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The best city to buy property in 2018 – probably Valencia

Most international property investors choose from two strategies: buy real estate at a low price to sell in 1 to 2 years, or invest in a steadily growing market and receive rental income for 5 to 15 years.

The strategy one chooses determines the market  to find out the best places to buy property in 2018.
When investing in property for resale purposes, there is a simple rule – buy as cheaply as possible and sell at a higher price. Markets that are in the recovery phase are perfect for this strategy as they have already hit the bottom and are beginning to grow.
Property in Spain, especially cities like Valencia, where  residential property prices are 40% lower than its peak in 2007, have great potential for growth. The recent referendum in Catalonia has affected investor activity in Valencia.  Investors who were previously interested in property in Barcelona have turned to Valencia. Property in Barcelona is on average 2.5 times more expensive than Valencia, and prices are currently close to pre-crisis levels.

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Valencia, Spain, is getting on…..- What kind of property do you wish to buy…?

In Spain, valuations are up by 4.5 per cent over the year to the end of December 2017. Overall, city prices rose 7.5 per cent whilst the Mediterranean coast saw prices up by 5.7 per cent, with the Balearic and Canary Islands up by 3.8 per cent. In essence, property prices fell in Spain – and fell and fell – between 2008 and 2014 and then bottomed out across 2015 and 2016 and grew, across the country on average, from 2017.

 

A recent S&P report suggests prices will rise by 3.5 per cent in 2018, by 3.0 per cent in 2019 and 3.0 per cent in 2020. ‘Economic growth should remain strong this year and next but political uncertainties could have a more negative impact on business and consumer sentiment.’

 

‘The main risk is the impact of the Catalan crisis in the region, Spain’s largest regional economic hub, 300 km North of Valencia, and on the country as whole. but recent evidence suggests that 2018 could see Catalonia’s housing market experience a downturn.’ – Valencia, therefore, is a good optional option.

 

‘By contrast, we expect transactions in the country as a whole to grow about eight per cent in 2018. Second-hand house prices will continue to rise, albeit less rapidly than in the past two years, especially since real disposable income growth slows markedly on the back of flat nominal wages.’ Are you buying in Spain? We can offer to you the best price-range property in Valencia.

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Valencia region: now has the lowest local taxes in Spain

According recent report from the NTO, National Tax Office, Taxpayers in the Valencia region pay less than the national average for IBI (Property Tax) and the rubbish tax.
The average amount of tax paid to local councils comes to about € 585 a year. This would include: IBI, Plus Valia (Property Value Tax) plus Economic Activity Tax and vehicles. Inland towns are even cheaper, as the average of the rest of Spain stands at about € 625 a year.More expensive are Madrid (€760) and Barcelona (€740). – Back to Valencia, on average, people pay here € 325 in IBI, € 135 in Rubbish Tax and € 50 in vehicle Tax pending on size of car.

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2018: Spanish mortgages go down as Euribor ends 2017 on historic low….

MORTGAGES in Spain have gone down again as the Eurozone interest rate, the Euribor, has ended its second consecutive year in negative figures.

And analysts predict it will continue to fall in 2018, or remain the same.

Having reached levels of over 4.7% in September 2007 and soaring to its highest-ever rate of 5.5% in October 2008, the Euribor has been falling consistently since 2009 and ended 2017 at -0.19%, dropping from -0.189% the previous month.

The difference between monthly mortgage payments in Spain during the Euribor’s peak nearly a decade ago, and its ongoing minus figures in the last two years, means a saving of around 40% between the two extremes.

And variable-rate mortgages which are due for review in the early part of this year are expected to be a few euros cheaper.

Based upon the typical mortgage in Spain – a loan of €120,000 over 20 years on a Euribor+1% scheme – homeowners will save €5.84 a month, or €70.08 a year.

Over 80% of mortgages in Spain are on a variable rate since, with the exception of the housing market ‘boom’ years of 2007 and 2008, these generally work out cheaper and, as they are only reviewed once a year, homeowners have plenty of time to act and convert to a fixed rate if it looks likely that interest will rise sharply.

But December 2017 was the 23rd consecutive month that the Euribor has been in negative figures.

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Spanish property market continues to thrive …..(already Google reported)

Demand for Spanish property continues to increase, the latest market analysis  has been revealed.

