Is 150k euros enough to buy your dream home in Spain?

New figures released by leading Spanish property portal Kyero.com, reveal that 45% of potential buyers using the website to search for property in Spain have a budget of €50,000 - €150,000 however with the national average property price now at €245,000 is this really enough to buy your dream home?

Analysing hundreds of thousands of property enquiries received by Kyero.com between 2004 and 2006 the majority of visitors were interested in properties in the provinces of Alicante, Granada and Malaga. The average property prices for these provinces are over budget at €233,400, €165,000 and €315,000 respectively however if buyers are prepared to sacrifice space for location then they are in luck as both Alicante and Granada offer 1 bedroom apartments for an average price of €115,000 and €124,000 respectively.

The data reveals however that space is a priority for some buyers with nearly 28% specifically enquiring about properties with 3 bedrooms. The national average price for a 3 bedroom property is €263,000, some 75% over maximum budget indicating that buyers will have to look towards undiscovered regions of Spain to find their ideal property within budget. Provinces such as Asturias, Badajoz, Caceres, Ciudad Real, Cordoba, Cuenca, Jaen, Lleida, Sevilla and Teruel all offer 3 bedroom properties under €150,000 with Cuenca coming in cheapest at €33,000.

Another interesting trend that the enquiry data revealed was that in the last year (2006) the most popular property type requested changed from apartments to villas. This supports the demand for more space but if we assume that a villa has a minimum of 2 bedrooms then none of the top 3 provinces offer properties within budget. The closest is Granada province at €157,000.

So why are prices of the most sought after properties in the most sought after provinces so much over the average budget?

As ever, the answer is not simple and there are a variety of factors to consider. Firstly demand for property on Spain’s costas (Costa Blanca and Costa del Sol primarily) has always been great. Attracted by clean sandy beaches, 300 plus days of sunshine a year, a familiar culture and cheap direct flights from the UK, millions of Britons flock to these regions annually. Where demand is high property prices will follow and this growth can be seen over the last decade especially with prices per m2 rising 65% nationally since 2002 alone (Spanish Valuation Society 2006). With respect to buying property, Spain is still our favourite destination with over 27% of all overseas property sales being in the country (ONS 2006) and so with vast numbers looking to buy in the same locations the supply of land and housing cannot always be maintained. Land becomes a premium and so larger properties, say 3 bedroom villas, become more expensive.

Secondly regards buyers’ budgets, people still expect to be able to find a bargain home in the sun. They may be influenced by media coverage or using dated or incomplete statistics, simply not aware of reliable timely data such as that available in the Spanish Property Price Guides from Kyero.com. Many people may have inherited a sum of money or have decided to release equity from their homes for the amount of €50,000-€150,000. Others may still feel that buying a second home may be risky and they don’t want to invest all they have or equally some may have invested in other properties overseas as well as Spain thus limiting funds.

Martin Dell, MD of Kyero.com comments, “Based on our enquiry data it is clear that buyers are looking to find their ideal home in Spain but at a bargain price. For those looking for a spacious property for a maximum of €150,000 I would suggest looking at inland provinces such as Cuenca or Jaen, those to the north such as Asturias and those experiencing tourist growth such as Cordoba or Teruel. It is also worth considering buying a property in need of renovation as you can increase the value of your property over time whilst making it your ideal home.”

It seems therefore that it is possible to buy your dream home in Spain however a trade off between location and space is necessary. The most important thing to do is be realistic. Think carefully about what is important to you, space, property type, location etc and what you can afford. Do your research and make sure the home you buy is the right one for you.