How does the crisis affect the real estate market in Spain?

Andrey Karachun: real estate expert

Andrey Karachun is the leading partner of Decart Property Investments and an expert in the real estate sector. In one of his interviews, he emphasizes the critically important aspects of the unstable situation that investors and homebuyers are facing in today's market. Over the past twelve months, global events, especially in the real estate sector, have undergone significant transformations, unfortunately not for the better.

In the new economic reality, it is no longer sellers and buyers who determine their future, but political decisions, especially those regarding the imposition of new sanctions, that are crucial. It is also important not to forget the influence of European banks, which create additional barriers for transactions in the market.

Optimism at the beginning of 2022

The beginning of 2022 instilled optimism. In Spain, for example, the last three months of the previous year and the start of the new one were marked by record real estate transactions. Investors anticipated the opportunity for significant profits, while those looking to buy property dreamed of moving to countries with a warm climate. However, drastic changes soon followed.

The perfect storm in Europe

Right now in Spain and across Europe, a situation is developing that can be called a perfect storm. Geopolitical events have triggered a sharp increase in energy resource prices, exacerbating the economic problems that arose as a result of the pandemic.

• Reduction of production capacities;
• Increase in the money supply due to the implementation of various subsidies and benefits.

The situation in Spain has also worsened due to conflicts in North Africa, which have restricted oil and gas supplies to Europe. As a result of all these factors, we have witnessed an unprecedented increase in the inflation rate, which has reached 10%. This is a level that has not been seen in Europe for many decades. Central banks have been forced to raise interest rates, which has also affected the mortgage market.

Increase in mortgage rates

Indeed, mortgage rates in Spain have significantly increased. Previously, they ranged from 1.5% to 3%, but now they are between 2.5% and 4%. This has undoubtedly led to a slowdown in the real estate market, as can already be observed today. Spaniards have to get used to new, higher mortgage payments, which are quite different from the almost zero rates a year ago. However, it should be noted that this increase in prices will likely be temporary.

The situation in the residential real estate market

When talking about the residential real estate market in Spain, one can mention, for example, a house in Costa Dorada priced at 399,000 euros. This two-story building has an area of 307 square meters, located in the picturesque area of Cunit, offering magnificent sea views. Even in the current economic climate, such properties will continue to be in demand, highlighting the growing interest of buyers to invest in stable assets despite changing economic conditions.

Investments in stable assets

This approach to real estate investment demonstrates buyers' confidence that property remains a reliable way to preserve and grow capital, even in an unstable economic environment. It also confirms that the Spanish housing market, despite all its challenges, is still capable of attracting the attention of buyers looking for opportunities to enhance their financial well-being.

Amazing view and amenities by the sea

A stunning landscape opens up on the horizon, featuring a view of the sea and surrounding nature, with the beach just 700 meters away. The plot of land is 500 square meters and completely flat, creating excellent conditions for organizing a garden and installing a pool. There is enough space in the garage for your car, and the house is equipped with a climate control system that ensures comfort all year round.

The living area is 170 square meters, complemented by a 37 square meter terrace and a cozy porch. The price of this offer is —495,000 eurosfor a townhouse located on the Costa Dorada in Spain. The total area of this property reaches 300 square meters, including 4 bedrooms, 4 bathrooms, and a spacious living room that opens onto a terrace. This residential complex of townhouses is currently under construction near the city of Salou.

Distance from major cities

If we talk about distances, then tothe center of Barcelonaa total of 110 km, toTarragons— only 12 km away, and the sea is about 1 km. Each townhouse in this residential group is designed according to modern architectural trends and needs, which helps create comfortable living conditions.

Proposals for the Costa del Sol

You can buy an apartment on the Costa del Sol for880,000 euroswith a total area of 300 square meters. The complex offers all the amenities for comfortable living, including:

• several outdoor pools
• spa with an indoor heated pool
• Turkish bath
• sauna
• gym

The apartment includes 3 spacious bedrooms, each with its own bathroom, as well as a fully equipped kitchen. One of the bathrooms features a jacuzzi, adding a touch of comfort and luxury.

