Property prices have plummeted in Spain since the financial crisis, but 2014 has seen the country enjoy a significant rebound, as an improving economy and soaring foreign demand have fuelled a market recovery.
Nonetheless, if the ECB and European Banking Authority’s worst case scenario projection comes true, prices may continue to fall by 8.1 per cent until 2016. The report was published alongside stress test results for Europe’s banks, suggesting a potential decrease in home values of 3.1 per cent this year and a further 5 per cent in the next two years.
Even in these theoretical conditions, though, Spain would still fare better than the overall continent, with Europe’s property prices overall falling 14 per cent by 2016.
Indeed, according to Eurostat’s official figures, house prices in Spain edged up 0.8 per cent in Q2 2014, one of the highest in Europe and the country’s first annual house price in six years. With the market appearing to flatten out and prices at attractive lows, investors are taking advantage of the bargains available on the market.
Recent data from the Ministry of Public Works shows that 91,338 homes were sold in the second quarter of 2014, up by more than 12 per cent from a year ago. 16.4 per cent of deals went to foreign buyers, according to the Ministry, the 12th quarter of rising overseas demand in a row.
Figures from the recent HiFX Property Hotspots Report confirm the interest that foreign buyers are currently taking in Spain. The latest report saw Spain tie in first place with France as the destination of choice for buyers, garnering some 35% of the vote. On TheMoveChannel.com, Spain’s enquiries jumped 46 per cent in the third quarter of 2014 compared to the previous three months, its highest level of demand this year so far.
Marc Pritchard, Sales and Marketing Director of Spanish homebuilder Taylor Wimpey España, comments: “Spanish property is some of the best value in Europe. Buyers from across the globe are taking an interest in what Spain can offer, both as an investment choice and for the lifestyle benefits. We’ve found that our buyers include a mixture of those looking for an escape pad for long weekends, those chasing the winter sun and then summering in their country of origin and those looking to move fulltime to Spain and settle here for the long term.
“The Balearics are proving particularly popular right now. They provide fantastic value and developments such as our Cala Magrana III resort, which offers easy access to both golfing and beaches, are being snapped up at an impressive pace. So much so that we only have a few apartments left there.”
While the influx of foreign property investors is good news for Spain’s economy, the situation for domestic buyers is also looking up. Deloitte’s fourth annual analysis of the Spanish housing market has shown that the average price of housing is now 4.4 times the individual gross salary. This compares with an EU average ratio of 6.1, rising to 7.9 in France and 8.5 in Britain.
Interestingly, many of the ‘domestic’ buyers benefitting from this situation are foreigners already living in Spain. According to data from the Ministry of Development, 89 per cent of foreign buyers in the second quarter of 2014 were already living in Spain.
“It is the perfect time to buy in Spain right now, whether for foreign property investors or domestic buyers,” adds Pritchard. “Property here offers some incredible bargains and it’s great to see the market beginning to pick up pace as the world wakes up to the excellent value for money that the Spanish residential property market currently affords.”
Source: The Movechannel