How Real Estate Market in Spain looks like in ? Current prices by squire meters in all regions of Spain — Chart. Trends and experts'. The Spanish property bubble is the collapsed overshooting part of a long-term price increase of Spanish real estate prices. This long-term price increase has happened in various stages from up to The housing bubble can be clearly divided in three periods: –, In the period of —, the price of housing in Spain had risen about. May 4, - Without notarial, registry or evaluation activity, real estate transactions should be “close to zero” as long as current containment measures are.
Commercial units and investments. Specialists are sure that this is one of the most profitable areas for investment in Spain at the current moment. Large international corporations, such as Yahoo and Microsoft, have their representative offices in these quarters. According to Savills Aguirre Newman's forecast, in over a billion euros will be invested in the offices of Barcelona. Luxury housing. Madrid ranked third in the world in terms of investment in luxury real estate, according to the Barnes Cities Index rating.
This is a large increase from last year, when the Spanish capital was ranked tenth. In drawing up the list, not only was the financial component taken into account, but other factors affecting the life of the buyer in a particular locality are also considered: economic and political stability, transport accessibility, level of taxation, quality of local education, etc.
Barcelona, although not included in the top 10 of the above list, offers buyers a lot of luxury real estate. And here it is not just about expensive units, there is housing for sale in iconic buildings in historic areas, like in Paseo de Gracia, one of the most recognizable avenues of the Catalan capital.
On five floors there are 21 four-room flats, and on the roof of the house there is a spacious terrace with a breath-taking view of the city. Spanish property prices in Growth at a good pace. One of the main indicators used to evaluate the condition of the real estate sector is the price of housing. By , according to the experts, this parameter will continue to rise but in a rather moderate way. Looking ahead in , Fotocasa argues that this sector will continue to grow at a good pace with prices continuing their upward trend, although they will tend to stabilize.
There will be a gradual stabilization in Madrid, Barcelona and other cities with notable recent increases, but prices will continue to grow in their urban areas, and the rest of territories may wait for moderate increases. It stated that at the beginning of , there was a rapid growth in sales of new housing. In January , 9, new homes and flats were sold — the highest figure in five years and At the same time, experts note that the overwhelming majority of transactions The most noticeable growth was registered in Extremadura, Galicia and Aragon.
One of the hottest housing markets in remains the Costa Blanca, popular among the British and famous for its affordable prices. In the first quarter of , Spanish real estate went up by 4. They report that houses and flats in Spain gained in price for the tenth quarter in a row. In 15 out of 50 provinces, the average cost per square metre in the first quarter decreased; this led to Zamora, Lugo, Albacete and Soria losing the most in price.
Sales and rental price difference. He suggested that this rise of rental cost, "has a clear ceiling". This ceiling will be reached when the rent will no longer be affordable for families. In the case of any kind of market regulation, the CEO of Anticipa Real Estate, Eduard Mendiluce, believes that it may have a reverse impact, such as a decrease in the supply of rental accommodation.
He points out that market performance shows that development is uneven; in some region prices are decreasing, which reinforces the need to be careful with the policies that are going to be introduced. And it's not due to strong family bonds, but rather unemployment and expensive rent. At the same time, due to the rapidly-growing demand for tourist rental housing in the country, fewer young Spaniards can afford to rent a flat. To summarise, one of the key reasons why the sale of property has undergone a significant growth in was the increase in the price of rentals.
Accordingly, the demand also went up and customers of all ages started to consider the option to rent to be an irrelevant spending and went for a purchase as the perfect potential long-term asset.
Spain property price forecast. The Spanish real estate sector will continue on expanding and developing this year, albeit not so rapidly, as reported by several specialists in the field. Last year the Spanish property market obtained good rates in terms of sales transactions, although most of them had been made on resale homes. What can we expect in the near future? The demand for property will strengthen this year, amounting for up to , units sold.
The market of resale housing continues to have a significant weight, mainly in the segments of the population that are considering a first purchase, due to the gap between the prices for new housing and salaries. The Spanish housing market will continue to emerge this year, with the main trend directed towards stabilisation.
There is still a room for development in the residential sector for , whilst the growth will be rather modest. Overall, the property market will have more possibilities in growth from the number of transactions rather than from prices. Mendiluce Anticipa , has estimated that the market, "has been expanding for some years now," and that this tendency will remain for the current year.
Following Anticipa research, expectations for point to close to , units sold, which is 5. Is the Spanish property market approaching a real estate bubble?
