Spanish property prices continues to rise at a steady rate, if not quite at the speed of 2018. However, with some way to go still to recover the highs of 2008, the rises appear to be sustainable, backed by a strong economy and international demand.
Spanish property prices continue to rise across almost all measures (according to the SPI tracker) at between 3 and 8% country-wide. While they note that the rate of increase is slowing, the rises of a year ago, reaching over 10% according to some accounts, would have rapidly taken prices out of many buyers’ reach. The slowdown is therefore to be welcomed by today’s buyers.
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Data from Spain’s National Statistics Institute found the average Spanish property price was €151,000 in March 2019, rising by 6.8% in the year to March but slowing to 5.3% for the year to June. New properties were risen faster though, by over 10% to March.
The cities were leading the charge – especially in Madrid with prices up nearly 10%. Indeed as Savills note, “Property in Madrid is the most expensive in Spain, with an average price of €235,000, 56% more expensive than the national average.” Following that was the Balearic Islands with an average price of €230,000. San Sebastian doesn’t get many British buyers (although it’s popular with the French and Spanish second-home-buyers) but its property is third-most expensive in Spain, followed by Barcelona.
The most affordable property is to be found in the central southwest – Cáceres, Jaén and Ciudad Real – where prices are half the national average at around €75,000.
The number of properties bought in 2018 reached just under 600,000, rising for the sixth year in a row and the highest level since 2008. However, it is still nearly 40% lower than the almost one million properties that were being bought in 2006.
New-build vs resale
The greatest recent success has been the rise of new build property (aka off-plan). Before the global financial crisis nearly six in every ten properties bought were new. The crash, partly caused by huge speculation and oversupply of exactly such property, left many of these unsold and it has taken almost a decade to see any recovery in off-plan sales. They still account for just 10% of the market, according to Savills.
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In 2018 78,000 new property permits were issued, a rise of 23% on the previous year. To put that in context, in 2007 there were 750,000 issued but by 2014 it was down to 30,000. On the main overseas buyer areas, however, such as the Costa Blanca, they are likely to make up a much higher portion of the market than nationally.
Who is buying?
International buyers in Spain have doubled in the past five years, now acquiring over 100,000 (of the 600,000 homes bought) last year. Brexit hasn’t stopped the British from buying either. We comprise nearly 15% of all international buyers, almost double the next-largest group, the French with 7.9%.
Spain’s golden visa could be of interest to British buyers post-Brexit.
Spain’s golden visa – which allows people spending over €500,000 on a hoe to get a visa, has attracted plenty of people from Russia, China, Morocco and South America to buy, and could be of interest to British buyers post-Brexit too.
Reasons for further optimism
Property prices nationally are still 20.7% below the €190,000 reached in the Q4 2007. And the recent rises have bene based largely on Spain’s economic recovery. In 2019 the Spanish economy is continuing to expand by by 2.3%, much faster than France, the UK and Germany where growth is between 1 and 1.4%.
Moreover, for buyers on the coast, Spain’s tourist boom is continuing. In 2018 Spain welcomed 83 million international visitors, a significant rise from the 75 million in 2016.
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