3. 3. Lugo
4. 4. Logrono
5. 5. Teruel
6. 6. Caceres
7. 7. Zamora
8. 8. Avila
9. 9. Soria
10. 10. Leon

Of course, the fact that they are cheaper to live there does not mean that the salaries are respectively lower. In the case of Palencia, for example, the average annual income is 23,654.17 euros.

As declared by Bankinter, in Ciudad Real the square meter costs 1,018 euros, so it can be said that it is the cheapest place to buy a home today (but not to reside). After Ciudad Real we find Ávila (1,037 euros per m2), Soria (1,041 euros per m2), Lugo (1,050 euros per m2) or Castellón (1,078 euros per m2).

In the case of renting housing, Orense is the cheapest city to rent, with an average of 5.9 euros per square metre. It is followed by Ciudad Real (6 euros m2), Zamora (6 euros m2) and Lugo (6.1 m2).

As far as the IBI (Real Estate Tax) is concerned, as explained in the OCU, San Sebastián is the city whihc has the lowest IBI at 147 euros. It is followed by Bilbao (153 euros), Vitoria (258 euros) and Pamplona (314 euros).

The price of public transport is also a great conditioning factor in understanding the cheapest city in Spain. FACUA has studied the price range and has established which city has the lowest cost of public transport. In this case, it is Logroño, with a price of 0.53 euros for a bus ticket.

It is followed by Ávila (0.55 euros), Salamanca (0.59 euros), Palencia (0.60 euros), Santiago (0.60 euros), Vitoria (0.60 euros), and Segovia (0.60 euros). The most expensive route is in Madrid at 1.83 euros for the bus ticket.

If you want to travel and not spend too much, it is best to choose one of the low season times of the year for visiting. This means that you will have to forget about travelling in summer, at Christmas, at Easter and even on 'puentes' or holidays.

The best dates to travel will be just after the summer, that is, during the month of October, or just after the Christmas season, in the middle of January. They are the cheapest trips you will find, so you could save even more than half of what it would cost you in high season.

Where are the most expensive cities to live in Spain?

Now we know the cheapest cities to live in Spain, let's look at the most expensive cities to live in. To carry out this ranking, similar aspects were  taken into account:

1. 1. San Sebastian
2. 2. Barcelona
3. 3. Vitoria
4. 4. Madrid
5. 5. Palma de Mallorca
6. 6. Valencia
7. 7. Girona
8. 8. Albacete
9. 9. Oviedo
10. 10.Tarragona

In the case of the most expensive cities to live in, in most cases they are also the ones that offer the lowest quality of life, so they are the least recommended to settle and live in, although they are usually good tourist destinations given the wide range of entertainment that is on offer.

This is a question that is being asked by so many considering a move to Spain either permanently or part-time. However, it is not an easy question to answer. It will depend very much on your needs and lifestyle requirements. There’s a lot to take into consideration when choosing a place to live; job opportunities, healthcare, schools if you have kids, affordable accommodation and so on…

NomadList.com has just made the choice a little easier by shortlisting the best places to live. The list offers recommendations with a Nomad Score which is based on a number of factors such as cost of living, healthcare, weather, family life and numerous other data points. All with the objective of helping you to decide which is the best city to live in and/or work from remotely.

The list is topped this year by Barcelona, knocking Tenerife off the Nº1 spot. The fact that Barcelona boasts some of the best job opportunities while having a beach at the same time is a strong selling factor for those looking to work in Spain. However, Tenerife’s warm climate all year round and large ex-pat community has enabled it to stay near the top at second place. This is a great place for families to establish their homes by the sea at a reasonable price.

No matter which city on the list you choose, each one has its own unique selling points so if you are in doubt why not take a holiday or rent an apartment for a few months or so to properly check out the area before taking the plunge and that way you can be sure the place ticks all your boxes. So why not get cracking and start your Spanish property hunt!

Start Hunting!

Costa del Sol property bargains are easy to find if you know where to look. And for this reason, Eye on Spain is here to help with a selection of affordable properties for sale along the Costa del Sol. From beachfront apartments, village houses with sea views to apartments with swimming pools, all of these properties are for sale for under €100,000.  Take a look!

