There are many reasons why people decide to move to Spain. The weather certainly has something to do with it, but as well as that there is a general understanding that it is quite a cheap place to live. But is the cost of living really that much cheaper? This guide will go over some of the basic costs to come up with a general assessment of the living costs in this popular country.
Everyone wants their money to go further, and many people think that by moving to Spain, not only will they get the warm climate and the beaches, but they will also get it all for a lot cheaper. So is this true?
Currency Exchange
Many people were enjoying a happy retirement in Spain living off their UK pensions until recently, when the value of the pound suddenly crashed and they realised that they could not afford to live there any more. Be aware of currency fluctuations if you live off a pension or your savings as they can drastically influence your overall cost of living.
Salaries
If you are moving to Spain to work rather than to retire, you should be aware that salaries are often a lot lower than you might be used to in your home country. Young people often live at home into their 30s, so they have less need to spend money on a property and employers can keep the salaries low. So although in general the cost of living is less, so may your salary be, cancelling out the benefits.
Properties
Depending on the exchange rate between the euro and your currency, properties are generally quite cheap, but this depends on where you live. A large property next to a beach in a touristy location will set you back a lot more than a property out in the country. If you need to take out a mortgage then the interest rate is currently about 6%.
Renting is generally quite cheap but again it depends on where you live. A property in one of the main cities such as Madrid and Barcelona, or in a popular tourist destination, can set you back a lot more than a property in a smaller town.
Taxes, however, are relatively low, and could cost as little as 250 a year on an average-sized property.
Utilities
There is not a great deal of difference between the utilities in Spain and elsewhere. On average, you can expect to pay about 40 a month for two people sharing an average-sized property, but add up to a third extra during the summer if you are using air conditioning. Gas will generally cost about the same amount, again going up this time in the winter for extra heating costs.
Phone and Internet
Phone and internet costs can actually be more expensive in Spain, at least proportionally, compared to other countries. This is generally down to a lack of competition in the industry with Telefonica being the only major player. You can expect to pay about 25 a month for your phone bills plus extra for calls.
Food
Food is generally cheaper in Spain than in many other European countries. Groceries will be fairly cheap, and especially outside of the major cities where they will cost more. Buying locally and at markets will be where you find the cheapest prices. However, the price of food is in correlation with the price of fuel, which has gone up by 30% in Spain just in 2009.
Eating Out
Eating out can be quite cheap, depending on where you choose to go. In a non-touristy area you should be able to find a good meal for 15 a person, but this goes up significantly in tourist destinations and in the major cities.
Luxuries
Luxury clothing and shoes can be quite expensive, as can smaller luxuries such as makeup.
Beer And Cigarettes
Prices are changing all the time, and its impossible to put prices here for everything. However cigarettes are a lot cheaper than the UK, but are probably not especially cheaper than other European countries, costing between 2 and 4 for 20. Beer is also reasonably priced, and you can expect to pay between 1 and 2 for a small bottle.
Getting Around
If you live in a small town then you wont have to worry too much about transport costs because you will be able to walk to most places. However, if you live in a city then it is likely that you will need to take the public transport if you do not own your own car, and this is generally quite cheap and of a high quality.
Health Insurance And Home Insurance
Healthcare is very good and not too expensive. In fact, you can generally receive the same level of care that you would expect back home, and even better in some cases, for a reasonable price. However, the cost of course depends on the company and the level of cover that you will require.
Home insurance varies depending on the property but is generally less than other European countries including the UK. You can get contents cover, buildings cover or both, and the premium will depend on what you are covered for. You can find some very cheap premiums but if they do not provide enough cover then you could find them costing a lot more in the long term.
In General
In general, most analysts suggest that there is a 10-15% lower cost of living in Spain than in the UK and other European countries. If you are two people sharing a property in a city then you can expect to pay a minimum of 800, but often a lot more. This of course depends on your lifestyle.
And things do not look like they are getting cheaper. High inflation rates mean that, although only officially 3.5%, in some areas the real effect is about 10%, meaning the differences in the cost of living between Spain and other countries is starting to decrease.
Robert writes for Alanda Homes who are a property developer and real estate agent based in Marbella on the Costa del Sol. To view a list of resale and new property for sale in Costa del Sol, please visit www.alandahomes.com
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