market in Spain. Prices of Property in Spain actually sold. Housing Price Index (HPI); Properties purchased in Spain, according with the Spanish notaries. A recent report from the Bank of Spain suggests the domestic housing market to get it to the same level, sold for the equivalent of €2, in December In the coming quarters the housing market faces a drop in sales, mortgage signing, House prices will drop in Spain in response to the urgent need to sell.
In addition, all autonomous regions registered price increases at some point during , although there were fluctuations. However, the fact is that, in spite of minor improvements, not that much changed in And the signs are that is unlikely to be any different.
Yes, unemployment is down. Nevertheless, at Overall, Spain has five of the ten worst unemployment black spots in the EU. Source: Eurostat. In fact, one third of the under 30s age group in Spain has never had a job. Meanwhile, in Germany the unemployment rate for the same demographic is an average 6. Yes, , new jobs in a year is impressive. However, seasonal, temporary and part-time contracts still outnumber permanent ones by a big margin.
For example, of the One of the reasons for these figures is that tourism is currently the biggest source of employment in Spain in , with Unfortunately, jobs in tourism tend to be low-skilled, low paid, temporary and seasonal. While noting improvements in the economy since the previous report in it highlighted persistent structural problems hindering sustained recovery.
It seems not much has changed. They were the same issues mentioned in the report, above all the dire unemployment figures. The reality is that Spain has never been close to full employment even for adults. Between and the average youth unemployment rate was Even in at the height of the boom it was Source: Eurostat So, in spite of several boom periods in that timeline, Spain has made little progress in improving job prospects for young people. Inevitably, such insecurity spills over into the housing market.
A recent report from the Bank of Spain suggests the domestic housing market will remain relatively weak for years to come. Instead, Spaniards have actually returned to income levels of the year And even worse, the wages of low-skilled youths have retreated further, to late levels.
Now, at age 30, they earn less than year-olds did 10 years, ago and almost the same as year-olds earned 20 years ago. In effect, two decades of purchasing power have been lost. In addition, there has been a similar regression regarding the salaries of skilled workers.
Source: Bank of Spain. And the signs have been there for a while. And it would have been even worse but for the fact that many buyers were already locked into off-plan purchases made before the crash.
But the decline hit bottom in the second half of as foreign bargain hunters emerged. And the number of overseas buyers has increased every year since. Meanwhile, the domestic property market was still falling in When the first upturn was registered in , it was fully four years behind the overseas sector.
Life expectancy rose by ten years between and At 80yrs for men and 85yrs for women Spaniards have the highest life expectancy in the EU and third worldwide. Only Japan and Switzerland do better although only by a few months. The climate suits all tastes. It ranges from four seasons with a proper winter and lots of snow in the north to the sub-tropical south. In fact, Spain has occupied the top spot ever the scheme began in This puts it in third place globally, behind Italy 54 and China Living well is affordable with food and drink prices below the E.
Spanish cuisine is world-class. Spain has three restaurants listed in the top ten restaurants in the world, more than any other country. Sports and outdoor enthusiasts are spoilt for choice. I said in the introduction to this report that, in spite of lots more good news, the market is still patchy. Remember that these statistics only cover the first half of but I expect the full year figures will confirm the results so far.
Cantabria welcomed just buyers from overseas in this period while Extremadura was the lowest with Then ask where the majority of those overseas purchasers buy for the explanation. And the same patchy recovery pattern occurs within regions as well. And the same holds true for other regions as well. However, in the introduction to this report I highlighted the fall in the number of overseas buyers in the first half of Unscrambling the statistics shows 51, foreign nationals bought a property in Spain, compared with 53, in the same period in , On the other hand, when the first half of is compared with the second half of , the foreign buyer total actually rose by 2.
The decline in the Balearics is a bit more puzzling. One reason might be high prices. Also, Mallorca, the main market of the Balearics, has introduced very restrictive tourist rental laws and these may be responsible for the fall in overseas buyers. Although not buy-to-let investors as such, many overseas buyers are keen to cover running costs via rentals when not in residence. In spite of so much negativity on the part of many commentators and market analysts, almost willing the British market to collapse to back-up their argument, it is proving remarkably resilient.
