When it comes to buying property in Southern Europe, Spain has long been a top destination for international buyers. With its diverse cities, stunning coastlines, and rich history, Spain offers a wide range of options for those seeking a home or investment property. While Portugal has also seen a rise in popularity, there are significant differences between the two countries when it comes to property buying. In this blog, we’ll highlight the advantages of buying property in Spain over Portugal, especially in light of some of the challenges buyers are facing in Portugal today.
1. A More Stable Property Market in Spain
One of the key reasons to choose Spain over Portugal is the relative stability of Spain’s property market. While Portugal has seen a surge in demand over the past decade, the market has become increasingly volatile. Property prices have exploded in areas like Lisbon, Porto, and the Algarve, but without the underlying market trends to support such rapid growth. In some cases, properties are overvalued, and buyers are finding themselves unable to secure mortgages because the properties do not meet the bank’s appraisal requirements.
In contrast, Spain’s property market is larger, more diverse, and better regulated. With clearer market trends and more reliable property valuations, Spain offers a more predictable and secure environment for buyers. In addition, Spanish banks are more accustomed to dealing with international buyers, and the financing process is often smoother, with lower deposit requirements and more flexible terms.
2. Build Quality and Structural Concerns in Portugal
Another important consideration when buying property is the quality of the build. While Portugal is known for its beautiful properties, many buyers have reported issues with build quality. It is not uncommon for Portuguese homes to have structural problems, such as mold, dampness, or poor insulation. These issues are often exacerbated by the country’s humid climate, especially in coastal regions like the Algarve and Lisbon.
Properties in Portugal are also more likely to have weather-related issues, including cracks, water damage, and outdated plumbing. As a result, many buyers are left facing costly repairs after purchasing a property. In contrast, Spain’s property market benefits from better construction standards, especially in newer developments. Spanish properties are built to higher quality standards, and while they too can experience the occasional weather-related issue, the risk of buying a problematic property is significantly lower.
3. Overpricing and Stagnant Market in Portugal
The rapid rise in property prices across Portugal has led to an overinflated market, particularly in high-demand areas like Lisbon and Porto. While this may seem attractive for sellers, it has led to a situation where many properties are simply overvalued, making it harder for buyers to secure mortgages and leading to stagnant market conditions. Many properties in Portugal are left sitting on the market for extended periods due to unrealistic pricing, and buyers are often left frustrated by properties that are difficult to sell in the long term.
In Spain, however, there is a better balance between supply and demand. Property prices in popular areas like Costa del Sol, Costa Brava, and Madrid remain competitive, and the market is more transparent. Buyers in Spain are more likely to find properties that are priced according to current market trends, with a better chance of securing financing based on realistic property valuations.
4. The Buying Process: A Key Difference
The process of buying property in Portugal differs significantly from that in Spain, and for many buyers, Spain offers a more straightforward experience. In Portugal, the process can be more complex, with more paperwork and potential delays, especially for international buyers. There are also more hurdles when it comes to securing financing, with some foreign buyers facing difficulty in obtaining mortgages due to stricter regulations.
In Spain, the property buying process is generally smoother. While there is still paperwork involved, the system is well-established, and many banks and agencies cater specifically to foreign buyers. Additionally, Spain’s legal protections for property buyers are stronger and more transparent, with a clear and reliable framework for property transactions. This provides greater peace of mind for buyers, knowing they are protected by Spanish law and can rely on the experience of Spanish legal and financial experts.
5. Mold and Weather-Related Issues in Portuguese Homes
In Portugal, mold is a common problem in older properties, especially in coastal regions. The humid climate exacerbates the growth of mold, which can lead to health problems and costly repairs. Many buyers are unaware of this issue when purchasing older homes or properties that have not been adequately maintained. In some cases, the mold problem is so severe that it requires extensive work to fix, further escalating the costs of homeownership.
Spain’s climate, particularly in areas like Costa del Sol and Costa Brava, is generally drier and more temperate, which reduces the likelihood of mold and dampness. While properties in Spain are not immune to weather-related issues, the construction standards and the climate make it less likely that buyers will face serious problems with mold or other structural concerns. In addition, Spain’s newer developments are built with modern materials and techniques designed to prevent these issues.
6. Legal Protection and Transparency in Spain
When it comes to legal protections, Spain offers a more transparent and secure environment for property buyers. The Spanish legal system provides clear and well-defined property rights, and the notary system ensures that all transactions are legally binding and properly documented. In Spain, it is standard practice for properties to be registered with the land registry, providing an extra layer of security for buyers.
Portugal, on the other hand, while also offering legal protections, has faced criticism for a less transparent system, particularly when it comes to issues like property ownership and land rights. Foreign buyers in Portugal may encounter more legal complexities, which could lead to unexpected costs or delays in the purchasing process.
7. A Better Investment Environment in Spain
With its strong rental market, booming tourism industry, and greater variety of properties, Spain offers more long-term investment opportunities than Portugal. Areas like Costa del Sol, Costa Brava, and Madrid attract millions of visitors each year, making them prime locations for short-term rental investments. Additionally, Spain has well-established property management services, making it easier for international buyers to manage their rental properties.
In contrast, Portugal’s property market has become overheated, with prices outpacing rental yields in certain areas. As a result, investors may find it harder to generate a return on their investment, especially in regions where property prices have skyrocketed without a corresponding increase in demand.
Why Choose Spain Over Portugal?
While Portugal remains a popular destination for property buyers, Spain offers a more reliable, stable, and secure property market. From better construction quality and stronger legal protections to a more predictable and diverse property market, Spain stands out as the superior choice for those looking to invest in property in Southern Europe. With more affordable property prices, a lower risk of structural issues, and a more transparent buying process, Spain provides an excellent environment for both first-time buyers and seasoned investors alike.
Whether you’re looking for a second home, an investment property, or a permanent residence, Spain offers everything you need for a successful and rewarding property purchase.