If you are thinking about buying property in Spain, there are many factors to take into consideration, as well as personal preference. On this article, we study and analyse the best places to buy a property in Spain, North to South, West to East, so you can make the right choice for your needs.
In Spain you can buy castles, monasteries, whole villages, vineyards, religious buildings, villas, apartments, almost anything you can think of! The prices vary depending on the region, but you can get a beautiful castle in Galicia for as little as 600k.
Spain has a big amount of these unusual properties because of its history, with so must coastal area, it was frequently attacked by pirates. For protection, most towns build watchtowers and castles. The cost of keeping these buildings have forced councils to sell.
As a large nation, and with most of its people living in urban areas and along the coast, together with a widespread migration from rural to urban regions, has left countless towns deserted and open to buy as whole.
12% of Spain’s population are foreigners, meaning you are not on your own and others have done it, tested it, and found it a good idea. With more than 750K property transactions made a year, the sun, food, good climate all year round and the 8000 kms of coastal beaches are the main factors that contribute to making Spain the country of choice.
An analysis made by different property websites concludes that there are preferred cities depending on the nationality of the buyer, if being close to fellow expats is an important factor for you.
UK nationals prefer regions like Madrid, Barcelona, Alicante or Málaga. Swedes’ nationals prefer tourist places like Nerja (Málaga), Mijas (Málaga), Torrevieja (Alicante), Marbella, Orihuela (Alicante) and La Palma, whilst French nationals by majority go to Barcelona, Alicante, Castellón and Valencia.
While Spain continues to be at the top of the rankings for foreigners to buy property, Spain’s high taxes and a continued increase in property prices (10% in the last year) may drive consumers to places like Italy with laxer economic policies or Greece with much lower property prices.
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Where is the cheapest place in Spain to buy property?
Rural and small urban areas within high-ranked cities have lower prices, which could be a good compromise if you want to be close to places like Málaga, Marbella, or Madrid without spending a large amount of money.
Castilla La Mancha, Valencia Region, and Andalusia are the cheapest places in Spain to buy property. Their property prices are all below 1000 euros per square meter.
According to Idealista, a property website, Alcaudete de la Jara in Toledo, is the cheapest place in Spain to buy property at 329 euros per square metre. This beautiful town is only 2-hour drive to Madrid and 1 hour drive to Toledo, the capital of Spain in the late 500 for almost 200 years. This history of Toledo is the reason why there are so many Arabic medieval monuments.
In Alcaudete de la Jara there are 1648 population, 115 of which are foreigners, 58% Rumanians, 4.8% French, 4.3% Germans and 5.2% Chinese.
In Castilla La Mancha, there are other towns with similar prices like Cabezamesada at 400 euros per square metre, El Carpio de Tajo at 409 or Miguel Esteban at 443 euros.
Valencia regions also holds the top of the list at the cheapest places to buy property in Spain. This region includes Alicante, Castelló and Valencia. Although metropolitan Valencia´s prices are over 2000 euros per square meter, in places like Ador (Valencia) you can find property for 564 euros or Algueña (Alicante) at 487 euros or the popular Alcalá de Chivert at 583 euros.
Valencia is a popular destination, is the birthplace of the paella dish and where the celebration of Las Fallas takes place, with 20 kms of beach and a large cultural history, is definitively worth a visit.
It has over 5m people across the region, 15% of which are foreigners, the majority being Rumanians, Moroccans and British.
Alicante and Costa Blanca
Costa Blanca is the tourist coastal area of Alicante, both part of the Region of Valencia, also known as the Comunidad Valenciana. Alicante is a port city with a large variety of activities and great nightlife. This city looks to the sea. You can walk through it thanks to el Paseo de la Explanada, a long and beautiful promenade. Or you can look at the sunset at the top of Santa Barbara Castle.
The cheapest place to buy property in Alicante is Algueña at 487 euros per meter square or Monovar at 646 euros.
Situated in between Valencia Region and Andalusia is also worth to mention as you can find good deals on property prices. Less developed than its counterparts, it holds the beauty of hidden Spain, with Iberian settlements, caves, and ruins at the edge of a natural reserve which includes the Calblaque Beaches, a beautiful series of soft white sand beaches with crystal clear turquoise water.
The cheapest places in Murcia to buy property are Albanilla at 610 euros, Bullas at 434 euros, Cehegin at 514 euros, and Moratalla at 557 euros per square meter.
Andalucía, Costal del Sol and “pueblos blancos”
Andalusia is the region of Southern Spain. It includes Almería, Cadiz, Córdoba, Granada, Huelva, Jaén, Málaga and Seville. La Costa del Sol is 300 kms of the beach from Sotogrande to Nerja, 150 kms of which are in Málaga province. “Pueblos Blancos” are the rural towns above Costa del Sol. Some of these are relatively cheap areas to buy property.