The number of one particular sales rose by more than half across all its regions in the first three quarters of 2017, with Madrid driving this growth. Sales grew by 70% in the Spanish capital, while Barcelona saw growth of 38% despite the recent issues with the Catalan government.

Valencia and Sitges also witnessed substantial growth, with sales rising by over 100% in the first nine months of this year compared to the same period in 2016.

The research, which strongly suggests that Spain’s prime market has bounced back in 2017, also revealed that 65% of buyers were foreign, with British and French buyers both accounting for 18% of sales each. There has also been a continued upward shift in sales to US and Canadian investors, with these two demographics now representing 8% of all Lucas Fox sales.

Broken down, 31% of buyers bought property as a second home, 30% purchased as an investment and 26% were seeking a primary residence.

Foreign demand for Spanish property is also on the rise, according to recent figures from the Association of Spanish Registrars. It rose by 11.6% in the third quarter of 2017 and now accounts for 12.9% of the Spanish housing market as a whole.

Promisingly, it seems as if the knock-on effect of the divisive Catalan referendum has so far had little bearing on the region’s property market. There was a rise in sales of 27% registered  in Barcelona in October 2017 compared to the same month last year, while levels of interest in Madrid and Valencia also increased significantly, up by 13% and 15% respectively.

In Catalonia, following the events of 1st October we saw a temporary dip in the level of enquiries from national and international buyers but these have already recovered to 2016 levels.”

Furthermore, the average price of a prime property in Spain was revealed to have risen substantially – up from €709,111 in September 2016 to €802,000 in September 2017, a leap of 13% year on year.

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Valencia City on the up….

It was said, that House-prices in Spain are forecast to rise in 2018 as long as there are no sudden economic surprises or changes to the mortgage market.  Expected sales to rise 9.3% next year to 526,000 units, up from 481,000 this year and 21% more than in 2016. It is also forecasting that prices will have risen by 6.9% by the end of 2017 and looking ahead to 2018 are set to rise by slightly less at 6.1%. Even with this rise they will still be 27% below the peak of the market in 2007…

‘Valencia City is well placed to benefit from the crisis in Catalonia, where political turmoil is turning foreign investors off Barcelona, at least for the time being. Like Barcelona, Valencia is a stylish, safe city with a good climate, great quality of life, lots of culture, and long white beaches, yet house prices are significantly lower than Barcelona. Catalan banks and some companies are moving their registered offices to Valencia, and jobs will follow. It’s time to pay closer attention to Valencia City’, if you are a Buyer…

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Valencia update

 

 

Property prices in Spain have bottomed out and that, as the economy improves, so too will the property market and prices. ‘A general feelgood factor, improving wages and more jobs has triggered more demand for homes and mortgages’.

‘In 2017, two key trends merit the attention of second home buyers. Firstly, the diversification of demand. British buyers, down 28 per cent in the year to the end of the fourth quarter of 2016 are being replaced by Dutch purchasers, up 58 per cent during the same period, along with Belgian, Scandinavian, Latin American and Turkish buyers.’

‘Secondly, Spain is witnessing the rise of the urban resort.  Valencia  is undergoing a renaissance as buyers seek to combine a vibrant city centre and all it offers in terms of culture, cuisine and retail with the benefits of a beachfront and marina.’

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Valencia, Costa Blanca has become very popular….

The Costa Blanca has become popular with Brits due to its location which enjoys good train and airport connections. The location has a thriving tourism industry and there is a large community of expats living there.

The ever-thriving tourism sector in Spain is good reason to invest in property in the country. There are plenty of benefits from investing in Spanish real estate, including buy-to-let opportunities created by tourist demand. In addition, Spain offers the possibility of solid capital growth, as the country’s housing market starts to recover following the crisis a few years ago.

According to official figures, Spanish property sales surged 14% in 2016, with purchases by foreign buyers up 16%. Demand has remained strong in 2017. According to Spanish Property Registrars,  the Community of Valencia saw the fourth highest number of mortgage approvals in January 2017 pushing the national total of approved mortgages up 16.9% year-on-year.

The price for property in Spain is currently fairly low as are interest rates. Both of these combined are helping to fuel demand which has resulted in a 1.8% increase in house prices in the Valencian Community in the first quarter of 2017. New homes have seen values rise 3.1% in the year to date and resale property have enjoyed rises of 1.9% in the same period.

