CITIZENSHIP-BY-INVESTMENT
Spanish Property Market Booms
Increasing number of South Africans investing
BY EMMA CLARKE
S
outh Africans have long been investing in European property, especially in the UK, but over the past few years more and more investors have been turning their attention to Spain. According to recent BBVA Research, the Spanish property market reached full growth phase in 2016. With the Spanish economy expected to grow by 2.7 % in 2017, the value of Spanish property is on the rise, making it one of Europe’ s most undervalued property markets.
Advantages of Spanish residency
Whilst the 500,000 euro price tag limits Spain’ s golden visa programme to South Africa’ s most wealthy, there are many benefits attached to Spanish residency. As Spanish residents, South Africans can access free Spanish healthcare, send their children to top-ranking European schools and universities for the same cost as European citizens, travel visa-free within the Schengen zone, and establish their business in the stable European economy.
Sergio Codonyer, managing director of Door to Europe, a social business which guides non-EU citizens through the process of securing Spanish residency, believes that we will see a rise in the number of South Africans investing in Spanish property.
“ Until recently, Spanish real estate was largely overlooked by South African investors, but with the value of the Spanish market rising and the obvious benefits attached to Spanish residency, I think more and more South Africans will choose to invest in Spain over other European markets, despite the hefty price of residency.”
What are the requirements?
To secure Spanish residency, South Africans must purchase property worth 500,000 euros or more. They do not need to invest all 500,000 euros in one property, but the total value of their Spanish properties must be equivalent to or more than this amount to qualify for residency.
After purchasing Spanish property, investors submit a residency application to the Spanish government. The residency permit is then valid for a year, with renewal taking place every two years. The only requirement to keep the residency permit is that ownership of the property is maintained, but owners need not be resident in Spain and may rent out their property.
After ten years, investors can also apply for Spanish citizenship and a Spanish passport, provided that they have spent at least five years living in Spain and pass their citizenship exams.
WHERE TO INVEST Barcelona
The best area of Spain to invest in is undoubtedly Barcelona and its surrounding areas. In 2016, property prices in Barcelona rose by 14.4 % and the city received 18 million foreign visitors, giving South African investors the chance to make a good longterm return on their investment and ample opportunity to rent their homes to tourists.
As the business hub of Catalonia, the demand for rented accommodation in Barcelona is high, enabling investors to rent their homes on a long-term basis if they’ d prefer.
Madrid
Investing in Spain’ s capital city is also a good option for investors. Whilst Madrid’ s tourism industry is not as strong as Barcelona’ s, with Statista recording 5.74 million international visitors in 2016 compared to Barcelona’ s 18 million, the annual growth rate of properties is currently at 18 %, offering buyers a great long-term return on their investment.
Coastal Spain
Coastal Spain has long been popular with tourists, with destinations such as Andalusia and the Balearic Islands receiving a large proportion of 2016’ s international tourists.
Whilst the property market is not as strong as it is in Barcelona and Madrid, there is still plenty of opportunity for investors to rent out their homes.
54 NOVEMBER 2017 SA Real Estate Investor Magazine