A real estate bubble? Experts deny that the market is heading towards one. For Mendiluce Anticipa , an increase in price is the case only in some cities, metropolitan zones, tourist areas or places with a big gap between demand and supply.
We should follow the logic and avoid talking about bubbles in the sector, because it is not the case. In prices were adapted to what the buyer could spend, and it is reasonable that the economy and the level of employment started to recover. As a consequence, prices will increase, and regions of high interest will feel a bit of stress. In megapolises such as Barcelona and Madrid the prices went up because the current offer is not capable of responding to high demand.
Mendiluce Anticipa has pointed at the lack of existing land available for construction. Spain has achieved a point of maturity and we no longer wait consumer activity to drastically increase, but the numbers of new developments will slightly rise, somewhat around the 80, new dwellings.
This current period is characterised by a protagonist who was not that active earlier: the customer. The client will start to strongly influence innovation and sustainability, which various developers are already working on, specifically in covering even more the needs of the prospective proprietors.
The goal of the promoters is to propose green, up-to-date and smart homes fully adjusted to the requirements of the clients. The Spanish property market has fallen to a standstill situation, as the rest of the economy in most European countries, although it is expected to resume activity during , as the coronavirus crisis follows its natural course. The recovery will be due to domestic demand by Spanish nationals and the holiday property market by European citizens.
This could be one of the extraordinary measures that are now being implemented by the Spanish Government, to prevent that all new housing promotions suffer the consequences of a long term crisis.
VAT is applied to the property so the reduction would benefit all buyers, regarding their nationality. The foreign holiday property market might be subject to high and low fluctuations as the crisis progresses during this year, once the movement restrictions are lifted.
Real Estate Agents are finding new innovative ways to keep customers interested and be ready to attract three types of customers, in an ideal scenario of a sudden rush in the property market:. Assuming that interest rates remain low for the time being and there is a lack of alternatives to make a return, the flow of money that goes towards the property market will remain high. This will ensure stabilization of Spanish house prices in A good indicator of the evolution of the property market in Spain can be seen in the data showing the price per square meter.
This data can be used to forecast and predict the path of the Spanish housing market. As the graph below shows, the growth continues steadily into Our Properties in Spain. According to the European Commission, the growth prediction for the Spanish economy in is 1. The unresolved political issues to be dealt with by a fragmented Parliament and the demands in Catalonia and the coronavirus Covid situation are factors that might influence the already weak global economy, in Europe and the rest of the world.
The construction sector in Spain seems to be moving once again. The supply of housing is still growing faster than the demand. This mainly applies to existing construction. There is much more housing supply on the market than the market can handle. The demand is growing slightly, but the supply is growing much faster. That is because, during the Spanish property crisis, sellers have been holding on for years, waiting for better times to sell their property. I think will give some of them quite a shock.
Already, there are rumours circulating of developers delaying the launch of new phases as sales slow. Lack of well-priced, top quality properties in prime locations is also a feature of the current resale market. However, available stock is more in balance with demand. In my experience they are much more likely to walk away than overpay. Look hard and there are still good deals available.
However, I have a problem with many asking prices. I feel sellers assume that just because new-build prices have gone through the roof they can ramp up their asking prices to similar levels. That assumption is incorrect in my view. As I started a search for a client at the beginning of I noticed that every house under consideration had been reduced from the original asking price.
When over-optimistic sellers reduce asking prices to more in line with what the market can stand, they sell. And in price per square metre terms that will be way below new-builds prices. Marbella, the sixth most expensive town in Spain, is a good example of the new-build versus resale price conundrum. At the start of a client was negotiating to buy a detached villa.
With 5 bedrooms, m from the beach, walking distance to town, and with the contemporary look that is so in demand. Also at the beginning of I located a 2 bedroom townhouse, fully renovated to the highest of standards. However, it too had reduced from the original asking price before a buyer emerged For the same clients, I have just added a beachfront apartment to the short list.
When I am researching the market for my clients I always do the price per square metre calculation to help me come to a conclusion about the asking price.
I told him it was a bit late for that, the time for price comparisons was in , not The fact is, shiny new stuff never trumps location. Seems the developer has licence problems. However, buyers are already paying more than that per square metre just to get their hands on a new property.
However, in my view that will be because new-build prices retreat, not because resale prices increase markedly. There is a close link between rental yields in Spain and the health of the Spanish tourism sector. Currently, Spain is the second most visited country in the world. Obviously, some will have their own homes, or stay with family and friends, but that leaves a serious number of overseas visitors renting privately.
