Spain Property Sector Recovers Momentum

SPAIN PROPERTY SECTOR RECOVERS MOMENTUM

Spain Property Sector Recovers Momentum

Spain’s property market is recovering momentum as the economy returns to growth. Housing prices are widely believed to have bottomed out and the easing of restrictions on bank credit is encouraging sales.

Residential property prices rose 1.15 percent in the third quarter of 2014 from a year earlier, according to the Property Registrars index.

The trend in home sales was also favourable, with transactions increasing 1.4 percent to 79,561 in the third quarter from the second andnd there are undoubtedly some great bargains, ranging from prime city residential and commercial properties to coastal apartments and villas.

But is this uptick in the real estate market sustainable? Most market experts think so, not least because the average buyer’s profile has changed from speculative to more long-term.

 

PROPERTY INVESTOR PROFILE CHANGES

Housing prices in Spain have sunk around 40 percent from their 2007 peak when a decade-long real estate bubble burst, saddling the country’s banks with a pile of distressed property assets. Many of these properties have been sold off in the last two years by bad bank Sareb at heavily discounted prices. The main buyers were speculative investors like the so-called vulture funds.

However, top hedge fund managers like George Soros have made a more long term commitment to Spain’s property sector, while Chinese and Russian investors are also splashing cash around. Some are buying properties in cities like Madrid or Barcelona to rent out and are looking at investment yields of up to 9 percent. A good bet by any standards, particularly when compared with the miniscule interest rates on bank savings accounts.

 

TOURISM REVIVAL BOOSTS PROPERTY MARKET

The revival in Spain’s tourism industry, coupled with its excellent infrastructure, has also increased the allure of the real estate sector. And a surge of buying activity is expected from the UK this year fuelled by changes to pension regulations, enabling lump sums to be used for any purpose. Spain has always been a favourite destination for British tourists and with the value available in its property market currently outpacing that in the UK, it is likely to attract pensioners looking for a safe investment haven.

In a report on the Spanish property sector, BBVA said it forecasts a moderate recovery in 2015, based on data which shows a rise in demand due to an increase in employment and levels of consumer confidence. Economic improvements are also driving the recent rises in lending which is providing a further boost for the market,  the bank  said. For information on investment in Spain, contact corporate law firm Argali Abogados.

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