Demand from international buyers will remain fundamental necessity to help the Spanish property market continue its recovery and it remains to be seen if Brexit results in a fall in British interest.
Overall experts point out that 2016 was a positive year for the real estate market with prices having bottomed out the year before and modest price rises seen in some locations.
It is likely that locations with lower prices could become more in demand in 2017 as buyers still want a bargain and there is likely to be some uncertainty around the UK formally beginning the process of leaving the European Union and elections in France and Germany.
New homes are expected to be built in Valencia in 2017, signalling that developers think the demand will be there, according to Juan Luis Herrero, a partner with Lucas Fox in the region.
‘Regarding re-sale properties, we forecast a continued upward swing, especially now that the uncertain political situation which prevailed during 2016 has come to an end. The return of mortgage credit and low interest rates will continue to fuel this trend,’ he said.
He also expects to see an increase in buyers from the United States but thinks second home buyers from the UK will hold off until there are firm indications of what deals will be done once the UK begins the formal process of leaving the EU which should start with the triggering of Article 50 before the end of March 2017 and the impact this might have on Sterling.
Richard Speigal, head of research at Spanish property portal Kyero, pointed out that house sales in Spain have recorded a 15% rise on the previous year and seen 10 consecutive quarters of growth, which means that the Spanish property market crash has officially ended.
‘Spain’s market has two unusual advantages. Firstly, it had nowhere to go but up. The 2008 crisis completely shredded the housing market. Secondly, Spain has incredible international appeal and with one in five property sales going to foreigners, it can endure weak local demand,’ he said.
‘British, French, German, Dutch, Belgian, Italian and Swedish buyers are picking up the slack, which has been good news for the wider market and for those involved in selling property in Spain,’ he explained.
He believes that there is still pent up demand from potential British buyers, citing figures that show that overseas searches for Spanish property via Kyero reached all-time highs after the referendum vote in June, up over 50% on 2015. The portal’s largest agents also reported seeing record attendance at UK investor shows.
He predicts that older British home owners with no mortgages on their properties and looking for a holiday home will be tempted to buy in Spain in 2017 and beyond. ‘In short, British buyers age 50 plus who love Spain are sitting on huge equity piles and Brexit didn’t diminish their wealth and as a group, British buyers are getting richer,’ said Speigal.
His top tips for 2017 include Almeria where traditional charm attracts overseas buyers. In the third quarter of 2016 sales were up year on year by 93% and with an average price of €129,000 properties are seen as good value, almost half the cost of the national average on the portal.
Prices are also lower on average in Alicante where international buyers have more property than any other province in Spain. While this could make it susceptible to shocks, Speigal says it’s strengths are hard to beat including fabulous beaches, steady sales growth and prices up to 15% below average.
Posted on March 5th, 2017