🦜 PerchPulse - The Spain Market Update February 2023 🦜

A warm welcome to the February issue of PerchPeek’s Spain Market Monthly update!

Here’s where you’ll find the hottest updates around employee relocation and international talent strategy, insights from our experts on housing and cost-of-living news affecting your staff, the latest trends in global mobility, and tips and tricks on ways to support your teams.

A fly-by summary

●     Expats name Valencia the best city in the world to live, but there’s room for improvement when it comes to work prospects, according to InterNations Expat Insider 2022 report

●     Rent has soared by 25% YoY in Barcelona and by 12% YoY in Madrid, top tips from PerchPeek around agency fees, and other key rental market updates for February 2023

●     A new ‘digital nomad’ visa has been launched in Spain, joining 25 countries worldwide with a similar scheme - why it can be a good idea to support remote work abroad

●     The cost of food has risen by 15.7% YoY, free travel on intercity bus routes has been introduced, and more - the latest Spanish cost of living updates for February

●     The annual Madrid Carnival is taking place from 18 - 22 February -  all the key details to share with newcomers to the capital, helping them settle in and embrace the culture!

Talent strategy: Valencia is the best city in the world to live, say expats

According to the InterNations Expat Insider 2022 report, surveying 12,000 expats worldwide about their experiences of their adopted homes, Valencia comes out on top!

Spain’s third largest city was ranked first overall out of 50 cities in the Expat City Ranking 2022, and also in the Quality of Life Index. Here’s what expats love about Valencia!

Quality of Life (1st out of 50)

●     Healthcare - affordability and accessibility (80% happy vs. 64% globally)

●     Affordability of public transportation (85% vs. 70%)

●     Recreational sports opportunities (92% vs. 75%)

●     Personal safety (92% vs. 81%)

Ease of Settling In (3rd out of 50)

●     Feeling at home (74% happy vs. 62% globally)

●     Social life (72% vs. 56%)

Personal Finance (3rd out of 50)

●     Cost of living (83% happy vs. 45% globally - that’s huge!)

●     Financial situation (67% vs. 60%)

However, there’s real room for improvement in the Working Abroad Index; Valencia only ranked 41 out of 50 here. The specific aspects that expats aren’t impressed with include:

●     Local job market (50% rate the local job market negatively vs. 27% globally)

●     Personal career opportunities (30% unhappy vs. 22% globally)

●     Overall job satisfaction (56% happy vs. 64% globally)

People leaders here should take these findings into consideration, reviewing work practices and development opportunities in order to improve employees’ general career satisfaction. For other locations, it’s a good idea to take on board what expats value highly, such as settling in well. Providing relocation support can make all the difference to their experience!

What’s more, these results indicate an exciting opportunity for Spanish businesses. People clearly love living in Valencia thanks to the high quality of life, but the lower satisfaction scores around work indicate that there isn’t as much competition for top talent in the area compared to Madrid and Barcelona, so it’s a chance to take advantage of this when it comes to hiring efforts.

Home-finding: Rents up by 25% YoY in Barcelona, and landlords may only raise rents by 2% annually

Spain rental market update

Key trends at a glance (source: Idealista):

●     January rents soared by 25% YoY in Barcelona and by 12% YoY in Madrid

●     Rental prices in Spain are expected to rise by 6% in 2023, according to Idealista

●     Property prices are expected to fall by 2.5% in 2023, which may positively impact the rental market if more rental properties become available  

Minimum rental costs- Spain - Q1 2023 (source: PerchPeek):

For rental cost data for other Spanish regions, givePerchPeek a shout here!

In the news

The government has agreed to continue limiting the amount by which private landlords can increase tenants’ monthly rent - a measure initially put in place in April 2022. The same limit remains - landlords may only increase rent by a maximum of 2% per year. This is an important law to share with relocating assignees, to make sure they avoid any unlawful price hikes!

Top tips on agency fees from PerchPeek’s Spain experts

90% of the time in Spain, prospective renters deal with a property agent rather than the landlord themselves. Agency fees are passed to the tenant and vary by city but are largely similar: in Madrid it’s one month’s rent, while in Barcelona it’s 10% of the annual rent (both plus 21% tax).

It’s important to manage assignees’ expectations around this convention. While working with an agent adds to their overall moving costs, it’s certainly a good thing to be dealing with someone experienced with rental contract law and the latest regulations!

