Investing in Costa del Sol when house prices are on the Rise
House prices in Spain increased in 2021, the busiest year for real estate in the country since 2008. High levels of activity were seen in Andalucia as well. For instance, sales increased by 43,1 percent as prices soared by 8,1 percent. Similar developments are expected in 2022, according to experts.
Real estate buy-to-let investing is becoming increasingly popular in Spain, particularly in cities like Madrid, Barcelona, and Malaga, where it is viewed as a safe refuge for cash. Rents don’t grow in lockstep with home prices, so prospective buy-to-let investors are caught in a tight spot. As a result, we are considering making an investment in Andalucia while property values continue to rise.
To begin, let’s examine the data.
It’s a good idea to conduct some research on the rental market before making any buy-to-let investments.
In Andalucia, rental income is good.
It is estimated that in 2021 the Andalucian ROI would be 6.12 percent, based on data from companies like PiSOS y EUROVAL. The rate is slightly lower than the 6.38 percent national average.
Andalucia’s Huelva real estate offered the greatest returns of 7.66 percent and Cadiz, the lowest, according to the medians (4.63 percent ). Depending on the kind of property, new builds bring in 4%, while resale homes bring in 5.9%, according to studies.
A list of places to rent in Andalusia
Andalucia accounts for about a quarter of all Spanish rental properties, according to Euroval. Malaga is the most populous province, accounting for 8.3 percent of the total. After Seville, but with a far smaller percentage (3.7 percent ).
What’s the end result? When estimating profits, keeping an eye on the local economy is critical.
Most expensive rents in Spain
Andalucia has been named the most expensive rental area in Spain in a new poll by Idealista. Benahavis, Marbella, and Sotogrande are all located on the Costa del Sol, where the average monthly rental price is €2,709, €2,130, and €2,119, respectively.
The Costa del Sol was also home to two additional top ten destinations. Tenth-placed Alhaurn de la Torre had an average monthly rent of €1,347, while Estepona was ninth at €1,465.
What’s the end result? Benahavis, Marbella, Sotogrande, and Estepona were all among the most expensive places in Spain to buy a home, while Estepona was the 14th most expensive.
At this point, most of the Maths Analysts have agreed that investing is most difficult when prices are growing in the property market. This may sound counterintuitive, but it’s because you can’t necessarily demand a greater rental cost just because you spent more for the item you’re renting.
The problem is that your prospective renters can only pay rents that are equal to their income, and wages aren’t keeping pace with property prices. It’s worth noting that in Andalucia, the latest available data reveals that the average monthly income in 2020 is expected to be about €1,837, an increase of 3.6 percent over 2019. (8.1 percent ). Sell Property in Spain Fast.