Costa Blanca: compact apartments

On the Costa Blanca, there is an offer for182,000 euros— an apartment with an area of 72 square meters in the Balcones Los area. An offer is also available for160,000 eurosfor an apartment in the same region with an area of 62 square meters. This penthouse located in Las Filipinas on Orihuela Costa offers:

• a salon with an open kitchen
• 2 bedrooms
• 1 bathroom
• 2 terraces

The total area of this apartment is 62 square meters.

Amenities in the residential complex

The residential complex offers a variety of amenities, including:

• underground parking
• well-maintained green spaces
• common pool with a jacuzzi
• a petanque playing area
• children's playground

Las Filipinas is located near the Campoamor golf courses and other entertainment facilities.

Villas in Ciudad Quesada

A villa is for sale in Ciudad Quesada for563,926 eurosThe area of which is 130 square meters. This villa in classic design includes:

• 3 bedrooms
• 2 bathrooms
• cozy living room
• cafeteria
• spacious terraces

All rooms are equipped with high-quality window frames with double glazing and thermal insulation. There is already a ready-made system for connecting an air conditioner, and there are points for connecting televisions and phones in the bedrooms and living room.

Suggestions near Alicante

In close proximity toAlicantethe villa costs399,900 eurosand covers 116 square meters. This new offer includes recently built villas located near the prestigious urbanization in Los Montesinos, on the Costa Blanca. The new residential complex offers:

• spacious well-maintained areas
• modern houses
• private pools

The villas have a south-facing facade, allowing for sunlight enjoyment throughout the day, while large windows create an atmosphere of openness and lightness, making it perfect for living in this beautiful region.

You have an outstanding opportunity to become the owner of stylish apartments in Finestrat, Spain, priced at €325,000 with a total area of 66 square meters. These cozy living spaces include 3 bedrooms and 2 bathrooms, and also offer the option for remote viewing and online trading. The mortgage conditions are quite attractive – only from 3 to 4%. This is an excellent solution for those looking to invest their funds in real estate in a rapidly developing region near Benidorm. This deal provides a chance not only to preserve but also to increase capital by purchasing a home in a modern residential complex built by a reputable developer with high demand for their projects. The complex is located in a picturesque area and offers excellent living conditions.

Apartments in Guardamar del Segura

There are also new apartments for sale in Guardamar del Segura for €259,900. The area of these apartments is 106 square meters, including 4 bedrooms and 3 bathrooms. When purchasing, there is an option to obtain a residence permit, as well as a possibility for remote viewing. Mortgage conditions vary from 4% to 6%. These modern apartments are located in a beautiful residential complex that allows you to enjoy the natural beauty. The apartments feature a bright and spacious living room, a modernly equipped kitchen, as well as a terrace of 29 square meters and a porch garden of 42 square meters. The price includes a kitchen with various appliances and built-in wardrobes.

New apartments in El Raso

We present to you new apartments in Guardamar del Segura priced at €243,000 and covering an area of 78 square meters. This complex is currently under construction in the El Raso area, not far from picturesque lagoons and green spaces. The expected completion date is scheduled for December 2022. The apartments are designed in a modern and elegant style, meeting the highest finishing standards. A sample apartment is available for viewing so you can assess the quality of the work.

Luxurious villa in Orihuela Costa

If you are looking for a luxury villa, take a look at the property in Orihuela Costa for €1,300,000. This elegant home is located by the sea and has an area of 400 square meters. The villa includes 6 bedrooms and 5 bathrooms, as well as 8 toilets. With the purchase, you will also have the opportunity to apply for a residence permit and take advantage of remote loan services with rates ranging from 3% to 6%. The spacious living room with a fireplace and the kitchen create a warm atmosphere, and two of the bedrooms have access to a terrace with stunning sea views — the perfect spot for morning coffee or enjoying Spanish wine.

Apartments in Calpe

In addition, take a look at the beautiful apartments in Calpe for €341,000. They have a total area of 73 square meters, including 4 bedrooms and 3 bathrooms. These modern apartments are located in an area with well-developed infrastructure, just a few minutes from the beach. The complex offers a variety of amenities:

• swimming pool
• gym
• sauna
• jacuzzi
• mini-golf
• gastronomic zone
• cinema
• coworking
• children's playground

Each apartment is also equipped with a parking space.