The Germans were in 3rd place with 3, In market share terms the British made up However, these top 3 players all registered falls compared to the same period in There were In fact, there were only two groups from EU countries that increased, Ireland up 1. Nevertheless, some nationalities showed strong growth but they were all non-EU citizens. Argentinians and Ecuadorians rose Buyers from the US rose Although there were fewer buyers from overseas spending per square metre was up in the most numerous nationalities.
The Norwegians went mad and increased average spend per square metre by Only the Irish, Italians and Danes spent less than the same period in But the real big spenders in were from the US. So, is the overseas market in Spain slowing down? Is demand falling? Is the supply side getting too big? Have prices risen too fast? Lots of questions and several answers, I think.
In the case of the British, I think currency weakness is partly to blame. If sterling strengthens throughout I think British buyer numbers will increase once again. However, I think there are other factors at play in the overseas market.
In fact, I would go so far as to say that demand held up very well throughout , lots of people still wanting to buy a property in Spain. For reasons I have never quite understood, foreign buyers are like moths to a flame if new-build is available, even when the location is inferior.
The fact is there is very little raw building land available in the very best locations, it was built on years ago. Consequently, it follows that much of the new-build activity is not in prime locations.
However, since the recovery started the supply side of new apartments and houses lagged way behind demand. Inevitably, this imbalance skewed new-build prices, to an extent I believe was unsustainable. New may be nice but is it worth paying double, or even more, per square metre than a resale?
However, as more new-build projects come on stream, and the signs are that the pace is picking up, I think new-build prices will come under pressure. I predict buyers who purchased in early phases of some new developments will find their property is worth less than they paid by the time they get the keys.
In fact I think some buyers are paying such inflated prices for new build properties that they may never see a return on their investment no matter how long they hold it. At the height of the building frenzy in Spain approved building licences for , units. This figure was more than the UK, France and Germany combined. In reality, the construction industry was more or less wiped out. Nevertheless, building licence approvals have grown year-on-year since The final total will be published in Spring Meanwhile, although Q1 and Q2 figures indicated a slowdown numbers picked up again heading into Q4.
With two months still to count in , 91, permits had been authorised across Spain. However, the biggest increases in new permits are in the Mediterranean coastal regions, precisely those locations favoured by overseas buyers.
So the cranes are not spread evenly across Spain but are clustered in just a few regions and in just a few places within those regions. The same regional imbalances I highlighted earlier with regard to transaction numbers is duplicated in the construction sector. As the supply side improves one would expect prices rises to moderate even if demand holds steady. On the other hand, if demand is actually falling, then new-build prices will be under serious pressure.
One thing for sure, no developer goes into a project expecting prices to fall during construction. The assumption is always that prices will rise phase by phase. 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.
Since , when package holidays were first available on the island, it has been a well liked holiday destination. Many return for holidays each year and so have invested in property in Majorca. Buying a property in Majorca will always be a good investment as property in the Balearics remains highly rentable. Apartments in Majorca and villas in Majorca will rent to both families and young holidaymakers when you are not using the Majorca property yourself and be a fantastic retreat when you do want to get away.
Though it has a reputation for being a party island, Ibiza also has a quieter side and attracts families and couples to its white sands and clear waters, away from the revellers and busy club resorts. And property in Ibiza is some of the loveliest property in the Balearics.
Apartments in Ibiza and villas in Ibiza are rentable throughout the year thanks to the islands days of sunshine; so purchasing property in Ibiza whether for investment purposes or personal use will guarantee you returns on your Ibiza property. The charm of Spain's village homes. Is your ideal Spanish home a traditional house packed with local character and set in an authentic village community?
Here is a list of things that make this type of property, known as a 'casa de pueblo' so desirable, and some examples for you to choose from Could you fall for a home with autumn views?
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