For Sale: Over 200 properties with sea views on the Costa del Sol

The price of second-hand housing in Spain has registered a slight decrease of 0.1% during the month of August, standing at 1,825 euros / m2, according to the latest property price index. If we look at the last quarter, the price has risen 1.1% and if we look at the data for August 2020, the year-on-year increase is 5.2%.

The price has fallen during the month of August in 11 Spanish regions. Castilla-La Mancha (-1.1%) led the fall followed by Aragon (-0.9%), Castilla y León and Navarra (-0.7% in both cases). However smaller drops were registered in Madrid, the Balearic Islands Asturias (-0.4% in the 3 regions), the Valencian Community (-0.2%), Euskadi, Catalonia and Galicia (-0.1% in the 3 cases). On the contrary, Andalusia (1.4%) showed an increase in prices followed by Cantabria, Canarias and La Rioja (0.4% in the 3 territories). In Extremadura, prices grew by 0.2%, while in Murcia they remained stable.

The Balearic Islands with 3,196 euros / m2 is the most expensive autonomous region followed by the Community of Madrid (2,943 euros / m2). On the opposite side of the table, we find Castilla-La Mancha 866 euros / m2), Extremadura (927 euros / m2) and the Region of Murcia (1,055 euros / m2), which are the cheapest communities.

20 provinces registered higher prices than a month ago. The greatest increase was seen in Almería (1.5%), followed by Ourense (1.2%), Guadalajara (1.1%), Santa Cruz de Tenerife (0.9%), Malaga, Guipúzcoa and Pontevedra ( 0.8% in the three provinces). On the other hand, Valladolid (-5.8%) heads the list of provinces in which the price has fallen during the month of August, followed by Albacete (-2.4%) and Valencia (-2.1%) .

Guipúzcoa is the most expensive province to purchase a home (3,209 euros / m2) ahead of the Balearic Islands (3,196 euros / m2). They are followed by Madrid (2,943 euros / m2) and the province of Barcelona (2,719 euros / m2).

Ciudad Real is the cheapest province with a price of 750 euros for each square meter. They are followed by Cuenca (779 euros / m2) and Toledo (803 euros / m2).

Buying a house or flat in the Valencian community is 37% cheaper now than before the crisis, in 2006, although it has risen 11% in 5 years

The cumulative price of homes for sale has risen in the Valencian Community by 11% in 5 years but has fallen by -37% in 15 years (2006). If three decades ago an average of 181,600 euros was paid a flat with 80 square meters, now 113,700 euros would be the average price. This is reflected in the study 'Cumulative variation of housing in Spain 2021' prepared by the Fotocasa Real Estate Index.

However, if we analyse what was paid for a home for sale 5 years ago, the average price per square meter of the home has increased by 11% in the Valencian Community, from 1,281 euros / m2 in June 2016 to 1,422 euros / m2 in June 2021. Thus, Valencians 5 years ago had to pay an average of € 102,480 for an 80 m2 home, compared to €113,768 that would be paid now.

With regard to the province capitals, the cumulative increase in sales from highest to lowest in the Region in the last 5 years (since 2016) is 29% in Valencia capital, 12% in Alicante and 10% in Castellón de la Plana.

Despite the 29% increase in the sale price in Valencia capital since 2016, the fall in these 15 years stands at -28%. Thus, for a home with 80 square meters, 231,177 euros would have been paid 15 years ago, while in 2016 they would have paid 129,686 euros and in 2021 they would pay 167,154 euros.

In the city of Alicante, the price of homes for sale has risen 12% in the last five years, although the fall in 15 years stands at -26%. Thus, if 15 years ago an average of 175,448 euros was paid for an 80 m2 apartment, 5 years ago 114,881 euros would have been paid and now 129,132 euros.

As for Castellón de la Plana, it has risen by 10% in five years but fallen by -42% in 15 years, meaning one would have paid an average of 177,086 euros in 2006 for an 80 m2 apartment, 93,532 euros in 2016 and 102,466 in 2021.