Elite apartments and villas

And finally, complete your selection with elite apartments in Benahavís, available for €1,365,000 and covering a total area of 281 square meters. When purchasing, there is an option to obtain a residence permit and a remote viewing option. Additionally, a new villa is offered in Benissa for €1,075,000, with an area of 476 square meters, including 4 bedrooms, 3 bathrooms, and 4 toilets, also with the possibility of obtaining a residence permit. Each of these properties represents a great investment opportunity.

New luxury villa in Benissa

Recently, a new luxurious villa was built in the picturesque area of Benissa, located in the northern part of the Alicante province. This remarkable house combines modern architectural style with high-quality finishing materials that meet the latest trends.

The extensive grounds of the villa feature a magnificent pool that offers stunning sea views, creating a unique atmosphere of coziness and comfort. The interior includes three comfortable bedrooms and four modern bathrooms, as well as a spacious living room, an aesthetically designed kitchen, and a separate laundry room.

The spacious living room flows seamlessly into the terrace, which leads to the pool — the perfect place to enjoy sunny days and magnificent sunsets.

Apartments in Kunita

If you are looking for apartments in Spain, you should consider the residential complex in Cunit. It offers modern and spacious housing with a terrace that provides direct access to the pool and green areas.

This comfortable property is located on the second line of the beach in the vicinity of Cunit, in the Tarragona area.

• The total living area is 85 square meters, including a 45 square meter open terrace.
• The interior layout includes three bedrooms and two bathrooms.
• Fully equipped kitchen with gas heating and air conditioning.
• All the windows face the street, which provides an abundance of natural light.
• The property comes with one parking space.

Villa in La Zenia

Equally interesting is the villa in La Zenia, located in the popular resort area of Orihuela Costa, just two kilometers from the beach. The area of this house is 115 square meters and includes three bedrooms, two bathrooms, a cozy living room, a stylish separate kitchen, and a laundry room.

On the first floor, there is a terrace, and on the roof, there is a solarium. The 615 square meter plot of land features a swimming pool, a garden, a storage room, and a garage that can accommodate three cars.

The villa is offered with furniture and all necessary appliances, including heating and air conditioning systems.

Luxury apartments in Marbella

For those looking for a new home in Spain, it's worth considering the luxurious apartments in Marbella, located in the Albatross Hill Club residential complex in the Nueva Andalucía area.

The real estate market in Spain and its features

In the real estate sector of Spain, foreign investors play an important role, and among them, retirees from various European countries stand out particularly. These individuals seek to purchase apartments or houses by the coast, combining their desire for a comfortable life with a wonderful climate. Potential buyers also include investors interested in different types of real estate.

The role of Russians in the real estate market

Nevertheless, Russians still occupy a minor niche in this market. Although our compatriots often rank first in the number of visas issued based on investment programs, they cannot compete with British citizens when it comes to real estate purchases. Even during times when it seemed that Russians were actively buying property, the British conducted about ten times more transactions compared to all citizens of the CIS countries, including Russia. Following them are buyers from France and Germany.

Current situation in the market

In the current situation, there are no noticeable changes, and the position of Russians in the real estate market remains quite weak. The main difficulty faced by Russians is the issues arising in their relationships with European banks. Generally, successful purchases are made by those investors who have already obtained residency in Spain through various programs.

• For such clients, interesting opportunities arise in the field of commercial real estate, especially in cities like Barcelona.
• However, transferring new funds from Russia is becoming increasingly difficult, creating additional challenges.

Interest in purchasing real estate

Despite the challenging economic situation, interest in purchasing real estate in Spain has not decreased; on the contrary, it has increased. People continue to search for their ideal properties, although many have limited opportunities to make a deal. From a market analysis perspective, this autumn may not seem like the best time for purchases, but there is no need to panic.

Real estate prices: analysis

Let's take a closer look at the situation with real estate prices. Over the past eight years, the cost per square meter has nearly doubled, indicating that investments in commercial real estate in the past have yielded good returns.

• Such investments certainly bring joy to their owners.
• However, in recent months, there has been some stagnation in the market, which is sometimes reflected in price adjustments of 1-2%.

However, such changes are not yet significant for the commercial real estate sector.

