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Spanish property market recovers to pre-2008 crisis figures

Monday 4th June 2018

Written by Mark Burns, Hopwood House

The Spanish property market saw its property transaction levels increase in 2017, with figures reaching heights last seen before the financial crisis. Property sales in Spain increased by 15% from 2016 to 2017, up to approximately 465,000, which is the highest it has been since 2008. With transaction numbers up to pre-crisis levels, industry experts are suggesting that Spain is set to see continued success in its property market.
This is fantastic news for Spain as a whole, especially because statistics relating to the housing sector are a strong reflection of the economy of the country as a whole, suggesting that the economy could also be heading in the right direction. With this in mind, the idea that the housing sector is set to perform strongly once again is welcomed news, and suggests that the country can now go from strength to strength.
The impact of the financial crisis on Spain
Before the financial crisis in 2008, Spain was a country that saw its housing sector constantly improving, with house prices increasing by almost 200% between 1996 and 2007. Following the financial crisis, much of the good work was undone, with house prices falling by 42% between 2007 and 2015. Although this figure doesn’t compete with the initial increase of 197%, it was still considered to be a significant loss that truly affected the country.
In 2007, investment into the Spanish housing sector accounted for approximately 7.5% of the country’s GDP, whilst construction was a prominent source of employment. Not only does this suggest how detrimental the financial crisis was to the country at the time, but it also highlights the level of positivity that the news of a recovery brings. If things were to continue as they are now, Spain really could return to its glory days where the housing and construction sectors are concerned.
Spanish economic and housing performance
Spain saw a strong economic growth in 2017, outperforming the Eurozone average rates, as well as France and Italy. Employment rates in Spain are the highest that they have been in 9 years, with expectations that this will continue to rise in the near future, highlighting the way that the country has recovered. As well as this, interest rates have remained low, thus reducing the costs for a mortgage and allowing people to look for properties.
The housing market in Spain also performed well in the way that the economy has, outperforming Cyprus, France, Italy and Malta, with a 7% increase to Spanish property prices in Q4 of 2017, compared to the same period of the previous year.
However, some experts do still have worries about the future, even despite the strong performance of the markets. Firstly, many have pointed out that Spain has many properties on the market that aren’t being purchased, which could lead to property prices being kept from flourishing. As well as this, it is also known that British investors account for a large proportion of Spanish property purchases, and with Brexit on the horizon and other factors coming into play, many are concerned that the demand from Brits may diminish. Despite this, it is still widely thought that the Spanish property market will continue to improve, and it is unlikely that there are too many issues that will damage the currently strong scenario.
For more information or to browse a range of properties for sale in Spain, please contact Hopwood House.

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Editorial Contact Details - Conor Shilling
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