The coronavirus pandemic, which affected Spain more than other EU countries, could not but affect the local real estate market. However, as numerous studies show, interest in housing in Spain did not fall even during the so-called “quarantine”, when the country’s borders remained locked and movement between autonomous communities was prohibited. In addition, during this period, many owners of residential real estate, including luxury ones, who had previously put it up for sale, made a significant reduction in prices, which in some regions (primarily in Barcelona and Madrid) dropped by 20-25%.
The greatest increase in demand for Spanish property took place on the Costa Blanca and Costa del Sol, which are traditionally preferred by foreign investors. They account for the majority of purchase and sale transactions, and when it comes to luxury housing (for example, on the Costa del Sol, the average cost of 1 sq.m. in this segment exceeds 7,000 euros), this figure reaches 90%. Mostly, citizens of Great Britain, France, Germany, Belgium, Italy, Switzerland, Russia and Scandinavian countries buy housing here.
In addition to the favorable climate, foreigners are attracted here by low food prices, developed infrastructure, convenient transport links and a large selection of entertainment. In particular, all of the most famous theme parks in Spain are located in the province of Alicante, a number of settlements of which (Torrevieja, Benidorm, Calpe, Denia) have long become places of concentration of foreign diasporas.
In general, Andalusia and the Valencian Community are among the regions where the coronavirus pandemic has not spread widely. This circumstance did not escape the attention of foreigners who had previously intended to buy property in Spain, and with the opening of airports in Alicante and Malaga, many of them decided to implement their plans. There is an increase in demand for detached houses with their own plots of land, since, as in almost the whole world, there is still a possibility of reintroduction of quarantine measures, which are much more difficult to endure in a limited space.
As of June 2020, the cost of 1 sq.m. such real estate in the urbanizations of Marbella, which are very popular among Russians, varied between 4200-5800 euros. Some investors have taken a wait-and-see approach, hoping that real estate in the price range from 500 thousand to 2.5 million euros will fall in price by 30%, but this is unlikely to happen except in certain cases when home owners need to sell it in a very short time .
Thus, on the Costa Brava, where the main tourist flow from abroad goes, prices fell by a maximum of 20%, and this phenomenon bypassed such areas and suburbs of Barcelona as Pedralbes, Eixample, Turó Park-Sarrià, Esplugues, Castelldefels and Gavà . Barcelona continues to be the “European Silicon Valley”, so foreigners who plan to open their own “start-ups” prefer to move here. The successful resolution of the Catalan conflict and the normalization of the socio-political situation in general gave them confidence, as well as representatives of business circles who were planning to move to Catalonia.
During the quarantine, there was an increased interest in the Golden Visa program, which allows you to obtain a residence permit in Spain for investments in real estate worth over 500 thousand euros. According to one of the leading Spanish publications, El País, a record number of such visas were issued in 2019 – 658, and Russians took second place in the list of foreign investors.