Results of the current situation

What are the results of this situation? The main changes occurring in the market may not exceed the statistical margin of error. This difference is often smaller than the costs incurred when executing transactions, including various fees, taxes, and agency commissions.

All of this indicates that the market remains stable, and changes in its trends may be minor, which allows for maintaining optimism about the future.

At the moment, the market offers a unique opportunity to enter investments. If the market is already starting to show growth, events are unfolding rapidly, making it impossible to keep up with them, which can result in missing out on important opportunities.

Examples of commercial real estate in Spain

Let's consider a few examples of commercial real estate available on the Spanish market. One notable property is a luxury hotel on the Costa del Maresme coast, managed by...2,725,000 eurosThis establishment covers an area of 2,700 square meters and offers 49 comfortable rooms, as well as a restaurant, bar, and kitchen. Among the additional amenities, there is an outdoor terrace and a well-maintained garden measuring 1,300 square meters. This hotel also has the option for long-term rental of services from the neighboring spa, which offers various medical programs.

Business hotel in Barcelona

Another interesting property is a business hotel in the center of Barcelona, which costs27,300,000 eurosThis four-star complex is perfect for organizing business meetings, including conferences and seminars. The hotel features:

• 4 conference rooms
• 4 banquet halls that are happy to host wedding celebrations and other events.

Commercial property in Madrid

It is also worth noting an interesting commercial property in the capital of the country — Madrid, which is valued at18,000,000 eurosThis building, constructed in 1940, is located in the central part of the city, near the Keviedo metro station, and is distinguished by its historic facade. The total area is 2,796 square meters and includes:

• 26 residential apartments
• 4 commercial premises
• 2 office rooms

There is an opportunity to expand to the seventh floor, which opens up new horizons for further business development.

Restaurant in the center of Barcelona

For those interested in the restaurant business, it's worth considering an option in the very center of Barcelona at a cost of3,000,000 eurosThe area of this restaurant is 779 square meters and includes two separate spaces. One of them operates as a restaurant, while the other has been leased for ten years for7,000 euros per monththat can provide a stable income for the owner.

Restaurant on the Costa Blanca

On the Costa Blanca, there is also an opportunity to purchase commercial real estate — a restaurant with an area of 240 square meters, located on the second floor of the Los Dolces complex in the resort area of Orihuela. This establishment is fully equipped for successful business operations:

• Spacious kitchen with all the necessary appliances
• Bar counter
• Utility rooms
• Office with a bathroom

In addition, there is a terrace of 100 square meters nearby, creating a comfortable atmosphere for guests.

New supermarket in Rosas

Don't forget about the new supermarket that will be built in Rosas, Girona province. Its cost will be5,000,000 eurosThe building is being developed on a land plot of 7,500 square meters and will fully comply with modern retail standards. The supermarket will include:

• Trading zone
• Service premises
• Cafeteria for employees

What contributes to creating a comfortable work environment?

Conclusion

Therefore, if you are considering investing in real estate in Spain, now is the perfect time to look for an interesting property. The market offers a variety of attractive options, and it would be extremely unwise to miss out on this opportunity.

Commercial real estate in Barcelona

Commercial real estate in Barcelona, Spain, offers attractive opportunities, including in the prestigious area 261, where a property of 120 m² is available with mortgage rates starting at 2.5%.

The office block, which is in excellent condition, has a facade and windows facing the busy street, creating great advertising opportunities. Inside, there are various functional areas, such as:

• hall
• reception area
• office rooms
• conference hall
• additional storage spaces for documents
• two bathrooms

An interesting suggestion: café-restaurant

Another interesting offer is a café-restaurant in Barcelona priced at €275,000. This commercial space, with an area of 250 m², is already leased and shows impressive profitability indicators.

The establishment is located close to the Plaza de España, as well as in close proximity to a large exhibition center and a four-star hotel. The restaurant has been operating since 2014 and is currently fully equipped, designed in accordance with the concept of the proposed cuisine.

Investing in an aparthotel in Sol de Mallorca

If you are looking for an opportunity to invest in an aparthotel, it is highly recommended to consider the offer in Sol de Mallorca. For the amount of €55,000,000, there is a chance to become the owner of a 4-star aparthotel located on the beachfront.

