Along with Portugal, Greece and France, Spain has for many years been the destination of choice for British second home owners, but has this trend been affected by the twin challenges of Brexit and Covid?
In addition to this, what are the main property investment trends in Spain and the Spanish islands at the moment, and is buying off-plan in Spain now back on the agenda again after many issues with this way of buying in the wake of the global financial crisis?
We spoke to Alexander Beulich, managing director of Domus Vivendi Group, developers of ‘high-quality real estate in the Balearics’, for his thoughts on the above and the biggest reasons to invest in Spain and its islands.
What are the main property investment trends being seen in Spain and Balearics at the moment?
Buyers are typically looking for ‘second’ homes – larger-sized homes preferably with private gardens or roof terraces. There has always been a strong demand for penthouses and even more these days. Of course, quality and location are major aspects of the buying decision.
Is this being affected by Covid and Brexit?
Yes, as before Covid, smaller apartments as weekend hideaways were mostly in demand more so than now. Brexit has affected the real estate market on the Balearic Islands in that British citizens are looking more for solid investments in ‘safe havens’.
Thankfully, Mallorca and Ibiza fit the bill. Covid and Brexit have made it more difficult for Brits to buy here due to travel and purchase restrictions. Nevertheless, our team of lawyers and tax accountants offer various solution to overcome any hurdles.
How important is the British market to Spain and the Balearics? Will this change post-Brexit?
The British market is of major importance for the Balearics. Flight connections and infrastructure on the islands (schools, healthcare, lifestyle, restaurants, etc.) make it very convenient for the British clients to own properties here.
Brexit has increased administration matters in terms of travelling and buying, however the demand for properties in solid locations with a major focus on value, sustainability and appreciation potential has risen, and is predicted to rise further despite Brexit. Investors and private buyers keep looking for property investments outside of Britain – preferably in the sun!
What should investors know when it comes to investing in Spain and the Balearics? Are there any potential pitfalls to be aware of?
Of course, and as in all investments, solid due diligence has to be made. There are many properties or plots on the market, which for example have no license or are lacking in qualities. Also, location matters most beside quality.
The southwest of Mallorca, between Palma and Andratx, where we build only, is the most solid location. Properties here cost more than in the north of the island – but will also sell for more whereas other parts of the island are more volatile. The same counts for Ibiza, where locations between Santa Eularia and Playa d’en Bossa are the most sought-after for this reason.
Is buying off-plan in Spain now much safer again, after the issues faced before and during the global financial crisis? Would you recommend it as a way of buying?
We sell around 70% of our properties off-plan. Our contracts are very solid and ‘buyer-friendly’ without any pitfalls. We have been on the market for over 30 years and know what we do – and so do our clients. Every payment to us is secured by a bank guarantee.
What are the biggest reasons to invest in Spain and the Balearics?
300 days of sunshine per year, a fantastic infrastructure and international connectivity, and a solid market which has been rising consistently, despite the recent pandemic. The Balearics are a crisis- proof safe haven for investments – if quality and location are chosen wisely.