Thursday, December 8

Is it time to buy a second home in Extremadura?


The community stood out in April as one of the most interesting to invest in housing, reaching a gross rental return of 7.96%

The average price of housing in Spain last April stood at €1,906/m2, 140.96% more than in Extremadura, where buying a flat cost an average of €791/m2. The figures recorded for the last
sales price report of flats.com place the community as the cheapest in the national territory to acquire a home, a condition that, added to the fact that the economic effort to be made is also among the most interesting – 5.1 years of full salary would have to be dedicated to the purchase according to data from the trends report by the Appraisal Society- make the idea of ​​buying a second home in Extremadura an interesting option.

The recovery of the real estate market in the community is a reality and, although the increase in the number of sales is less pronounced than in other regions, the truth is that operations already exceed pre-pandemic levels. According to data from the National Institute of Statistics, between January and December 2021, 9,361 home sales were carried out, 27.41% more than in 2020 and about 22% more than in 2019. In January alone, 868 operations were carried out, the best record since 2013.

By provinces, Badajoz has recovered better than Cáceres, going from 4,634 sales made in 2020 to 5,976 in 2021 or, which is the same, registering an increase of 28.95%. Cáceres, for its part, added 672 more operations than in 2020, reaching 3,385, which represents 24.76% compared to the first year of the pandemic. In the words of the director of Estudios de piso.com, Ferrán Font: “Buying and selling remain strong, but the data tends towards stability.”

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“The real estate sector continues to demonstrate its strength and dynamism, showing that it is one of the safest markets for investors,” says Font. The expert highlights the behavior of the market in the last two years, a time in which “it has shown great resilience” which, he adds, it is now showing again “in the face of the rise in interest rates, inflation and the war started at the end of last February.

A profitable market

One of the main attractions of the Extremadura real estate market is the price of housing. According to the monthly report on flats.com sales prices, the community leads the ranking of the cheapest autonomies to buy a property with a price of €791/m2, which also records the largest year-on-year drop in prices by communities (- 1.63%).

By province, Cáceres (€763/m2) is cheaper than Badajoz (€809/m2), although the year-on-year variation is positive in neither of the two. This is not the case in the capitals where prices are notably more expensive and the year-on-year growth rate stands at 6.14% in the case of Badajoz (€1,436/m2) and 2.89% in Cáceres (€1,218 /m2).

In the case of rentals, only Castilla y León (€4.70/m2) is cheaper than Extremadura (€5.25/m2) to rent a home. In fact, Badajoz is one of the five provinces where rental prices have fallen the most. According to
the monthly report of rental prices of flats.comrenting a home in Badajoz is -15.56% cheaper today than a year ago.

However, the portal data has a positive dimension that is especially interesting for investors. Extremadura was ranked in April as the most interesting community on the national soil where to buy a home to rent. With a gross rental return of 7.96%, it leads the ranking followed by Castilla La Mancha (7.82%) and Aragón (7.26%). By provinces, Cáceres scored the best record with a gross rental return that reached 9.10% compared to 6.79% in Badajoz.

For Font: “buy to rent continues to be a profitable alternative, even above other financial products”. The manager of piso.com recalls, however, that “housing is a refuge value, but it is also the quintessential illiquid asset, a conditioning factor that must be considered before launching out to seek opportunities within this market.”


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