The price of second-hand homes has fluctuated a lot over the last 15 years. Since it reached the maximum price in April 2007, the current price is 37% below. However, although the price of second-hand housing is still very far from the prices of the real estate bubble, it has increased in the last 5 years by an average of 16%, explains the Director of Studies and Spokesperson for Fotocasa. According to the expert, at the moment, the price is quite stable and we will not see big increases or decreases in price during 2021.

When you are on the hunt for a property in Spain, the first things we tend to focus on are obviously the location, price, size, and most likely the state of the property. However, there is another incredibly important factor in buying a house in Spain that so many people seem to completely ignore or completely underestimate. This is the property's orientation. Knowing how many hours of sunlight the house will get at different times of the year can make a huge difference to how much you will enjoy your house or more importantly your flat. Making the wrong decision could mean rendering your terrace or balcony useless in the summer because it is way too hot and gets no crosswind while at the same time useless in winter as it is always damp and takes days to dry.  So let's take a look at each orientation to find out which orientation is best in different situations and regions:

North facing: If a property in Spain faces north, you will only enjoy the sun's rays in summer, specifically in the early morning and late afternoon. This orientation is recommended in areas with a hot climate for most of the year. However, in winter you will get no direct sunlight at all and thus can get rather cold. Central heating will almost definitely be a must practically anywhere in Spain.

North-east facing: This orientation will allow you to enjoy the sun until midday for most of the year, but not in winter. For this reason, it is not recommended for cold areas or areas with high humidity. In winter your terrace will get no direct sun and thus it will take days on end for it to dry after mopping it.

East facing: This is probably the best option for those who want the sun shining in for breakfast. When east facing the house gets its sunlight almost all year round from sunrise to midday. It is definitely an option to bear in mind if the property is located in a hot region and you want to enjoy cooler afternoons with no direct sunlight - assuming you are looking at apartments or terraced houses. It is without a doubt the best orientation if you are thinking of buying a property on the east coast, for example in Costa Blanca close to the beach. This will also mean that you will get the afternoon cross-breeze from the sea coming in from the east.

South-east facing: In this case, you will get most of your sunshine during the winter and, specifically, from just before midday until well into the afternoon. The rest of the year, on the other hand, sunlight is greatly reduced. However, this is one of the best orientations, as it warms the house in winter and is not too hot in summer, but again, depending on where you live in the country. 

South facing: You will enjoy the sun in autumn, winter and spring, while in summer only during the middle of the day, unfortunatley, the hottest hours of the day. For this reason, a property with a south orientation is recommended for places where it is quite cold all year round and perhaps not the best choice for anywhere in the country. If you do live in a hot region it will basically mean air conditioning 24 hours a day in the summer, but no central heating for most of the winter.

South-west facing: In this case, the sun shines from midday to sunset in spring, summer and autumn, while in winter it shines most of the day.

West facing: This orientation is recommended for moderately cold climates, as the house will receive sun almost all year round from noon to sunset, including the summer, once again, perhaps not the best option for the hottest areas of Spain as it will make the afternoons very uncomfortable.

North-west facing: Between spring and autumn the sun will shine on the property throughout the afternoon until sunset, although in winter it will only shine for a very short time and will only receive sunlight towards the end of the afternoon. 

This is something you really need to have clear before you settle on a property. Because once you are living there it is probably the only thing that can never be modified. Take time to study the best orientation for you and don't underestimate how important it is in Spain, it can make or break a property.

The following website tool simulates the movement of the sun in any location, and therefore you can estimate the light and shadow that that house will have all year round by selecting different dates throughout the year. Using the touchscreen on your phone find your location and then click on the button 3D, you can then adjust the date and the time of day to see how the sun moves in relation to your property.

**  CLICK ON LINK - 3D SUN MOVEMENT MAP **

"Is the electricity going to go up or is it going to go down?" That's the question that everyone is asking because as of June 1 the electricity bill will be changing.  The experts agree that it will not go up but it will go down for those who make a little effort. The Government insists that it was looking for a solution to help change the way that we consume electricity so it can be more efficient and sustainable.

