Spanish Property Prices Continue to Rise

Spanish Property Prices Continue to Rise

Spanish Property Prices Continue to Rise

Spain’s property market is continuing the recovery started mid-2014, as the uptick in prices consolidates and foreign buyers return to the scene.

Resales seem to be the flavour of the month, according to data from the Property Registrar’s Association for the first quarter of 2015.

Prices rose 2.65 percent in January-March from a year earlier, with residential home sales increasing 9.05 percent to 90,534 transactions.

The resale market, where quarter-on-quarter prices were up 1.88 percent, accounted for over two-thirds of these operations.

While property prices are still around 30 percent lower than their 2007 peak, the figures for the first quarter are the highest for the last eight years, the PRA report said.

 

THE ALLURE OF SPAIN’S COSTA

So what’s behind  this revival in Spanish real estate, much of which was considered a toxic investment as little as four years ago as the country struggled to weather a deep economic downturn?

There are two key factors:
• The weak euro is luring British buyers back to Spain. Pensioners in particular are benefitting from the strong pound.
• The rise in the number of mortgages being granted is also rekindling demand for housing across the country.

House prices have risen in the country’s coastal areas since the beginning of this year, underpinned by the revival in the tourism industry.

The Spanish costa has long been a favourite destination for British tourists and there is still a large stock of property available on the coast, much of which is being off-loaded by Spanish banks at attractive prices.

The Balearic Islands, with the highest foreign resident population in Spain at around 20 percent, is experiencing the fastest and highest price rises in the country. Northern European buyers in particular are snapping up good deals in Mallorca and Ibiza.

 

URBAN HOUSE PRICES ALSO RISE

Urban house prices are also on the rise in Spain, as banks are now more willing to lend money after several years of an enforced credit crunch.

The fact that property prices are currently still low, so the amount of money required for a mortgage is less, has encouraged lenders. Furthermore, low interest rates mean the risk of debt in respect to potential buyers’ earnings has also improved.

International buyers have also been active in big cities, driving a recovery in the high-end residential market in Madrid and Barcelona.

So what’s the outlook for property prices? The Bank of Spain said end-April that “the process of price adjustment, in principle, has already bottomed out.”

Most market experts expect the rise in housing prices to continue, although it will be uneven across the country, depending on the level of supply to meet renewed demand for Spanish bricks and mortar!

For information on investment in Spain, contact corporate law firm Argali Abogados.

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