The Málaga province is ranked as one of the safest places in Europe and it is at the top of the destination list, although Granada holds the rank on cheapest property in the rural areas. We can still find many opportunities in the province of Malaga. It’s known by its cultural museums like Alcazaba or Picasso, its monuments and the vast amount of leisure activities to do means it’s not short of entertainment. With over 300 days a year of sun and its distinct cuisine it has established a powerful brand identity that is well-known to tourists and industry insiders everywhere. As stated by Forbes, Málaga It is currently among the 20 most well-liked locations for work, live and invest, with a multitude of private and public schools, like The British School of Málaga. It appeals to families, retired, working people, investors and its very open-minded for the gay community.
Their analysis also confirms that the cheapest place to buy property in Málaga is Teba at 538 euros per m2, followed by Alameda at 554 euros, Villanueva de Algaidas at 631 euros, Humilladero at 688 euros, Archidona at 714 euros and Fuente de Piedra at 773 euros.
Puerto Serrano in Cadiz at 436 euros per square meter is also an alternative for the west of the Costa del Sol and to the east, Abrucena in Almería at 598 euros or Fines for 581 euros the square meter.
For those buyers who prefer a middle-range price, La Viñuela in Málaga at 1747 euros, Algarrobo at 1552 euros, Canilla de Aceituno at 1332 euros or Coin for 1365 euros for quare meter.
You can check the value registered of the property in the spanish catastro, now called the value of reference. There are a lot of factors that determine the value of a property like:
The type of building, e.g., a flat, a standalone house, a luxury villa, or a loft.
The surrounding areas and facilities, such as supermarkets, means of transport, green areas, schools, health centres and public services.
The size, quality, and thermal insulation of the construction
The year it was built
The level of noise and safety on the streets of the neighborhood
The distance to the city center; if it’s a rural area (sometimes in need of an AFO certificate), the distance to the nearest village
The state of the building: has it been recently renovated? has it passed a technical test? what is the current state of the facade?
Is space distributed in a functional way? How easy is it to use?
If it’s near the coastline or if it has a swimming pool.
The quality of the views from the building.
The orientation of the building and the amount of light in the rooms.
Based on this list, you can review the properties you visit and find the best fit for your needs. The more requirements it meets, the easier will be to resell the property and the better the investment. Once you have found a place that interests you, it will be time to dive into the extensive paperwork and applicable taxes. For this, we suggest reading our checklist for buying property in Spain.
In Spain there is an unwritten rule when the time comes to negotiate the purchasing of a house, first and foremost do your research first. How long the property is been for sale, the condition is in, the services provided, the value of reference, etc. Once you are ready, you should know the average property is sold at 14% less than the original value.
Where is the best place to buy property in Costa del Sol as an investment?
Málaga city has just been voted “The Best city in the word” by 2022 Reader´s Choice Awards and if you are thinking of buying to sell or rent, then you are looking at location, location, location, as the best place to invest in Spain. Marbella, Madrid, The Baleares and Barcelona take the lead on property bought worth more than 1M euros. Property prices are estimated to continue to rise another 5% in the year 2022, and although they have been doing so since 2012, they are still lower than in 2007.
To calculate the ROI of your investment you need the exact figures of what the property includes its worth, cost of acquisition, cost of repairs, size and number of bedrooms. Mortgage terms are also important including loan size, closing charges, and interest rate. Taxes and fees – In addition to the purchase price you should prepare to pay between 10% and 13% of the original purchase price for these. Do not forget the maintenance repairs, utility payments, community fees and property taxes such as IBI and insurance. Most of this information will be analysed in the property conveyance carried out by your lawyer.
Estimated cash flows obtained from monthly payments by tenants must be carefully considered when borrowing money to buy rental properties. Failure to do this might result in a negative cash flow.
Purchasing property to sell (also known as real estate trading) is comparable to investing in rental properties, with the exception that little to no leasing out is required. Properties are typically bought, improved (or not), and then sold for a profit, typically within a short period of time. House flipping is a term used to describe the process of buying and selling homes. Real estate transactions that aim to make a profit typically involve in-depth market knowledge and proficiency.
Rosana Tejada – Tax Adviser
Investing in Málaga
Malaga has established itself as one of the top Spanish towns to invest in because of its unrivalled economic progress. The Costa del Sol region’s capital is a hotbed for property investment, according to the worldwide press.
As a result, both domestic and international capital have increased, improving Malaga’s positioning and appeal.