Let's see what this actually means in real life. Will the changes affect everyone? Yes. But not equally or immediately. Those who will notice it first are those who are in the regulated market compared to those who are in the free market. But do you know which market you are in?. It is important to know the difference between the two: what changes is the price that you are going to pay for the energy. In fact, your bill will tell you the answer to that very important question. You will need to identify the company name of your energy supplier. Don't just trust the logo as some companies are in both markets and use the same logo. Here is a table to help you identify in which market your supplier is. If your supplier is not on the list you may need to speak to your company and enquire.

In the past, the entire electricity market was regulated and prices were set by the government.

The market began to be deregulated in 1997. Within this process, 2009 was a very important year:

Since then, consumers have been able to choose who they are going to pay their bill. At the moment, they can choose from almost all companies which sell electricity.

The market liberalisation process is not yet complete, however, and the regulated market still exists. The two markets share two of the three basic parts of each electricity bill:

Access fees: these are set by the government and are used to pay the costs of maintaining the electricity grid and transporting the electricity to your home.

Taxes: Special tax on electricity and VAT.

What is different with the bill is the price charged for producing electricity. 

The 10.7 M households that are in the regulated market - PVPC - had up to now six rates. As of June 1, everyone contracting less than 15 kW will go to a single rate. And they will be billed more or less depending on what time of day they turn on the light or turn on the washing machine.

To do this, the day will be divided into three time-bands:

Peak: It will be the most expensive. It will be between 10 am and 2 pm and 6 pm and 10 pm, from Monday to Friday.
Middle: It will have an intermediate cost. Between 8 a.m. and 10 a.m., 2 p.m. and 6 p.m. and between 10 p.m. and 12 p.m., Monday to Friday.
Low: It is the cheapest of the three. It will be established between midnight and 8 a.m., Monday through Friday. On weekends and national holidays.

At peak hour it will be 2.5 times more expensive than the middle tariff and that in turn will be more than 1.5 times the low tariff, according to calculations by the specialized energy consultancy Ingebau.

So does that mean that to save electricity we will have to put the washing machine on at 2 in the morning? Yes. If you don't do anything to change your consumption, the impact on your bill will be neutral. This is designed to shift consumption to periods in the day when there is less demand and ultimately to renewable energy supplies.

These changes are included in the Government's commitment to a green economy, in which the electric car will play an important role. As a result, they are laying the path so that these vehicles can be recharged during the night when the electricity will be cheaper, and as a result, reducing the demand on the network during the working hours of the day. More and more appliances can be programmed these days to be charged at specific times. Also instead of ironing on a Friday, you can iron on the weekend, it will be cheaper.

Additionally, the new bill will allow you to contract two suppliers (up to now only one was possible). One for the peak period and another for the middle or low. For example, a consumer could increase his or her contracted power at dawn to charge an electric car, the cheapest time of the day.

If you do not communicate anything to your company, a single power supply will be maintained, the one you currently have contracted.
In the new bill, the fixed price for power goes down and the variable part goes up, that is, the actual consumption we have every day. All these changes will be automatic for those who are in the regulated market. 

But what about those who are in the free market?

Those 16 million households will have to consult with your company and study the prices and packages that are offering. Remember you can always change company.

The invoice that we will be sent out from June 1 will have a new design for those in the regulated market:

It will only have two pages with simplified content to make it much easier to understand. It will incorporate a QR code that will take you directly to the CNMC rate comparer so that everyone can choose the one that best rates according to their needs.

If you want to check prices in your postcode this is the link:

https://comparador.cnmc.gob.es/

If you like to sleep to the sound of the waves or take an early-morning sunrise walk along the waterfront or simply enjoy having your breakfast on a balcony while looking out to sea, then you should start looking at the properties with sea views up for sale in Spain. There is no need to spend a fortune to enjoy a little coastal life, be it for a holiday home or a retirement home in the sun there is something for everyone...

CLICK HERE TO SEE PROPERTIES

If you have a property in Spain or you are looking to buy a property in Spain and want to rent it out long-term or even short-term, being insured is, without a doubt, the only way to sleep peacefully at night and the best way to free yourself from the worries of rental default and property damage.