Buy-to-let investors are seeing returns of more than 6.3% in 2017, up from 5.5% last year.

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Buy – to – Let Landlords in Spain

The Buy – to – Let market is booming in Spain with as many as one in three homes in the country’s main cities now owned by Buy – to – Let landlords.

The housing markets in big Spanish cities like Valencia are now dominated by Buy – To – Let investors, many of which have capitalised on the housing crash that wiped up to 75% off the value of homes in Spain following the global credit crisis in….. 2008 (9 years ago !)

But Despite improving market conditions, Spanish property prices remain significantly below pre-crash levels, with the average price of a home in the country still around 40% below the previous market high in 2007.

However, the markets have recovered well in the main cities like  Valencia thanks to strong demand, fuelled largely by Buy – to – Let investors looking to take advantage of high tenant demand.

Based on property sales one of the most popular city among buy-to-let investors, with 37% of sales made to landlords, is Valencia.

“Given that Spanish property prices now look like they are on a recovery path, it’s not surprising that local investors are focusing on Buy – to – Let in the main cities, even if yields are nothing special.” 

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British expatriates – Countdown to Brexit

What steps can British expatriates take to secure their future when it comes to residency, pensions, savings and investments during the countdown to Brexit?

Now that Article 50 has triggered Britain’s official divorce from the EU, will we soon know more about what Brexit means for expatriates in Spain? Not quite. The only thing we really know is that the UK is on track to leave the EU on 29 March 2019, whether agreeable deals have been reached or not.

While we have to wait and see how negotiations unfold, here are four key steps you can take to future-proof your financial situation now.

  1. Consider securing your residency

There are under two years left for current residency and freedom of movement rules. While we can expect a fresh reciprocal agreement between Spain and the UK to protect expatriates in each country, the new rules may be less favourable than today. So if you are still a UK resident but want to live permanently in Spain, now is the time to take steps to secure your position.

Once resident here, you secure the same tax treatment as other Spanish residents. Non-residents, however, may face higher taxes after Brexit. When it comes to non-residents’ income tax, for example, Spain charges more for non-EU and non-EEA residents. Also, non-EU or EEA residents may not qualify for the generally lower rates offered by the regional autonomous communities for wealth, succession and gift taxes. Regardless of residency, UK-source income remains taxable according to the UK/Spain double tax treaty, which is unrelated to the EU and therefore unaffected by Brexit.

  1. Review your pensions

Based on current law, Brexit should not affect how you can access or transfer UK pension funds. However, the UK’s new ‘overseas transfer charge’ indicates things may change post-Brexit.

Until recently, all UK pensions transferred to a Qualifying Recognised Overseas Pension Scheme (QROPS) were free of UK taxation so long as the combined value of pension savings came under the lifetime allowance limit (currently £1 million). Since 9th March, however, you face a 25% tax on pension funds transferred to a QROPS based outside the European Economic Area (EEA), unless you live in the same jurisdiction. While liability lingers for five tax years after the transfer date, you will not be affected if you transferred before 9th March 2017.

Currently, the new overseas transfer charge will not apply to expatriates in Spain moving pensions to a QROPS based here or in another EEA state, such as Gibraltar. But there has been speculation that the UK government may use Brexit as an opportunity to recoup revenue from UK nationals abroad with widespread penalties on overseas transfers. They may also change the rules to make it harder to take advantage of today’s high transfer values for ‘defined benefit’ (final salary) pensions. So consider acting now, under current rules, before the tax-free window of opportunity closes.

However, it is crucial to carefully explore your options and use a regulated provider to avoid pension scams and establish the right solution for you.

  1. Diversify, diversify, diversify

When it comes to investing, many expatriates favour British assets, like UK bonds or FTSE shares. Not only could this approach overlook opportunities available in Spain and elsewhere, it can generate overexposure to UK assets. While markets have proved quite resilient to Brexit news so far, we cannot predict how the UK economy will continue to react. In uncertain times like this it is more important than ever to have a well-diversified portfolio.

You should minimise risk by spreading investments across countries, currencies, regions, asset types and market sectors. By limiting your exposure in any one area, you are better placed to ride out market turbulence – Brexit-related or otherwise.