This is truly a profitable business offer at an attractive price. The complex includes more than 360 comfortable apartments located in an elite part of the island.

The services offered in the complex include:

• restaurants
• spa
• fitness club
• pools

This is especially attractive given the current pricing conditions.

Commercial property on the Costa del Sol

In Costa del Sol, in the picturesque Marbella, you can find a commercial space of 115 m² for €200,000. This office is located on the first line of the sea, where large stained glass windows offer a wonderful panoramic view of the surrounding landscapes.

The office provides all the necessary conditions, including:

• a bathroom with a shower cabin
• air conditioning system with heating function
• two entrances

In addition, the office comes with a terrace or solarium covering an area of 300 m², which is a significant advantage.

Commercial space in Madrid

A commercial property is also for sale in Madrid for €936,000, located at the main entrance of a well-known shopping center. This place is just a few meters from Glorieta de Quevedo and San Bernardo streets in the Chamberí district.

The premises, with a total area of 203 m², already has an existing license for the restaurant business and is equipped with an exhaust system both at street level and in the basement.

Ready-made business in Barcelona

If you are interested in a ready-made business in Barcelona, you should consider a café-restaurant with an area of 1100 m² priced at €4,550,000. The interest rate is 5.2% per year, and there is also the possibility of obtaining a residence permit upon purchase.

The property is located in the city center, near Diagonal Street and surrounded by numerous cafes, shops, and top-notch hotels. This area is home to many tourist attractions, including the famous works of Antoni Gaudí, such as Casa Mila and Casa Batlló. It's a real find, as the property is already leased out as a main office.

Investing in real estate in Spain

Real estate is considered one of the most profitable forms of investment, and the Decart Property Investments project offers a wide range of opportunities for purchasing commercial property in Spain.

Object in Eixample

In the Eixample district of Barcelona, a property measuring 260 square meters is up for sale, priced at890,000 eurosThese investments provide a stable income that reaches4.8%per year. When purchasing this property, the new owner receives a residence permit and the opportunity to take a virtual tour. The financing conditions include low interest rates within2-3%This property has already been rented out to a reliable tenant.

Features of the Eixample district

Eixample is a central residential area known for its history and significant landmarks, including:

• Sagrada Familia Cathedral
• Plaça de Catalunya

In this area, you will find a variety of commercial establishments:

• Supermarkets
• Cafe
• Fashion boutiques

One of the largest shopping centers, Glories, is located nearby, and the flow of tourists in the Sagrada Familia area exceeds20 million peopleevery year.

Object in the center of Barcelona

Another property presented by Decart Property Investments is located in the center of Barcelona and its price is2,400,000 eurosThis store, with an area of1595 square metersprovides an annual income of4.65%As in the previous case, all advantages for the buyer are provided here, including the possibility of obtaining a residence permit and an online viewing. The tenant of this premises is a well-known hotel chain, with which a long-term lease has been signed. Within a radius of200 metersKey elements of the central area are located here, including eight hotels and the famous Joan Miró Park, which indicates a high level of foot traffic and the attractiveness of the property.

Commercial real estate for 575,000 euros

One can also consider an offer to purchase commercial real estate in Barcelona for575,000 euros, with a total area of297 square metersThis property is perfect for running a business and provides a stable income level.6.5%per year. Its location in a densely populated residential area attracts tenants, and the developed infrastructure includes:

• Supermarkets
• Fitness centers
• ATMs
• Public transport stops

The nearest city library, Biblioteca Gabriel Garcia Marquez, is popular and recognized as one of the best.

Unique offer in Marbella

In Marbella, there is a unique offer — a space for a veterinary clinic, listed for sale for150,000 eurosThis is a great opportunity to take over a business with an established client base, located in a tourist area just a few steps from picturesque beaches. The clinic is spread over two floors with a total area of110 square metersThe first floor includes a store, a waiting area, and a reception, which ensures comfortable service for clients.

Commercial real estate on the Costa del Garraf coast

Next, on the Costa del Garraf coast, investors can participate in the purchase of a unique property at a price1,200,000 eurosThis property, located in the city of Castelldefels, has an area of562 square metersin the second line from the sea. The interior spaces occupy141 square metersand there is also a large terrace with an area of421 square metersCurrently, this property is leased by a well-known restaurant chain that has12 establishmentsin Catalonia. The lease agreement was concluded for10 yearsIn April 2019, what guarantees a stable income.

