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The Spanish property revival - Confidence in the market is rising

Tuesday 12th September 2017

Written by Roy Weatherby, The Overseas Investor

The Spanish property market seems to be experiencing some form of recovery with rises now being seen and house sales predicted to be up 10% year on year.
The BBVA bank predicts that for the first time since the economic downturn a decade ago, sales will break through the 500,000 barrier. It is felt that this relatively unexpected growth stems from an improving employment market in Spain and better outlook for the whole of the European Union. 
Spanish house prices
With a 3% growth in house prices now predicted for this year, the price per square metre is likely to average €1,570. This is a price last seen in 2004, although there are regional variations that have lead to areas such as Barcelona experiencing much greater growth.
The Spanish Land Registry shows that in May 2017 there was a 25% increase in transactions compared with the same time last year. This is the first time that monthly sales have reached 40,000 since the autumn of 2008.
It is believed that home sales have now grown every month for the last three years, and the latest figures seem to suggest that this is set to continue. Whilst there was a slight dip in sales during the month of May, it is believed that this is simply a seasonal pause and nothing more sinister.
The Spanish market
Whilst both sales and prices are still down significantly compared to the figures seen is 2007, it should not paint a picture of doom. This is largely due to the fact that 2007 saw the height of the property boom and so it is not a fair reflection of the market. This does show how far the market has fallen, but when figures are 20% below this 2007 benchmark, the market will be considered to have fully recovered.
House sales
As the latest house sale figures come from the Land Registry, there is some lag due to the fact that they are based on the number of sales recorded and not actual sales of that month. They also do not include off plan sales which are not actually recorded until the home has been completed.
In terms of location, the Costa Dorada has enjoyed the largest increase in sales, as this is now up by 52%. Valencia has seen an increase in 43%, Costa Brava has grown by 42% and Almeria enjoyed a 40% growth. However, this does not show the complete picture, as Teruel sales are down by 30% and Murcia, which is typically popular with British buyers is down 15%.
Overseas buyers
Some of the Spanish growth is thanks to the overseas buyers who have currently ploughed €888 million into the market in the first half of 2017. This is more than double the amount spent the previous year and has seen buyers coming from 15 different countries, including Germany, Scandinavia, Britain and Russia.
The second homes market is an attractive one for many, and Spain appears to be the destination of choice for many.
The Spanish property market is clearly on the up, and only time will tell how long it will take to reach a point of full recovery.
For more information on property investments in Spain, please contact Hopwood House.

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Editorial Contact Details - Conor Shilling
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