The fact that Spain is only recovering from the crisis that befell it is a great opportunity for investors who are interested in buying real estate there, and the first cities that come to them are its tourist coastal and resort cities like Málaga. “We would all love to return to Israel in 2009 and buy real estate at the prices of then. Investing in Málaga right now is like investing in Israel in 2009,” says Srulik Hanoch, CEO and Owner, SDB.
By: Daniel Dar
The last period smiled at Spain. In the last three years, it has begun to recover from the crisis of 2008 that struck Europe, and it seems that in the past year it has embarked on the king’s path.
Spain is considered the fifth largest economy in Europe with 46 million inhabitants and low inflation of only about 1%.
Spain’s economy has returned to interest investors, showing outstanding performance relative to its counterparts on the continent. The labor market, which posed the main threat to the Spanish economy, has returned to being efficient and effective for workers. The Business Security Index in Spain, which was used to moving at very low negative levels, returned to positive levels for the first time after a decade, and the growth rate in the number of real estate transactions in Spain is on a massive upward trend.
The fact that Spain is only recovering from the crisis that befell it is a great opportunity for investors who are interested in buying real estate there, and the first cities that come to them are its tourist coastal and resort cities. In these cities, which are based on a tourism economy, there has recently been a renewed boom, and most of the real estate activity takes place around them, with Malga, the southern resort town, leading the trend.
Málaga: lines to its image
The Spanish resort town of Málaga, located in Andalusia on the southern tip of Spain, is at the mouth of the Costa del Sol coastline and is a gateway for excursions to the famous coastal strip. In addition, it is also the starting point for excursions throughout Andalusia, from which you can reach the Gibraltar Peninsula, Sibilia, the capital of the province, and go on a tour of the white villages. As an attractive holiday destination, Málaga offers many different attractions that meet the needs of the many tourists who visit it, including excellent restaurants, diverse entertainment venues, historical sites and sunny beaches. Its historic center is full of charm, with the Picasso Museum, narrow streets and unique architecture, so in addition to the azure beaches and being a great starting point for excursions in the area, you can also spend many days of sightseeing there.
All roads lead to Málaga
Málaga is the main city in Andalusia and the ways to get there are very convenient. From here, you can easily reach anywhere on the Costa del Sol coastline and the entire country. Its airport has direct flights from major destinations on the continent and trains and buses arrive from all the cities of Spain. From Israel there is a direct flight to the area that takes only about four hours.
The growth engine: incoming tourism
Spain is the third most visited country in the world, after France and the United States, and has the fifth strongest economy in Europe. It is visited annually by about 75 million tourists, with a 6.1% increase in the number of international tourists staying at least one night and a 4.7% increase in domestic tourism (which includes accommodation at the destination). In Andalusia alone, 8,498,724 tourists pass through the region each year, representing a 13.1% increase in tourist arrivals to the region.
The main target audience traveling in Andalusia and Málaga in particular, are families who come mainly from around Europe. They choose to stay there for a few nights and enjoy the best attractions the city has to offer, and even rent a car and travel abroad. Other audiences are, of course, golf enthusiasts and those looking for spectacular beaches where they can relax in peace.
Real estate prices in Málaga
Since the year of the crisis in 2008, there have been massive declines in real estate prices, which have moderated over the years. 2014 was a turning point and the trend reversed. Prices began to climb, but in a relatively moderate manner, and they have not yet reached their pre-crisis highs and have not reached their full potential.
The interest on the part of Europeans in summer homes in resort towns such as Málaga, combined with the low prices and the low euro rate, has led to a resurgence of the real estate market and the interest of investors mainly in these areas, which today enjoy the first buds of the renewed boom, and are expected to prove themselves in real estate prices that are expected to continue to rise.
The opportunity: real estate investments in Málaga
“As part of our effort to search for attractive investment opportunities abroad for our investors, we carry out endless checks for different assets and in different countries. After identifying B.S., Houston, Los Angeles and Brooklyn, we discovered after a very in-depth market research that the next opportunity is in Málaga, Spain. Why Málaga? As an entrepreneurial company, we are first and foremost looking for property locations with very high demand and a rising market. We are all frustrated by the price levels and yields in Israel and it is clear to all of us that we would love to return to Israel in 2009 and buy real estate at the prices of then. Investing in Málaga right now is like investing in Israel in 2009,” says Srulik Hanoch, owner of SDB. “Therefore, we have created a conservative model in which we purchase an existing apartment building in the historic center of Málaga, in a prime location, and after a renovation and improvement process, we will sell it at a profit after only 18-24 months. In this way, investors will enjoy a low entry price for investment, a highly sought-after location in the heart of the old and touristy city, and an equity margin at the end of the investment period in a relatively short time. The profit will come both from the improvement process and as a result of the increase in the value of real estate as it has been in recent years and is expected to continue to increase in the coming years. At the same time, the investors are registered in the Land Registry as the owners of the property, and in order to give the confidence to the investors, SDB will be a full partner in the investment just like them. We strongly believe in Málaga as the next hot real estate destination and think it is an opportunity for any investor who is looking for an opportunity to make a profit at rising market prices rather than at their peak.”
