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The Spanish property market predicted to grow in 2018

Monday 4th December 2017

Written by Mark Burns, The Overseas Investor

Spain is not just sun, sea and sangria, it also the country of sales when it comes to the property market.
 
Market growth
 
The Spanish property market has seen a steady growth and this looks set to continue throughout next year as well. It is estimated the country will see a rise of 9.3% in sales in 2018, whilst prices are also set to rise by 6.1% in the same period. These rises look healthy, although they do still sit a whopping 27% below 2007, when the market was at its peak.
 
There will still be a good degree of growth this year too, with re-sales and new builds continuing to rise by 5.8% over the final quarter of 2017. 
 
Whilst the completion of new homes in Spain are also nowhere near the boom levels once seen, it is expected that they will continue to grow over the next two years to over 63,000 in 2019.
 
Catalonia
 
It is yet to be seen how the attempted declaration of independence by Catalonia will affect the markets. The region is generally recognised as the wealthiest in Spain, with Barcelona enjoying the highest property prices in 2017. It is easy to see why the Spanish government is reluctant to let the area go it alone. 
 
The area is now under the control of the Madrid Government, and with elections due in December it is an area of uncertainty that makes forecasts tricky. Caixa Bank is the third largest bank in Spain, and their announcement that they will be moving out of Catalonia shows that the future for the area is difficult to predict, as is its effects on the rest of the Spanish economy.
 
Share prices are beginning to slump for those large companies who have a substantial presence in Catalonia. 
 
Madrid
 
When it comes to luxury property, Madrid is a city that is leading the way. It is estimated that Madrid is experiencing a rise in sales by as much as 30%, whilst sales values have rocketed up by 170%.
 
Madrid buyers are largely coming from America and the United Kingdom; however, Latin American buyers now make up almost a third of those snapping up property in the city. The local market is still a buoyant one as just under half are Spanish buyers, although many are investors and second-home owners rather than full-time residents. 
 
It is thought that Madrid is now the fourth best city in Europe for property investment, with Berlin, Dublin and Hamburg just in front. One of the reasons for this is due to the high potential for capital gains as well as the solid rental returns and the much sought-after lifestyle that Spain can offer.
 
Whilst areas like Madrid offer good value for money, it is important that the market varies across the country. Some of the more desirable areas have seen notable increases, but the prices in other areas have only recently levelled out. When investing in Spanish property, it is important to understand which areas will offer the returns you are looking for.
 
 


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Editorial Contact Details - Conor Shilling
conor.shilling@angelsmedia.co.uk
0845 672 6000
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