Should you invest in Spanish properties in 2024 and beyond?

Intro

Few investment ideas are going to offer you a ROI as high as real estate – that’s a fact. Not only can you earn from the rise in per-metre square prices, but also through renting the property out. 

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And some areas in Europe, like Spain’s Southern Mediterranean Coast, are particularly attractive if you want to make a profit from short-term rentals. 

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One could say that you can find cheaper locations in Southern Europe. Yet, properties in Andalucia are in demand among tourists all year round, so you could see ROI much sooner.

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Real estate investment in Spain – market overview

Why should you consider an investment property in Spain? 

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First of all, it’s a stable market with a fragile state index of 44. It has remained at this level since 2021, with a slight drop in 2023. 

The government has introduced a series of reforms, which have further stabilised the economy, and made it an even more attractive destination for foreign investors. In the next 5 years, it’s projected to grow by 8.4%, translating to an average GDP growth rate of 1.7%. 

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The growth is moderate, which is good news. How so?

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It means that the market is not overheated and still has some potential for property price increase. Also, it shows that the market is stable, and not subject to constant changes, which guarantees more security to investors. 

Why it’s best to invest in properties in Andalucia

Here are the main reasons why apartments for sale in Spain, and especially in Andalucia

not only make for a great real estate investment, are also one of the best options for buying property abroad. 

Easy to get tourist licences

In summer 2024, some regions in Spain, particularly along the northern Mediterranean coast, saw public protests. Residents demonstrated against a very slim number of available residential properties, as many apartments and villas were purchased by investors for short-term, summer rental purposes. Some cities have gone all-in, including Barcelona, whose mayor decided to stop granting new tourist licences and ban all short-term rentals from the city by 2028.

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This is not the case for properties in Andalucia, which is currently seeing a spike in new developments and has one of the most investor-friendly procedures in the country.

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With places like Costa Brava focusing on housing for locals over tourism, visitor numbers in these areas will likely drop, which could shift more tourists to destinations like Costa del Sol. This paints a positive picture in terms of potential ROI on your investment property. 

Property prices are growing steadily 

According to Ministerio de Formento, property prices in Spain have grown by 14.2% in the last 5 years. This is great news for investors. Those who bought a house or a flat in Marbella for €500,000, could now sell it for €571,000 – this makes for a pretty nice profit, doesn’t it? Properties in Andalucia account for 20% of total property sales, out of which around 20% are bought by foreigners. 

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If we look at the graph below, we could see a sharp price increase between 2023 and 2024. In October 2024, the price per square metre was €2,398, which is nearly a 24% rise from the same month the year before. December 2022 was the month with the lowest asking price of 

€1,830 per square metre. 

There is a large price disparity depending on the province, with Malaga being the most expensive and Jaen being the cheapest. 

A lot of new properties to select from

The fact that you can choose from so many new developments is a luxury other areas in Spain can’t offer (take it from a local realtor). Purchasing a new property offers much more security than resale villas and apartments. Here, you don’t have to worry about the costs of restoration or any unpleasant surprises like mould hidden deep in the walls.

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Also, the minute you get the keys to your new place in Spain, it’s almost ready for you to rent out or move into. It will already have floors, doors installed, and even a bathroom and kitchen with all the appliances there. All you need is to purchase furniture and you’re good to go.

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Finally, it’s common for new neighbourhoods to offer 24/7 monitoring, which lowers the chance of unwarranted access.

Low risk of squatters

Squatters (known as okupas) were never a major issue in Costa del Sol – largely due to its year-round tourist activity and the high number of permanent residents in the area. The properties that do get illegal inhabitants are mostly abandoned, old homes outside of towns or apartments taken over by banks. 

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Even the small numbers of squatters in Andalucia have subsequently reduced in recent years, making them an even more marginal issue. I dive deeper into this subject and explain why investors don’t need to worry about okupas in a piece on squatters in Spain.

Rental prices are increasing 

If you’re considering buying an investment property in Spain somewhere on the coast, then it’s worth knowing that Marbella, famous for its lush beaches and luxurious properties, has experienced an impressive rental ROI. Although property prices in Marbella tend to be higher, the average rental yield was around 4% in 2018, rose to 4.5% in 2020, and reached 5% by 2022. Even the pandemic didn’t have a negative impact on the rental returns.

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As a year-round tourist hotspot, Marbella offers strong potential for short-term rentals when you're not there. Additionally, the growing number of expats and remote workers relocating to the area provides opportunities for long-term rentals, allowing you to generate substantial income either way.

It offers a lot of variety, making it a top tourist destination

Andalucia is a true haven for both mountain lovers and beach enthusiasts, which you can visit all year round. Many foreigners might not realise that only a small part of Spain’s Mediterranean mainland coast faces south – and all of it is, yes, you’ve guessed it, in Andalucia. This means the climate is mild throughout the year – with the mildest winters in entire mainland Europe. 

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Whether you’re a kite surfer or a skier – Andalucia is a great destination. The Atlantic coast offers the best wind and kite surfing conditions in the world for the whole year. And if you go to Sierra Nevada, which is only a short drive from the coast, you’ll reach one of the sunniest ski resorts with slopes reaching up to 3,300m above sea level.

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What does this mean to you as an investor? That Andalucia is really the best place to buy property abroad as it’s so attractive to tourists. High chances are you’ll be able to rent it out without any problems as every season is peak season in Andalucia. 

Lower taxes for buyers

If you’re still reluctant if Andalucia is truly supportive of real estate investors, then this point will eliminate any trait of doubt.

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While some taxes in Spain are put in place on a national level, local municipalities can often decide to decrease or refrain from them entirely – and that’s the case of Andalucia.

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Back in 2022, the region authorities decided to scrap the wealth tax called ‘el impuesto de patrimonio’, from anyone purchasing real estate here. Previously, it applied to everyone buying properties exceeding a net worth of €700,000 or over.

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Also, where possible, Andalucia keeps taxes for buyers at the lower end – for example, they lowered the stamp duty cost from 1.5% to 1.2% of the property value. If you quench the numbers and put together all these tax exemptions and reductions, you can see how much more you'll save buying here than in other areas of the country.

To give you a sense of why you should make your real investment in Spain here, let me just cite Euronews, who said: “among Spain’s 17 regions, Andalucia now has the second lowest tax requirements after Madrid.”

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If you want to run a simulation and see how much it would cost you to buy a place here, check out our detailed guide that includes the latest 2024 figures. The article, reviewed by our legal advisor, offers a complete breakdown of expenses to help you plan your investment.

Best place to buy property abroad – Spain at the top of the list

For years, Spain has been a favourite destination not only for Poles, but also many other foreigners. No wonder, since it offers great weather, nice food, and friendly people. It’s also a safe country with a stable economy, so if you’re considering buying real estate here, reach out.

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At Hometailor, we have access to thousands of properties – both new and resale. We can advise you on the best investment opportunities given your price range, whether you’ll treat it as your second home or rental, and preferred locations.

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Speak Polish, English, or Swedish? So do we – reach out and let’s discuss your investment options.