The Top 5 Regions in Spain for Property Investment in 2021.

Spain has always been a popular holiday destination with British people, with 18.08 million British tourists visiting Spain each year. Therefore, it is not surprising that property investors and developers are also keen to purchase holiday lets out there. 

With Spain’s hot summer weather and wonderful food and culture, coupled with their reasonable house prices, it has helped it become a firm favourite among us Brits. The latest Spanish government surveys suggest that t00,000 to one million British people own a property in Spain (The Local). 

However, it is not just the British people who are investing in Spanish property. Spain is a popular destination for foreign property investors, in general. In fact, it is international buyers who make up 16% of the market

Spain offers a number of different real estate options depending on which region of the country you choose to invest in; however, on average, the gross rental yield of Spanish properties is 4%. This figure places Spain in the upper tier of returns for major European countries (Property Investor Today). 

Despite this impressive track record, Spain’s property market, like many other countries, took a significant hit from the coronavirus pandemic. Combined with other economic factors, their property market received a fatal blow, similar to that of 2008.  

With international travel bans in place throughout the large majority of the year, Spain’s tourism has been grossly affected. As the Spanish economy relies heavily on this income, 2020 has been a difficult year. 

This being said, with 2021 on the horizon, there is no need to look elsewhere for your international property investment. The Spanish property market is resilient, and it is expected to bounce back, remaining an attractive proposition for the new year. If you are still keen to continue you with your Spanish property purchase, we’ve found the top five regions to invest in 2021.


Madrid is one of Spain’s favourite cities, and it is also a favourite target for foreign investors. In the first half of 2018, almost 5,000 properties were sold to foreign investors

Considering the difficulties the market has faced this year, Madrid’s property market is at the highest it has ever been. And, more importantly, prices are now reflecting this growth. The average rental price was 13.51€ per square metre at the beginning of 2019. These figures have taken the average yield in the prime residential spots to 3%, just topping London’s rates at 2.9%. 


Barcelona is famous for its art-nouveau buildings and its connections to Gaudi; but, in addition to that, it is also the start-up hub of Spain. From 2013 to 2018, Barcelona attracted around 2.22 billion euros in private equity investment.

Consequently, monthly rental rates here are now comparable to Madrid, averaging around 1,000€ per month for a studio apartment. The average rental yield is 3.5% in Barcelona, which is slightly higher than the capital, placing it among the best major cities in Europe for this category  (Property Investor Today).

Southern Spain

Southern Spain is home to the popular Costa del Sol. New figures have reported that 2.37 million Brits arrived at Malaga airport between January and September in 2019. This figure follows a year-on-year increase of 2.5% (The Olive Press).

In this region, there is a huge amount of property development and, consequently, rental prices here are particularly cheaper than the major cities. For example, in Malaga, the average rental price per square metre was 10€ in 2019. However, the gross average rental yield is 4.66% in Malaga’s city centre and 5.24% in the outskirts. 

Mallorca and the Canary Islands

A firm favourite is Mallorca; complete with wonderfully hot weather, beaches, as well as mountain scenery. From beach breaks, to walking and cycling holidays, Mallorca seems to offer something for everyone. Originally, Mallorca was quick to develop; large complexes were built including spas and swimming pools. However, development has now slowed down.

The Canary Islands lie on the other side of Spain. The unique geography here allows there to be sand dunes, tropical forests and waterfalls. Located off the North-West coast of Africa, the weather here is warm but often described as comfortable, suiting most British people. 

In Gran Canaria, you will find one of Spain’s highest average rental yields on the Canary Islands. Averages here are at 6.8%, with average house prices in 2019 settling around 1,604€ per metre squared.

The Basque Country

This region is one of Spain’s lesser-known areas; however, this should not be the case. The Basque Country is one of Spain’s wealthiest regions with the highest quality of living (Property Investor Today). Situated in the North-West of Spain, the climate here is more temperate and the scenery is consequently luscious. 

In this region, the average rental price is 10.82€ per square metre, for an existing home. There is 80km of sandy beaches in the Vizcaya area on the north coast, and here you can find the rapidly-developing port city Bilbao. In Bilbao, the average rental yield is around 4.11%.

Similarly, San Sebastian is another city in the Basque Country and is often compared to Nice and Monte Carlo. In this area, the average rental yield is around 3.4%.

Despite the variations between the regions, the one thing they have in common is their rentability. Their unique cultures and beautiful scenery will mean tourists will always be looking to explore what these areas have to offer. All that’s left to be done is to decide what type of property you are looking to manage; cheaper apartments in the South, or more luxurious accommodation in the North-West.

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