Proposal in Tenerife

In conclusion, a commercial space is offered in Tenerife with an area of126 square metersat the price285,000 eurosThese spaces are perfect for a variety of businesses, such as medical centers, shops, or driving schools.

Conclusion

All these offers from Decart Property Investments make the company an attractive choice for those looking for profitable opportunities in the commercial real estate sector in Spain.

Business licensing

Obtaining licenses for various forms of business is becoming easier than ever. The main office is located on the central street in Adeje, on Las Torres Avenue, which ensures high visibility and easy access.

Investments in commercial real estate

This respectable area offers the opportunity to invest in commercial real estate at a price700,000 €in Barcelona, Spain. The property has an area of86 m²Located in Sants-Montjuïc and situated on one of the city's key roads. Currently, this space is rented by a well-known coffee chain, which significantly enhances its appeal.

Additional specifications

• The owner has a license to set up a terrace with the right to install up to six tables.
• The rental agreement was signed in 2015 and will be valid until 2033.
• The annual rent is34,572 eurosA deposit of two months' rent is required.
• Monthly utility expenses amount to164 euros.

Second sentence

There is another interesting offer: a café or restaurant in Barcelona with an area150 square metersoffered for400,000 €This is a fully functioning establishment with a tenant and it generates income.4.8%annual profit. Interest rates on loans range from2 to 3%.

Infrastructure

The establishment is located in a residential area with a well-developed infrastructure, where there are large supermarkets, a variety of restaurants, banks, as well as green parks and schools.

Market dynamics

There is an interesting trend in the commercial real estate market. Those who prefer a more cautious approach can be advised to wait for a more stable environment. In recent months, inflation in European countries has peaked, but it is now starting to gradually decline.

Review of rental terms

In the near future, there will be a review of the rental terms, which may lead to an increase in rental rates.

This is already provided for in most contracts, which creates favorable conditions for commercial property owners, as it can mean an increase in profitability.

Investment strategy

The purchase of a second home can be postponed, while investments in commercial real estate, especially in properties located on the ground floors of buildings, can prove to be quite profitable.

It is noteworthy that the 2020s have shattered the usual business standards and rules. Now, planning horizons have significantly shortened, and many companies are adapting to new conditions in just a few months, sometimes even in a matter of weeks.

Investments in defensive assets

Predicting further economic changes is becoming increasingly difficult, and no one can say with certainty what changes await us. This is why investing in traditional safe-haven assets, such as street retail properties in major European cities, is becoming a more relevant and sensible strategy for capital protection.

Conclusion

In conclusion, after a thorough analysis of the current situation in the real estate market in Spain and Europe as a whole, I have come to the conviction that, despite all the challenges and negative factors such as rising energy prices, inflation, and changes in policy, the market still holds significant potential for recovery. As the managing partner of Decart Property Investments, I observe how both buyers and sellers are adapting.

Canada, Spain, and many other countries are experiencing economic changes that have affected the stability of domestic housing. However, the Spanish, accustomed to changes, find the strength and resources to cope with the new conditions. Rising mortgage rates may certainly cool the market a bit, but in my opinion, this is a temporary phenomenon.

Prospects of the real estate market

It is worth noting that statistics show that even in times of crisis, the real estate market remains one of the most reliable options for investment. Factors such as:

• High quality of life
• Mild climate
• Attractive infrastructure

They continue to attract the attention of investors both from within the country and abroad.

I believe that we have bright prospects ahead of us, and soon we will see the stabilization of currency and economic indicators. Investing in real estate under these conditions can be a great opportunity to create a reliable source of income. Despite the past year, which has been a real challenge for many, the market is starting to recover, and better times are undoubtedly ahead. Therefore, if you are considering investing in real estate, now is the time to act.

Conclusions

Thus, based on what I've seen and analyzed, I remain optimistic about the future of the real estate market in Spain and beyond. The future is about investments, constant attention to changes, and the desire to find opportunities even in the most challenging situations.