Keys to investing in second homes.
Last year, the prices of rents rose by around 10%.
Spaniards are leaders in Europe in the ownership of second homes: 14.3% of households own at least one, twice as many as in France or Italy. The figure is around 4 million properties, according to the latest housing census data. This trend began in the 1970s and 1980s and can be explained by the rise in income levels, the exodus from the countryside to the city (converting the village house into a second home) and the arrival of foreign buyers, who accounted for 18% of sales and purchases last year.
On the Mediterranean coast, a fifth of these properties are bought by foreigners, according to data from Tinsa (Tasaciones Inmobiliarias). However, it is the people of Madrid and Barcelona who account for a third of second homes in Spain (22% for those from Madrid and 12% for those from Barcelona), which are widely dispersed throughout the country.
From (Tinsa) they talk about increases average second home prices in Spain last year of between 5% and 10%, "with a significant number of areas with increments above 10%, and even reaching or exceeding 20% in some cases.", they indicate in a study. A purchase that in addition to being a source of enjoyment also becomes an investment that can be key at the time of retirement of the owner to supplement their income. According to data from Caixabank, in 2019 the The average age of second home purchase is 47.6 years.
With regard to renting, and leaving aside the differences inherent to the different coasts, a report by Tecnocasa on the prices of the weekly rental in the main areas of the Spanish coastline, it states that renting a flat on Spanish beaches became more expensive 9.7% last summer. Thus, the average cost of renting in summer 2022 was, on average, more than 1,000 euros per week, 90 euros more than in 2021.
Confinement due to the Covid-19 pandemic, the desire to travel and the accumulated savings of families boosted prices, but by 2023 some things are changing. Perhaps the most obvious is the rising cost of financing with rising mortgage rates, which is likely to put the brakes on buying a beach house in the first place.
However, these second homes are increasingly being rented out. 30% of second home owners rent, according to data provided by Fotocasa, and on more than a few occasions they only use them seasonally and then rent them out. This mixed-use character and the seasonality centred on the summer months makes it difficult to establish a profitability comparable to traditional rentals.
The Mediterranean coast has the highest number of second homes, with Alicante, Valencia and Malaga in the top positions. Marbella, Torrevieja and Altea have had the most notable price increases, above 16%. These are undoubtedly data that require a very conscientious analysis when making a purchase in coastal areas, whether for enjoyment or as a property investment.
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