Walter Finch
A LEADING Spanish property investment expert has warned potential investors that bargain flats for around €50,000 may not pay off in the long run.
Sergio Gutiérrez, a specialist in real estate investment, has spoken out against the growing trend of influencers promoting cheap property purchases as guaranteed money-makers, particularly as Spain’s housing market continues to reach dizzying new heights.
According to the latest data from property portal Fotocasa, Spanish property prices soared to €2,635 per square metre in May 2025, marking a staggering 14.8% year-on-year increase and representing the largest price surge in the country’s history.
The dramatic price rises come against a backdrop of structural housing shortages and declining wages across Spanish regions.
Current average salaries stand at approximately €28,050 gross annually, equivalent to around €2,337 per month.
READ MORE: Property taxes to be slashed in Costa del Sol town
However, the most common salary in Spain (modal salary) is around €18,500–€20,000 per year, according to Spain’s National Statistics Institute.
These tough economic conditions have created a dangerous trend among novice investors who are being lured by promises of easy returns from purchasing properties in Spain’s more affordable areas.
“I keep seeing videos advising people to invest in €50,000 flats, suggesting that if you buy for €50,000 and rent for €500, you’ll automatically achieve a 10% return. It sounds easy, doesn’t it?” Gutiérrez explained.
“Well, it’s not as straightforward as they make it seem, and I’ll explain why with three crucial reasons.”
The expert’s first concern centres on tenant turnover in low-demand areas.
“In areas with low demand, it’s more difficult to find tenants, so if one leaves, you’ll have periods where the property sits empty and you lose profitability,” he warned.
His second point addresses the liquidity issues associated with such investments.
“If you want to access your money quickly, selling will prove very difficult because these are areas where the buying market also has less demand.
READ MORE: Property purchases set all-time April high in Spain’s Costa Blanca
“Otherwise, why do you think you can buy so cheaply?”
However, Gutiérrez’s most serious warning relates to Spain’s current rental market bubble.
“Has nobody stopped to consider that there’s a rental bubble caused by low supply, high demand, and housing legislation, and that one day this bubble will burst?” he asked.
“When that happens, those €50,000 flats will rent for €300 per month, and when you try to sell, investors won’t be interested anymore. You’ll have neither rental nor sales demand.”
The expert particularly cautioned investors who have taken out mortgages to fund such purchases, warning that the financial consequences could be severe when market conditions change.
Recent rental market data supports concerns about regional variations in demand.
Madrid has experienced the steepest rental price increases at 15.1%, followed by Aragon at 14.5% and Catalonia at 13.8%. Castile-La Mancha, Andalusia, Galicia, and Valencia have all seen increases above 10%.
Conversely, regions with more modest increases include Asturias (8.6%), the Basque Country (7.9%), Extremadura (7.3%), the Canary Islands (7%), Murcia (6.9%), Navarre (5.5%), Castile and Leon (4.6%), Cantabria (3.7%), and La Rioja (3%).
In terms of absolute rental prices for 2025, Madrid leads at €21.70 per square metre, followed by Catalonia (€20.04), the Balearics (€17.99), and the Basque Country (€16.63).
Extremadura remains the most affordable region for renters at €9.90 per square metre.
The warning comes as Spain’s housing market faces unprecedented pressures, with the combination of rising prices, stagnant wages, and structural supply shortages creating a perfect storm for both potential homeowners and investors alike.
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