Well, you are not alone, and many of our fellow citizens and European neighbors think like you. So, what is this country where the weather is so beautiful, close to us, with a rich culture and one of the best cuisines, and which, an attractive feature, has an ultra-attractive real estate market compared to all its European neighbors? Well, Spain Madre de Dios! So take the plunge and sing with us: “We’ll all go, all go, all go to Tore Moulinos“. Here’s the scoop on your next move…
The real estate crisis in Spain in a few figures
40%, yes, it’s indeed 40% on average that the real estate market has lost since 2007 in Spain. Spanish banks, which had massively invested between 2002 and 2005 in real estate, find themselves with a real estate stock on their hands that they no longer know what to do with.
A misfortune for the Spanish citizen who is hit by an unprecedented crisis and cannot take advantage of it. Nearly 40% of young people under 28 are unemployed in Spain, and nearly 20% of the active population is as well.
A boon for the British, the French, the Russians, and… the Belgians
22%, yes, 22% is the increase in the number of real estate purchases in Spain between the second quarter of 2012 and the second quarter of 2013. So who are the Europeans taking the bull by the horns? As usual, the British are fond of it (understandable when you know the salary level in England and the dreadful weather there).
They represent 15% of real estate transactions; the French (seeking happiness elsewhere) account for 10% of buyers, the Russians (who have succeeded) represent a percentage of 7.6%, and… the Belgians rank fourth with 7.5% of purchases. For information, in 2007, Belgians represented only 2% of purchases in 2007…
Proportionally, the Belgian even appears as the leading real estate investor in Spain, and they mainly buy second homes in the north and south of the Costa Brava (Alicante, Altea, Calpe) as well as, of course, on the Costa del Sol (Malaga, Marbella).
How to obtain a mortgage in Belgium to buy a property in Spain?
Of course, if you wish to acquire a property in Spain, you will need – in the vast majority of cases – to take out a mortgage.
At this stage, you will face a double difficulty:
Either you decide to take your mortgage in Spain
In this case, you will have no difficulty with your mortgage, as long as you present a sufficient solvency situation. Indeed, the bank will take a mortgage registration on your property and find sufficient security there. However, to be able to take out a mortgage in Spain, you will need to be domiciled in Spain, which our fellow citizens do not always wish to do.
Or you decide to take your mortgage in Belgium
In this case, you will have no problem with domiciliation. However, you might encounter a difficulty in setting up your mortgage. Indeed, no banking institution will want to take a mortgage registration on a property located in Spain. Indeed, European agreements on recovery assistance are not yet optimal, and this situation still creates quite a few problems.
Therefore, the Belgian bank will want to take a mortgage registration on one of your properties located in Belgium. Consequently, this means that you must own a property in Belgium that is almost free of charges.
The pitcher goes so often to the well that it finally breaks…
This attraction of Belgians for Spain seems to go hand in hand with a sharp decline in real estate transactions on the Belgian Coast. A decline that real estate agents explain, among other things…, by the increase in Belgian taxation on second homes, with many municipalities on the Belgian Coast having increased their local taxes.
The same situation in France, where taxation on second homes and the taxation of capital gains on real estate have literally driven away foreign investors.
Finally, note that Spain is not an isolated case, many French and Belgians are investing in… Morocco for almost similar reasons.