As a result, rental yields make letting a property in Spain an interesting option. There is high demand for both long and short term rentals. What used to be considered luxury items, such as free wifi, flat screen t. There is just as much demand for smart two bedroom apartments in the right location. I thought property price rises would squeeze yields. In all cases, location and interior finishes are key. It seems likely that demand for short-term holiday rentals is only going to increase.
In , just before the global meltdown, Spain welcomed 59m overseas visitors, an all-time record. At the end of the annual total had fallen to However, a decade later, the statistics show the 83m barrier broken for the first time. In fact, at There are also signs that improved marketing to pitch Spain as a year-round destination is paying off. In the three winter months, January through March, showed the biggest monthly increases while the three summer months were either flat or decreased slightly.
This indicates there is improving rental potential throughout the year and not just in the traditional high season summer months. Analysis of the tourism statistics indicates that the decline of foreign tourists in high season was the result of the recovery in cheaper package-holiday destinations such as Tunisia, Morocco and Egypt rather than fewer high-end tourists. And the very high demand for the most expensive rental properties seems to bear this out. The most important thing, in my view, is that there are no losses at the top of the market.
It is vital that the quality sector continues to grow. When I am working for a client whose brief requires reliable rental income I target certain areas and ignore others. In addition, I search for a type of property and reject others. Get the location wrong, even by just a few kilometres and income may be halved. As well as pinpointing the right location in a particular area you need to be in the right region because some have legislated against short term holiday lettings, pressured by the powerful hotel lobby and disgruntled locals.
So, if rental income is a requirement of your buying plan then check the legislation in that autonomous region because there are differences. But the days of leaving a set of keys at the local bar and crossing fingers that no emergencies will arise are over. My blog here explains more. Obviously, the principle reason for this is that Spanish banks were drowning in bad debts and new mortgages were scarce.
Only a massive bail-out from the European Central Bank prevented widespread collapse. One of the first questions I ask potential clients is whether they they are cash buyers or if they need finance. I do this because I believe it is better to get an indication of borrowing potential before I start a property search.
When the answer comes back that they are cash buyers I always ask if they are aware of the fixed rate mortgages currently available in Spain. Most are not. However, once they knew all my recent clients who had intended to buy with cash have opted to take the maximum they could borrow.
Euribor is the interest rate which fixes most Spanish mortgages and it has been in negative territory since February After falling month on month throughout it closed the year slightly up from the historic low of It now stands at In the recession fixed rate mortgages disappeared from the market.
Indeed, the majority of international buyers are opting for fixed rate over variable rate loans. My advice to cash buyers, irrespective of the currency, is to protect their capital and take a Spanish mortgage. There are many products to chose from with fixed terms from 5 — 25 years, interest rates from 2. There are a lot of variables, such as country of residency, amount required, location of purchase.
However, there are no restrictions on nationality or purchase price. A good broker is essential. Status is scrutinised very carefully but in general the process is straightforward and quick.
In the case of some of my clients we have even had banks competing for the business. It noted that Spanish banks are highly exposed to real estate sector developments and may underestimate the speed at which house prices and relaxed lending criteria can gain traction.
Also in December , I noted warnings from valuers about the spectre of overvaluations creeping back into the market. The loan is then offered on whichever is lower, the valuation or the property price. They may be only a warning flag but they may also be the first signs of something more serious. Even more reason then for buyers to be very cautious, particularly in the new-build market.
It is essential to do the research and compare asking prices for new property with comparables in the resale sector. Look at peak prices prior to the crash and ask yourself if you should be paying even more than that now. Lots of soft focus life-style images, very seductive, but better to check the price per square metre and ask if it makes sense.
However, if you buy at the right price, Spanish property is still relatively affordable. The sun continues to shine and the quality of life is rated one of the best in the world. The lack of high-quality inventory at the right price in prime locations will be an issue throughout As far as the overseas market is concerned that means the Mediterranean coasts, the Balearics and the Canaries. My advice to buyers in is do not obsess about new-builds, especially if not located in prime positions.
Many are not. Consider equivalent resales, calculate the price per sq. Then you can take an informed view on what makes the best financial sense. The result will almost certainly be a lower price, a bigger property and, most important of all, a superior location.
A thorough search can still uncover some real deals although they will be harder to find in Nevertheless, there will always be some sellers more motivated and realistic than others. If there is a mobile mast in view assume there will be more as the tendency is for them multiply. Electricity pylons are also a big no-no. We can assume new housing will increase in the medium term.
Already, in some areas I can count twenty cranes while standing still.