  1.  Look for currency flexibility

With the fortunes of the pound and euro so tied up with Brexit developments, it is a good idea to reconsider the best currency mix for you. Living in Spain, ideally you should receive some income in euros to limit your dependency on exchange rates. One solution is to use structures that allow you to hold investments in multiple currencies. You could, for example, invest in sterling now and switch to euros when rates are favourable, with flexibility to choose the currency of your withdrawals.

In any case, you should regularly review your affairs to ensure your assets and investments remain suitably diversified and tax-efficient for your unique situation. Not only can your circumstances change over time, uncertain times like this can also unlock opportunities.

The ticking of the Brexit clock offers one more compelling reason to fine-tune your financial planning. As an expatriate it is essential to understand the cross-border implications and be fully prepared so you can continue enjoying your life in Spain, whatever Brexit brings.

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Valencia Costa: Golden Visa brings in Chinese and Russian Millionaires

Valencia Costa and Spain in General has been offering foreign buyers of luxury homes the opportunity to obtain residency and permission to work here, for themselves and their families.

To qualify under the property investment law for a “Golden Visa, the purchased property has to cost more than Euros 500.000. The Estate Agency, responsible for the sale, will also take care of all the necessary paperwork to legalise the purchaser’s stay in Spain.

Since the law allowing this property investment opportunity came into effect at the end of 2013, a total of 151 millionaires have established residency in the Alicante – Valencia province, the majority being Russians who prefer to purchase properties here, while the Chinese prefer to purchase up the coast closer to Valencia, the main port and main City.

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2017 – Spain’s “golden visa” scheme brings in €2.16 billion in first three years

Government has handed out 27,301 residency permits in program designed to attract wealthy foreigners

In 2013, the Spanish government introduced  Legislationoffering residency permits to large investors and highly qualified professionals. Three years on, 2,236 investors have benefited from the proposal, bringing in €2.16 billion, of which 72% has gone into Property. The total number of people granted residency in Spain under the so-called Entrepreneur’s Law is now 27,301, including family members.

Chinese and Russian millionaires make up 59.4% of total investment pumped into Spain through the scheme; 714 Chinese nationals  have been granted a golden visa since September 2013 after investing €716 million in property, financial assets and business projects. Close behind come Russians, with 685 visas. This group has invested €567 million.

Issuing so-called golden visas has become widespread throughout the European Union over the last two decades, notably in Portugal, Ireland, the United Kingdom, France, and Germany.

Some 12,891 foreigners have been issued with residency permits under Spain’s Entrepreneur’s Law, and they have brought a further 14,410 family members to live in Spain. Of this total, 5,315 permits have been issued to highly qualified professionals. Among them are 665 Venezuelans, 530 Chinese, and 453 US citizens. More than 3,500 executives posted to Spain by multinational companies have also been granted residency. Finally, 1,483 visas have been issued to foreigners involved in research or training in Spain, led by Colombians, Indians, Chinese, Mexicans and Iranians.

During the first year of the scheme, only 500 or so investors applied, providing around €700 million. Given the limited uptake, in 2015, the government eased the conditions, allowing spouses, children and elderly relatives to be included on visas, as well as extending the period of residency from two to five years.

The latest figures show that the number of investors has risen fourfold since 2014, with the amount they have invested increasing three times in the same period.

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About Us

Villas Valencia offers properties in Valencia at Spanish prices. What`s more, we don`t charge the buyer (as most other agencies do). We are an English locally run estate agent company dealing with properties in a picturesque area around the city of Valencia.

Testimonials

You are the only agent we dealt with your knowledge of the area and the buying process left us at ease that everything would be taken care of. - Mr & Mrs P, in Naquera

Your advice was clear and brilliant. You completely understood our requirements and objectives, facilitating our new purchase. Thank You! - Mr L, Now living in Lliria

You offered a great service from start to finish, clearly explaining all our options and helping speed everything through. You translated everything we needed quickly.

- Mr T, Second home in Montroy

Villas Valencia was fantastic and exceeded my expectations. I will and have recommended you to others. Thank you for all your referrals for building work. We love our new pool! - Sean, house in Rocafort

Thank you for all the help buying our property in Valencia. With so much to think about, you explained everything well and made it all very easy. Cant wait to move out there fully and enjoy a G & T on our balcony with you.

- Ben, house in Naquera

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