This region has experienced significant growth; therefore, investing in property in the Malaga market pays off within the first year since the high season is all year round and not just during the summer months.
The Malaga airport maintains connections with about 60 different nations. This region of Spain boasts a sophisticated infrastructure that enables transit to every city in Europe.
If you are thinking of letting the property you buy, the average return on investment on property in Spain is 7.5%. Malaga has one of the best return on investment with 8%.
Investing in Marbella
Marbella used to be a fishing town many decades ago, left that behind to become of the most popular cities in the Costa del Sol. 27 kms of beaches with Sierra Blanca as the background of all selfies taken. The Golden Mile of Marbella is where everything happens, full of bars and pubs that lead to Puerto Banús where there is the highest concentration of luxury yachts, Rolls Royce, and sports cars in the world.
The price of property in Marbella is 3786 euros per square meter and you can rent property here at 14.8 euros per square meter. The highest price to buy but also the highest to rent in Costa del Sol. If you want to calculate the return of investment of the property you buy, divide the annual return by your expenses, as explained earlier.
This town has just over 145K people in the census, 75% Spanish, 5% Moroccans, 2.8% British, 2% Colombians, 2% Argentians and 1.2% Ucranians.
Investing in Mijas
Mijas is divided into two parts, the old town in the middle of the Sierra de Mijas and the part situated on the coastline. The old town is the typical whitewashed streets with Moorish houses and buildings that are testimony of the rich past it shares with the 17th century. Very different from its counterpart on the coastline, a well-known tourist attraction with bars, venues and 12kms of sandy beach.
The price of property in Mijas is 2313 euros per square meter and you can rent property here at 9.7 euros per square meter. If you want to calculate the return of investment of the property you buy, divide the annual return by your expenses.
This town has just over 85K people in the census, vast majority Spanish, 10% British, 2.8% Moroccans, 1.5% Italians and 1% Swedish, Germans, Russians, and Ukrainians.
Investing in Fuengirola
Fuengirola is the most developed coastal resort in the Costa del Sol, specially for families. 7kms of sandy beaches, a zoo, waterpark, mini amusements and a very, very long and beautiful promenade that leads to Sohail Castle. This Castle has witness Almoravids, Christian and Nasrid kingdom wars since the Caliphate era, when it was first build. Today is home for Festivals, like the Beer Festival and the Medieval Festival.
The price of property in Fuengirola is 2743 euros per square meter and you can rent property here at 11.1 euros per square meter. If you want to calculate the return of investment of the property you buy, divide the annual return by your expenses.
This town has just over 80K people in the census, vast majority Spanish, 6.67% British, 5.6% Finnish, 3.3% Moroccans, 2.3% Swiss and 1.8% Italian.
Investing in Nerja
Nerja is situated in between Málaga city and Granada with Sierra Almijara in the background. Beautiful 16kms of beaches, this town has preserved the old seaside look and has resist the over development of high apartment blocks. The main promenade, El Balcón de Europa, was once a Moorish Castle, now a spectacular panoramic view of the Mediterranean. 4 kms from Nerja center is the Caves of Nerja, it holds a 32 meters high column, the widest column of the world, definitively worth seeing.
The price of property in Nerja is 3069 euros per square meter and you can rent property here at 9.7 euros per square meter. If you want to calculate the return of investment of the property you buy, divide the annual return by your expenses, as explained earlier.
This town has just over 21K people in the census, vast majority Spanish, 7.8% British, 2% Moroccans, 3.2% Swedish 3.2% Argentians and 1% Germans.
Investing in La Herradura
La Herrradura is a stunning bay that forms part of the region of Granada. With 2kms of sandy beach, water sports are very popular here due to its breath-taking scenery under water. The town nearby is Almuñecar, with whitewashed houses on a slope and plenty of amenities, bar and shops.
The price of property in La Herradura is 2.257 euros per square meter and you can rent property here at 9.1 euros per square meter. If you want to calculate the return of investment of the property you buy, divide the annual return by your expenses, as explained earlier.
This town has just over 30K people in the census, vast majority Spanish, 3% British, 1.8% Moroccans, 1.7% Argentians and 1.1% Belgiums.
Decide on the best place to buy property in Spain is not easy, If your choice of buying a home, is on the Costa del Sol, Andalusia, like Granada or Almeria province, the team at Tejada Solicitors Law Firm, made up of lawyers, architects and tax advisors, will offer you specialized advice on Property Conveyancing, Non-Lucrative Visa, Golden Visa or Nomad Visa and your tax implications either as a resident or as a non-resident in Spain. We work so that our clients receive 360º advice.