The profitability of investing in a house on the Costa Brava.

The profitability of investing in a house on the Costa Brava.

"La Costa Brava", is an extension of land that has its beginning in the locality of Blanes and finalizes in the border of France with Portbou. In its more than 210 kilometers long we can find some of the best beaches in Catalonia.
These locations are highly valued by real estate investors, who are looking for a good business opportunity in housing investment.

The boom in housing on the coast, especially in some locations, which either because of its high tourist interest, or because of its urban consolidation after several years of crisis, is experiencing a considerable increase in price.

In the last twelve months, according to a report by UrbanData Analytics (UDA), the rent of the flats located on the first and second lines of the coast has increased by 8.95%.
In this same period the sale value has grown by 3.1%, so that the total return (rent plus sale) amounts to 8.78% and is close to the profitability of large cities.

Nature and key communications in the upturn:

The Costa Brava offers many advantages that have had a positive effect on the rebound of real estate transactions.
It is an internationally recognized tourist area and that along with the Balearic Islands has always been synonymous with paradisiacal beaches and overwhelming nature.
Good communications are one of the strong points to consider the Costa Brava as a perfect area to make investments, since the airports of both Barcelona and Girona, are close enough to move from anywhere in the world.
Also noteworthy is the public transport network that, by means of train or bus services, covers the main tourist destinations.

Tourism in real estate investment forms an inseparable binomial. These towns of the Catalan coast are a claim throughout the year for tourists. During the summer, coves and beaches are the main attraction, but the proximity to some of the most important ski slopes in Catalonia makes tourism more timeless.

According to the INE, Spain received around 13 million tourists in 2017, which represents a growth of 11.2% compared to previous years.

What do we understand by investing?
When we talk about investing in real estate we are not referring exclusively to large real estate operations focused solely on tourism. But, we consider it as investing capital in order to obtain additional profit.

Within the possibilities of the market, making a real estate investment is a guarantee where you can put money with relative ease, since, normally the market oscillations are scarce and we will always obtain a greater benefit with less risk than other types of stock exchange operations.

One of the first considerations that we must take into account to make an investment is to improve the property. The tendency to invest buying second hand property makes considering improving the property at the time of purchase is a great option to improve the profit from the first moment.

Specialists in investment and profitability consider investment in real estate as a high risk and very low risk investment.
In the case of a crisis situation at the global level, the punctual devaluation of the value of the property in the market is not something that should worry the investor, since his property will remain in a state of "sleeping capital", in this way we always preserve our capital and when the market returns to circumstances of rise, we will return to recover profitability on our property.

Considerations of Spanish investors:
As a general rule, Spanish investors tend to search for real estate where the price and location prevail. For several years, the trend of searching for the beachfront has been losing strength and currently for Spanish investors it is important that their new properties are close to the services and at the same time a good communication to go to the beach.

Considerations of foreign investors:
On the contrary, foreign investors prefer to bet on the size of their homes. Well located properties by the sea, over 100 square meters would be the stereotype of what a foreign buyer is looking for.
For a foreign investor, investments in second-hand housing are a priority, although there are also acquisitions of new construction.

Success stories in real estate investment in the Costa Brava:
As we have said throughout the article, there are many advantages to making an investment in the Costa Brava.
An example of this type of investment on a large scale, we find it in June of 2017 when the Swiss fund Stonewg made the investment of more than 52 million euros.
Another success story with greater impact is that of the Costa Brava Hotels de Luxe association, which made an investment of 4.7 million euros in the construction of facilities in order to improve leadership in the tourism sector.

Due to the good numbers of tourism, last year this association increased its turnover by 10% compared to the previous period. So, year after year, it is planned to increase investment in the improvement, expansion and conservation of the hotel park as well as in the acquisition of new services such as water areas and golf courses.

Annual results and forecasts 2018:
According to the news about the trends and real estate results of 2017 of La Vanguardia, the sale of beach homes on the Catalan coast has increased by about a 20%.

According to the data of different appraisal entities, these have skyrocketed with an increase of around 10% and up to 50% in many of the locations.
This great recovery of the coast is favored by two factors, the return of the national buyer and the continuity of the foreign buyer.

Since it is perceived that prices rise again, the Spanish buyer sees the acquisition of the property as a good investment.
Foreign buyers have remained and predominate in the north of the Costa Brava, mainly French, while the demand for first homes by Barcelonians seeking to reduce the high costs of the city of Barcelona have improved the sale in the towns of Maresme like Tiana, Montgat or El Masnou.

For 2018 the trend in the purchase and sale of real estate on the Costa Brava is expected framed within a bullish continuity.
The monetary stability situation of the Euro zone helps foreign capital to have more strength to be able to make this type of investment.
With the increase in the prices of Barcelona and Girona, acquiring as a first home a property of what was previously considered a second home is becoming increasingly common, prioritizing the quality of life from day to day at the distances of the city.

If you need advice about the most recommended properties to invest in the Costa Brava, we recommend that you contact us. We are specialists in the area and we know first-hand the possibilities of medium-term growth of the different locations. Contact our team of professionals and we will advise you without any compromise.