Warm summer winds over the Spanish property market

The Spanish notaries have published figures for home sales in 2015. They concluded one thing: The Spanish property market is in really good health.

It is no news that the Spanish housing market got into major troubles at the end of 2008. It took a few years before the first rays of sun really shone into the market. The new building started up slowly on the Costa Blanca South in 2010. Many were skeptical when they saw the construction cranes on the horizon again. Skeptics, however, proved to be wrong, as the housing market has not looked back since then. You may well say that increases in today’s market in home sales and prices start from a cheap basis (compared to the crisis). However, if take today’s numbers and keep them up to the figures before the crisis occurred, you will discover that the numbers are very strong.

The numbers peaked in the second quarter of 2006 with 36,000 home sales in Spain by foreigners. Today the figures for fourth quarter of 2015 are 20,000. Between 2011 and 2013 the figures remained around 10,000 per quarter, but they are increasing from 2014 up to today.

During the crisis, the coastal areas were first affected. It is also the foreign buyers who have taken the lead after the crisis. Especially the Brits buy many properties in Spain. In 2015, the number of home sales in Spain by Brits increased with 27%, while they fell by 68% among Russians and 25% among Norwegians. Both among Russians and Norwegians who have had a tradition of buying homes in the high end of the market, this tendence should not be seen as the interest has fallen. In Russia, they are hit by sanctions in relation to transfer of money out of the country as well as a lower oil price. The low oil prices have also hit the Norwegians, whose currency has taken a substantial plunge in value against the euro.

Spain’s largest residential appraisal firm has in 2015 published a report where property price developments have seen a decline of close to 40% after the crisis. This figure is now around 20% lower than before the crisis and is rising.

Another interesting aspect is the question of where foreign buyers purchase their homes. For many years there has been a general understanding among Danes that if you buy a property in Spain, it should be on the Costa del Sol in Andalucia. When looking at the number of property deals with foreigners, you will see that the rest of Europe do not agree on that. In Valencia region, where the Costa Blanca is, there are 34% more home sales to foreigners. The average M2 price in Andalusia lies at € 1,545 while in the Valencia region it lies at € 1,270.

Contact Mediter Real Estate for further information regarding above numbers or questions about our exciting properties in Spain.