Why Galicia is the new hotspot for property buyers in Spain
Galicia's appreciation for environmental conditions and affordable property prices make it an attractive investment destination.
Welcome to the Homevest Digest, a newsletter for non-residents looking to buy properties in Spain.
This month, we’re looking at why Galicia, Spain’s beautiful green region, attracts more locals and foreigners to buy property. With prices rising per square meter in 2024, we’ll explore what’s behind the trend.
Missed our 2024 learnings about property investment in Spain? Catch up with our last digest.
Read time: 3 minutes
Galicia: Spain’s green gem with favorable environmental conditions
Extreme weather conditions in Spain, such as heatwaves and floods, have highlighted the growing importance of sustainable design and construction. These challenges may also shift interest toward Spanish regions that are better protected against such conditions.
In this context, due to its environmental characteristics, Galicia stands out as a potential climatic refuge. Known for its lush, green landscapes and forests, Galicia leverages its natural abundance to become a climate action leader in Spain.
Unlike Spain’s more popular coastal areas, Galicia offers mild temperatures year-round. This also comes with higher rainfall throughout the year – a tradeoff for its green and serene environment.
2024 showed a strong property market in Galicia
Galicia's appreciation for environmental conditions and affordable property prices make it an attractive investment destination.
Boasting the longest coastline in Spain, Galicia also offers convenient access to other parts of Spain and Portugal, making it easy to travel between the two countries.
In the first half of 2024, property prices in Galicia increased by 15.3%.
By October, the average price per square meter was €1,321, with Pontevedra being the most expensive (€1,626) and Ourense the cheapest (€1,001).
"We have noticed a significant increase in demand for homes from international buyers, from other parts of Spain and also from locals looking for a second home here. Buyers prefer properties close to the coast, but no further inland than 20 kilometers, striking the perfect balance between rural surroundings and being close to the sea" explains Rafael Rosendo, director of Lucas Fox in Galicia.
A hidden gem for luxury homebuyers
Foreigners dominate the luxury home market in Galicia, accounting for 72% of purchases, compared to 28% from national buyers, according to Lucas Fox agency. The southern part of the region, particularly around Pontevedra and Vigo, is especially sought after.
Traditional Galician-style properties are highly popular due to their spacious layouts and large plots that offer privacy. Prices for these homes range between €400,000 and €800,000.
There is also growing interest in country houses, though many require refurbishment. Renovating these properties can add significant value, whether for personal use or flipping. However, well-preserved lands often come with restrictions on construction. If you plan to renovate an older building, be sure to check local planning regulations first.
What will happen to interest rates in Spain in 2025?
Galicia’s growing popularity among property buyers might accelerate further with lower interest rates.
CaixaBank expects the ECB to cut rates in 2025, reducing borrowing costs and making Spanish mortgages more attractive. For regions like Galicia, this could mean even more interest from both local and international buyers.
Currently at 3.5%, CaixaBank estimates that the Eurozone interest rate equilibrium will settle between 2% and 2.25%. The ECB reducing rates will directly impact the housing market by increasing demand, transactions, and property prices.
If lower rates align with your plans, now might be the perfect time to prepare your budget. Tools like Homevest can help you estimate your borrowing capacity and closing costs, ensuring you’re ready to take advantage of favorable conditions.
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