The best insurance is the one that covers non-payment of rent (Seguro de Impago de Alquiler), but there are policies that cover much more than that. They offer amongst other things advice to the owners on any problems related to the tenancy or the tenants and even problems they may have with the community associations.
It is in essence legal defence insurance that protects the owner against any problem that may arise with the rental of their property, from non-payment to a disagreement with the tenant over who should pay for repairs or problems which may arise with the community or neighbours. legal fees are normally covered in full, in addition, in the event of the tenant not paying the rent, the insurance company will forward you the unpaid monthly payments while the case is being handled whether it be an eviction or a negotiation.

The insurance company will try to mediate with the tenant from the first month that they stop paying, warning them of their contractual obligations. And, in situations where it is not possible to reach an agreement, they will set in motion the legal procedures necessary, allowing the landlords to take a step back and avoid this unpleasant process.

Additionally, insurance companies will also serve as mediators for any problems that may arise between the tenant and the neighbours. This really takes the pressure off and gives you added peace of mind, especially if you are not living in Spain. Insurance companies which centre on this service are professionals and specialised in rentals, so rest assured any necessary procedures will be carried out as quickly and reliably as possible. A claim for non-payment can mean a significant outlay of cash in addition to the lost income from unpaid rent and especially so if you are not present in the country, so having rental insurance can be an important safety net, especially if the property is mortgaged and you rely on the monthly payments to meet your mortgage requirements.

Not all rental insurances are equal, so make sure you check carefully what is and what isn't included and the checks that are made before giving the green light to a tenant. Before taking out the policy, the insurance company should study the tenant's solvency status. It is always better to carry this out before signing the rental contract, as it will be easier to ask the tenant for all necessary documentation beforehand and, if the study is rejected, to find a solution by including additional documentation or perhaps a guarantor.

Rental default insurance policies in Spain usually cover the following:

• Upfront payments of rent due, normally up to 12 months. This starts to be paid when the claim is processed, this will have a retroactive effect.
• Legal defence and claims if the tenant breaches the contract.
• Criminal liability defence
• All lawyer's fees, solicitor's fees and fees included in any management related to the rental.
• Protection against vandalism to the property.
• In the event of an eviction, the costs of a lock and locksmith are included.
• The insured will also normally have a phone line at his or her disposal to resolve any legal queries related to the property.

The price of rental default insurance in Spain varies depending on the services included in each policy, as most companies offer flexible policies with add-ons that can be adapted to the individual needs of each property owner. For example, you can choose the number of months rent you want the insurance to cover: usually, insurers offer up to a maximum of 18 months coverage, although most customers opt for 12 months as it reduces the cost and gives ample coverage for most cases. However, policies are available from around 4 months coverage for short seasonal stays too.

On average, the cost of rental default insurance will generally be between 3% and 5% of the annual rent.

For rental default insurance to be approved, a study of the tenant's solvency will be carried out. Tenants may not spend more than 40% of their net income on rent and one of them must be a permanent tenant with a probationary period or have been with the same company for more than one year. Guarantors can be added if the tenant's income or seniority is not sufficient.

If the tenants are salaried employees, the minimum documentation requested by the insurance companies will normally be the following:

• last two payslips
• employment contract
• ID
• The application form signed by the tenant/s - giving the insurance company permission from the tenant to officially check the documentation.

If the tenants are self-employed, as a minimum, they are asked for:

• Their last income tax declaration (IRPF)
• Their last two payments to the Social Security
• ID
• The application form signed by the tenant/s - giving the insurance company permission from the tenant to officially check the documentation.

And if the tenants are pensioners:

• Pension certificate issued by Social Security
• ID
• The application form signed by the tenant/s - giving the insurance company permission from the tenant to officially check the documentation.

So, if you want to rent out your property or start a buy-to-rent business in Spain and be sure to receive your monthly payments, this route may well be the best solution to provide security and peace of mind for short and long-term rentals. You are effectively bringing on board a property partner who will help you manage your property from a legal perspective and give you financial coverage when necessary.