Crisis Property Investing Opportunities In Madrid, Spain

A Building Lot In Spain For US$207

What sets Madrid apart from other cities in Spain, indeed from other cities in Europe and even the world, is its unceasing, unrivaled energy. This is a city with a pulse. Walk its streets, sit in its cafes, or even gaze through a window at its eclectic mix of new and old buildings, and you can feel the life force of this unique place. It’s infectious. And the driving concept, the fuel that pushes the inhabitants of this great city forward is this:

Madrid’s people don’t want to exist. They want to live…and to live well.

I’ve been watching Spain’s real estate markets closely for some time, and my conclusion is that the Iberian nation represents an extremely interesting property-buying opportunity right now…including in Madrid.

After a deep, dark downturn that kicked off in 2008, light is emerging at the end of the tunnel. Property prices are down by a third from their peak, and I agree with those on the ground who say this market has hit bottom—at least in some parts and for some kinds of purchases.

So let’s drill down. Unlike resort destinations such as the Balearics (and other coastal and island locations), Spain’s big cities have diverse economies that are not reliant solely on tourism. Madrid’s property market, for example, is driven by tourists but also by expats and locals.

Overall, residential property sales in Spain have increased noticeably this year over 2013, but that’s not the whole picture. Much of this growth is down to the gathering pace of the recovery in countries outside Spain. Coastal tourist hotspots are being boosted by big tourist figures and by British, German, and other buyers jumping into that sector of the market to snap up bargains.

In Madrid, however, foreign buyers make up a far smaller proportion of the market. Real estate here also trades among the locals, meaning recovery in this city is lagging behind that in the tourism hotspots. But when that growth does come, it will be less vulnerable to the ebb and flow of interest from fickle international buyers.

So what’s on offer right now? I’ve selected some properties currently listed to help give you an idea of what to expect…

  • A well-located studio apartment in the sought-after Calle Aniceto Marinas area is close to the center of the city and right in the middle of the action. This apartment is small in the way that a Euro-city pied-a-terre can be small (it’s 40 square meters), but it has a small balcony and great river views. The price is 156,000 euros (about US$200,000).
  • Head out of the city center in the direction of the airport and you find yourself in Bahia de Alicante. On offer in this neighborhood is a two-bedroom apartment in a development with a shared swimming pool. This place is a more comfortable 76 square meters and the asking price is US$270,000.
  • Finally, here’s a unique offer in the rural village of Olmeda de la Custa, a small town an hour-and-a-half from the center of Madrid. This is a stunningly beautiful place at the foot of the mountainous Alto Tajo National Park. The small town center is a warren of quaint stone buildings and cobbled streets. The countryside around the town is given over to cultivating olives, potatoes, and other crops. It’s quiet, rugged, calm, and bathed in Spanish sunshine for most of the year.

Sadly, this is a town with a problem. Once home to 500 people, Olmeda de la Cuesta has just 35 inhabitants today and its population is the oldest in the country. It sounds like the plot of a movie, but the mayor and the townspeople have come up with a plan to attract people to live here at least part-time: massively discounted real estate. Right now, plots of land are on sale in the village from 160 euros (US$207) for 60 square meters to 1,300 euros (US$1,684) for 205 square meters.

“We want to attract more people so that the village does not disappear,” explains Mayor José Luis Regacho. “Buyers can build a house of up to three floors and can put in a garden. Some plots have caves that could be used as wine cellars.”

Although sparsely populated, the town has a church, a medical clinic, and a bar. For those in search of the quiet life—even part-time—this corner of the world would be hard to beat. And if you did choose to buy here, you could expect a welcome worthy of someone who has ridden in to save the town.

Robert Carry

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