Housing is no longer a place to rest, it has become the epicenter of work for many citizens after the covid-19 pandemic. Faced with this situation, the second residences are presented as an ideal choice for those who are now interested in an alternative place both to rest and work remotely. Solvia points to five reasons to buy a second residence this year, including the ability to negotiate the price and to use the investment as a means to generate profitability.

Besides, a study of the real estate network Comprarcasa shows figures by 9% the average negotiation on a property during the months of May, June, July and August. According to the data managed by the company, with more than 150 agencies spread between Spain and Portugal, during the Spring/Summer potential home buyers proposed discounts of between 15% and 20% to owners interested in selling a residential property, although after negotiations between the parties the average reduction remained around 9% compared to the initially published price.

The current market situation and new interests in the demand for housing make this year an ideal time to acquire a new home as properties remain on the market at the original price and have not been increased due to the negotiations tendency. Faced with this situation, Solvia experts point to 5 reasons why buying a second home this year can be a great opportunity, both in the short and long term:

• Rest and vacation assured. The summer of 2020 has been very different from previous years. The purchase of a second residence in which you can enjoy the summer holidays, and looking ahead, in your own safe and comfortable environment is presented as a good option. Many Spanish and European buyers have seen a second home on the coast as a haven and a possibility to change confined spaces and to be able to breathe.
• Good opportunities and more bargaining power. After a few months in which the real estate sector suffered a slowdown during early Spring in its activity in the context of the health crisis, new opportunities arose as some sellers have chosen to divest the most from real estate to obtain greater liquidity or change their interest in certain assets. This practice will be beneficial for buyers, as they will have more bargaining margin to acquire real estate at more affordable prices.
• An investment bet that can generate profitability. Buying a second home that offers a change of air and a pleasant place to spend the holidays, or even where to telework, can lead in the medium-long term in an increase in profitability in case of rent or revaluation of the property. Despite the advent of the pandemic, short term rentals/long term rentals remain a good cost-effectiveness option. According to the Housing Market Indicators offered by the Bank of Spain, gross rental yield in the second quarter of 2020 - after the arrival of the pandemic - was 3.7%; the same value as the previous quarter and only two-tenths of a percentage below the same period in 2019 (3.9%). Also, it is necessary to take into account the acceleration that the covid-19 has produced in digitization and remote work. A fact that causes many to plan to live on a 'permanent' basis in less populated areas, thus increasing the demand for rent in those areas, especially in the coastal areas.
• Personalized attention and more time to make decisions. The holiday months have presented themselves as an ideal period due to an increase in free time for interested parties to explore the market and visit the properties. This is a time when both real estate agencies and the sellers and clients themselves have more time and flexibility, which implies personalized attention and the possibility to make decisions more thoughtfully. We have seen an increase in this during July and August and a time when we usually take holiday ourselves, Real Estate agencies on the coast have been busier than normal and have indeed closed sales due to this.
• The fall in the Euribor, a factor that could benefit purchases: this indicator fell in July to -0.279%. This is the lowest level set by the benchmark for most mortgages in Spain since February, just before the coronavirus crisis erupted, and departs from the 'rally' of the first months of confinement when it peaked since late 2016. Solvia assures that interested buyers could benefit from better conditions when applying for a mortgage, being able to obtain more attractive variable interest rates. Having said this though, some banks are choosing not to mortgage non-residents in Spain, and the emerging into one of larger banks such as Bankia/La Caixa(Caixabank) shows an increase in this. La Caixa(Caixabank) is one of the banks since the pandemic has refused all mortgages to non-residents in Spain. Mortgages percentages have also lowered, from 70% for non-residents to now 60% for those banks providing these. We do not have any indication as to what will happen in January 2021 with mortgages when Spain always has new rules/regulations in the new Tax Year January-December.
• Final note, this agency has sold during this Spring/Summer to mostly Spanish, Dutch and French customers. British buyers have seen an increase in permanent homes as opposed to holiday homes, from mainly British residents in rental property in Spain or living already overseas and re-locating to Spain.
• We hope this information has been useful to you, please do not hesitate to contact us for your new holiday home/permanent home/rental property possibilities. We also offer assistance on N.I.E.´s, residency in Spain, mortgages, currency transfers as you purchase your new property through us.