Spain’s recovery since the financial crisis of the late 2000s and recent improvements in political and economic stability have once again made the country an interesting option for foreign investors. There are several markets and assets which are predicted to be good investment choices in the short- and long-term, including a healthy real estate market. In this post, we’ll go over how to invest in Spain if you are interested in stocks, bonds and similar assets, and where to invest in Spain if you are looking to buy real estate property.
How to invest in Spain’s various markets
Outside of the real estate market, the most common choices for investors looking for where to invest in Spain are government bonds, equities/stocks, and corporate debt. A combination of political and economic factors have made bond performance quite weak compared to other countries, with yields in the ballpark of 1.40%. If you are interested in buying up some bonds despite the low yields, a lawyer with expertise in investments in Spain can help you through the process.
Although it has recovered substantially since the recession, Spain’s stock market is still not performing as strongly as most investors would like. This is still a reasonable option for some foreigners wondering where to invest money in Spain due to the country’s consistent recovery across all markets, though. You might consider an exchange-traded fund (ETF) representing IBEX, the country’s stock market. Some corporations will also issue American depositary receipts (ADR) to foreign investors.
Of all the non-real estate markets, mutual funds are arguably the best place to invest in Spain for a typical foreign investor, giving them access to the debt of Spanish corporations.
Best place to invest in Spain real estate
Property values have been growing steadily over the past couple of years in Spain, but prices are still quite low relative to pre-recession years, so there is plenty of room to grow. This makes real estate one of the top choices for foreign investors. If you don’t have your heart set on a specific geographic area and are wondering where to invest in Spain real estate, here are some of the best locations:
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Madrid: Apartments in the city center of Spain’s capital can be purchased for around €4,500 per square meter on average. Increases in property values have been modest relative to gains seen in smaller cities and towns.
- Barcelona: Even with political uncertainty, Catalonia is consistently one of the most-visited tourist destinations, and home sales to expats have been on the rise here.
- Seville and Malaga: The Andalusia region in southern Spain is gaining interest among tourists, and investors are following that trend. So far, property values here have not increased with other major cities, but they are currently seen as having lots of potential for growth.
- San Sebastian and Bilbao: Although Basque Country has a higher cost of living than most other places in Spain, it is an extremely popular spot for tourism. Buying a small apartment to use as a holiday home/vacation rental could be a good investment here.
- Tenerife: The largest of Spain’s Canary Islands off the coast of northwest Africa is a top getaway for tourists and expats in search of sunshine.
- Almeria: While not a super touristy location, Almeria is popular with British expats. This small port city also has the advantage of prices that are about 50% lower than the national average.
Where to invest money in Spain
From a real estate point of view, there are plenty of great options for where to invest in Spain. If you are looking to buy a property to use as a vacation rental, keep in mind that the major cities and coastal areas tend to be most suitable for this type of investment. Whatever your investment goal, remember to consult a lawyer to help you with the paperwork and red tape of buying property in a foreign country.