Five (sensible) ways to buy post-boom Spanish property

Tempted? Dive into Spain's property market the right way with these five tips

“Insanity,” Albert Einstein once said, “is doing the same thing over and over again and expecting different results.” It’s a smart observation. Sometimes you think you’re doing something ever-so-slightly differently, but if the results are not what you expected, then you’re probably not.

And it’s an appropriate way of looking at the Spanish property market. After a decade-long growth between 1997-2007, an inevitable (in hindsight at least) bust followed the boom, resulting in numerous burnt fingers, piles of negative equity, and thousands of shattered dreams.

But now the signs are that Spain’s property market is beginning to pick up again. Prices have fallen to levels resembling affordability, sensibility and transparency have returned to the market, and buyers are starting to come back. They’re not flocking – not yet – because many are either too wary or financially unable to take advantage of the current situation in the Spanish property market.

However, if you are interested in buying property in Spain, it pays to know just how to go about it: firstly for your own sake, and secondly for the sake of the wider industry. Nobody wants to see a return to the days of an overinflated property market demanding overinflated prices for overinflated commissions. Because if you inflate something too much, it’s going to burst.

Instead, here are five ways to do it differently this time… and hopefully achieve a different, more sustainable outcome.

1. Don’t take a leap of faith
Whether with employment, location, budget or social connections, gone are the days when you could book a one-way flight to Málaga and then figure it all out once you’d arrived. If you want to move to Spain, it is more important than ever to look after the most immediate priority: financial security. Whether this is a job offer in Spain, a healthy nest egg or the ability to work remotely, make sure that you have a way to make ends meet, otherwise you run the risk of a swift return to the UK, tail lodged firmly between legs.

2. Don’t pay more than you think is right
During the peak years of Spain’s property boom, people were willing to pay way over the odds for property because the feeling was that real estate prices would always rise, so an overpayment was seen as merely an investment for the future. Not any more. If a property feels overpriced, or is simply too expensive for you, don’t buy it. The chances are that its value will not increase by that much over the next few years, so it pays not to overstretch yourself.

3. But don’t keep pressing for a bargain
In the current climate, underpaying for a property is as dangerous as overpaying. While there are some distressed sales out there, the majority of homes that are priced as ‘too good to be true’ are priced that way for a reason. Maybe they lie on isolated urbanisations, or have unresolved legal or planning disputes, or suffer from some other unseen bedevilment. Whatever it may be, do not approach the Spanish property market as you would the January sales – intent on elbowing your way to a bargain – because that way lies further problems. Instead, set yourself a budget that you think is fair, and stick to it.

4. Buy for the right reasons
The ‘right reasons’ are different for everybody of course – the weather, the chance to swim in your pool each morning, the opportunity to learn Spanish, make wine or be close to your new job – but the wrong reasons are pretty universal. Buying a property in Spain for investment purposes is, right now at least, a risky move. Supply now outstrips demand in most regions, so there will be very little in the way of instant capital gains.

5. Forget about the money
OK, this may sound strange – especially considering the other four points just mentioned – but if you have a burning desire to buy a property in Spain and can afford to do so, simply buy a home that suits and then forget about the money. That’s not to say don’t keep up with your mortgage repayments of course, but rather simply enjoy your home for what it is: a place in the sun; a dwelling where you can entertain friends and family, make happy memories, relax in, party in, grow old in. It is not a cash cow. It is not a savings deposit. It is a home, in a blessed part of the world. Try to remember this at all times, and you’ll never regret it…