It is known that the Spanish property market has been under pressure for some time now, and there have been concerns that Spanish banks have struggled to sell on properties they inherited when their customers defaulted. However, the situation started to change towards the end of 2016, and it looks like 2017 is continuing to do the same. Recent figures from the Land Registry show that sales are up by 19% in the year to January 2017, which is a significant change.
While the number of sales was up by 19%, it was statistically the largest figure since January 2013. Experts think that in 2011 and 2013 figures were inflated due to government adjustments.
One issue which is brought up time and time again is Brexit. This wasn’t just seen as a threat to Britain, but Europe as well. It has become obvious that the Spanish property market has been slightly affected by this, and housing market data shows that expats are holding back on their investments due to Brexit and the effective devaluation of the pound. However, domestic and foreign investors are not deterred by Brexit in any way.
The 2016 foreign investment figures for the Spanish housing market show that United Kingdom buyers are still in first place at 11%, with the Middle East at 8%, Scandinavia 7%, France 6% and the USA 5%.
Investment from Middle Eastern, American and Scandinavian investors has increased from the 2015 figures, but as well as the UK there has been a decrease in French investment. We are interested to see how 2017 pans out especially since the UK government triggered Article 50 in March.
There were some very impressive sales increases in a number of regions of Spain, with the Balearics up 40%, Cantabria up 40%, Barcelona displaying a rise of 36%, Tarragona/Costa Dorada up 35% and Costa Brava up 28%. Costa de la Luz and the Canaries were two of the few sufferers with figures down by 2%. Overall, it would seem that demand for Spanish property is starting to pick up and foreign investors are returning, especially now there is less uncertainty regarding Brexit proceedings.
Resales and new homes
The headline figures certainly make for good reading for the Spanish housing market, and it was also interesting to see that, while resales were up 21%, there was also a rise of 8% in the new home sales. This is an area of the market which fell dramatically due to the 2008 worldwide economic downturn with many developers struggling to survive, let alone complete developments and move towards new ones. Fortunately, demand for new homes has increased, and this should at some point inject a little more confidence into the housing development sector.
The Spanish economy continues to improve, political instability is not a major issue at the moment, and fortunately, foreign investors are now looking at the Spanish housing market again. There are some obvious hurdles for the European market in light of Brexit and economic challenges, but there is light at the end of the tunnel. We can only hope that the rest of 2017 continues along the same vein as the last few months, although the loss of some UK investors due to Brexit and currency issues is a blow.
Because Spain’s property market is making a return, now would be the perfect time to invest, especially in places like Marbella, where property and holiday rentals are always in demand. Here at Prestige Property, we can help you find your dream property, and we believe that because of the growing economy, low financing costs, good potential for rental returns and capital appreciation, now would be the right time to find your perfect Marbella property for sale.
Image credit: Hernán Piñera under Creative Commons