Talent strategy: Digital nomad visa for remote workers launched in Spain

Spain has recently become the latest of 25 countries worldwide to launch a year-long ‘digital nomad’ visa, hot on the heels of neighbouring Portugal which launched one last autumn. It’s an exciting opportunity, not just for workers but also for HR teams outside Spain operating with a work-from-anywhere policy.

The government is currently making use of a three-month window in which interested workers may make minor tweaks to the full requirements, but they can apply for the visa from now.

Here’s what we know so far - as to be expected, there are quite a few stipulations!

●     To be eligible, workers must be non-EU nationals

●     They must be either self-employed, or employed by a non-Spanish company operating outside Spain

●     Freelancers can’t have more than 20% of their income come from Spanish companies

●     Applicants must have a minimum monthly income (amount is TBC)

●     They’ll need to show they have a place to live, and must take out health insurance

●     Applicants must have been working remotely for at least one year

Why support remote working?

As working practices evolve and digital nomadism is on the rise, People teams should fully consider whether to support staff to work remotely abroad, on a short term or longer basis.

This is a sought-after perk that may help staff retention and can be attractive to prospective new hires, keeping talent acquisition efforts competitive! Plus, this valuable life experience may positively impact your business, bringing new perspectives and creativity into the mix.

Of course, while there are many benefits, this working model won’t necessarily be feasible across all sectors, particularly those where in-person collaboration is fundamental. It also raises complications when it comes to tax compliance and payroll. Ultimately, it of course comes down to each individual business to decide on the best working model for their needs.

Cost of living: Key updates and cost-cutting advice for February 2023

With the cost of living crisis showing few signs of abating, and consumer prices having risen by 5.8% YoY, it’s important to keep on top of the latest updates and initiatives affecting staff.

Here’s PerchPeek’s summary of the latest cost of living updates for those in Spain:

●     The price of food in Spain has risen to its highest ever level, soaring by 15.7% YoY according to the National Statistics Institute (INE) - despite inflation falling in Q4 2022

●     Following the launch of free train travel in September, the government has now extended this offer to 42 intercity bus routes, replacing a 50% discount, as of 1st February

●     Spain is to ask the EU for an extension to the temporary gas price cap currently in place until the end of 2024, in a bid to bring down soaring energy prices

●     Second-hand shopping is now becoming all the rage with sales apps like Milanuncios, Wallapop and Vinted booming in popularity as bargain-hunters contend with inflation

Top tips for helping employees cope in light of cost of living challenges:

●     Share guidance on low-cost supermarkets like Alcampo, Supeco and Tifer, and second-hand shopping platforms such as Milanuncios, Wallapop and Vinted

●     Provide food for employees at the office

●     Provide information on public transport options, identifying relevant cheap or free routes

●     Implement low-cost health options like online sports meetups

●     Help relocating employees set up utilities to ensure they choose an economical tariff

●     Allow work-from-home days to reduce fuel or public transport costs

●     Share details of financial advice apps such as Wagestream

Support your talent: Help Madrid newcomers get to know the local culture at Carnival!

Relocating to a new city or country can be a daunting experience. With so much to organise and admin to sort out, it can be easy to overlook a crucial factor - getting to know the local culture!

Right now it’s a great time for relocating employees to arrive in Madrid, as they’ll be just in time for one of the biggest events of the year - Carnival, taking place from 18th - 22nd February! Timed around the last full moon of the winter, this event fills the streets with music and laughter.

Key ceremonies to look out for:

●     Carnival Parade - a neighbourhood-oriented celebration full of music and colour

●     Masquerade Ball - at the Círculo de Bellas Artes

●     Manteo del Pelele - ‘Tossing of the Puppet’!

●     Murgas y Chirigotas - street musician performances

●     Burial of the Sardine - a symbolic tradition to close the carnival

And that’s not all! Here are a few other can’t-miss events coming up in the Spanish capital:

●     Art Madrid 2023 - Contemporary art fair featuring over 150 artists, 22 - 26 Feb

●     Gaudí Exhibition - Explore the modernist architect’s work, CentroCentro, until 26 Feb

●     Meetup - Not a specific event as such, but rather the opportunity to attend hundreds! The Meetup app is a great way for new arrivals to try new things and meet new people

Sharing details of events like this can make a massive difference to your assignees’ wellbeing, helping them settle into their new home, experience local culture and get to know new friends.

We hope you enjoyed this month’s update!

If you have any feedback, comments or questions about what's happening in your location, feel free to reach out via the form at the bottom of this page.

Thanks for reading, and see you next month!


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