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Predictions for the 2018 Spanish property market

Wednesday 31st January 2018

Written by Mark Burns, Hopwood House

The Spanish property market is a key element to the property portfolio of many property investors across the UK, and so property investors should be aware of how the market is performing. In this piece, we discuss how the market has been performing recently, as well as predictions for the market as we head into 2018.
The Spanish property market in 2017
Industry experts are considering 2017 to be a strong year for the Spanish property market – and with good reason! Recent figures show that October was a particularly good month for the market, as new home sales were up by 30%, and re-sales were up by 26% for the month. Not only is this fantastic news for the market, but it also represents a sustained period of growth that hasn’t been seen in over 10 years.
Property sales were up by double digits in most areas of Spain through to October 2017, with only the Almeria area suffering a decrease, and the month of October actually saw property sales within Spain increase by 28%, an increase that trumps any other since the beginning of the housing market recovery. The capital city, Madrid, saw fantastic property sales growth of a strong 61% during 2017, whilst Catalonia was lower than might have initially been expected, and this is widely thought to be due to the current political uncertainty and struggles that the area is experiencing.
Property prices in Spain appear to be increasing, with an average increase of 4.1% year on year, which again is an increase from the 1.8% increase recorded in 2016, despite still remaining 38.9% below the market peak of 2007. The Balearics and the Canaries experienced the strongest price growth within a year on year comparison, seeing a 6.8% increase. However, once again due to the political issues associated with the area, Catalonia saw a much slower price growth to its properties. Catalonia did see strong property price growth of 6.5% in October, but preparation for and uncertainty surrounding the regional elections in December saw an increase of just 3.3% to property prices in November.
Outlook for 2018 
The year of 2017 is considered to be a strong one for the Spanish property market by many industry experts, and they are anticipating that the market will go from strength to strength once again in 2018, but are they right in thinking this?
Although nobody can truly predict exactly what is likely to happen, those expecting to see 2018 as another strong year for the market are almost certainly right. The number of sales has increased, and a big reason for that is the introduction of new homes to areas such as Madrid, Valencia and Barcelona. With more new homes being built, that trend is sure to continue throughout the year.
Spanish property experts also believe that a new wave of investors will look towards the Spanish market, including those from America, Canada, China and the Middle East, seeing property sales increase during 2018. As well as this, it is also thought that sales to certain European countries such as France, Germany, the Netherlands and some Scandinavian countries will account for a bigger proportion of the market sales, with British purchases likely to fall as a direct result of Brexit.

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