UK BUYERS 2016 ARE STILL VERY INTERESTED IN THE SPANISH MARKET
THE latest figures show that demand for a home in the sun in Spain by foreign buyers continues to rise year on year.
So far this year, Spain is enjoying a fantastic tourism season breaking numbers on the same time last year.
As September gets under way and into the residential property market high season, it’s a good time to take a quick look at what is happening.
The first two quarters residential property figures are now out and, similar to tourism figures, residential property sales continue to increase. Residential property sales are up around 23- 24 per cent on the same period last year and new home sales are also stronger than 2015.
In the first two quarters of 2016, foreign buyers represent approximately 14 per cent of all residential property sales in Spain but in popular locations such as the Costa’s and Mallorca the foreign buyers tend to dominate the local residential property sales market.
You’ve probably noticed the rapid increase in new real estate agencies over the past three years. The trend is set to continue, especially as big brand real estate agents open up more and more franchised offices, to capture home sales in a growing market.
There is also good news for house prices as in the first two quarters residential property prices continued to rise, good news for investors looking for capital appreciation.
What hasn’t changed much is the market share of residential homes purchases per foreign nationality.
The British continue to hold on to the number one spot at 20 per cent, right up to the Brexit, with the Germans at 8 per cent then the French and Swedish at 7 per cent.
It will be interesting to see the residential property sales figures at the end of the year but it looks a safe bet that 2016 residential property sales will top 2015.
PROPERTY pundits have been concerned that sales of newly built Spanish homes appear to be low, contradicting the notion that a solid recovery is in full swing. In fact all the evidence shows the new developments from Madrid to Alicante, and from Marbella to Mallorca are selling very well.
So why isn’t this translating into official figures? The reason is that home sales won’t be entered into the property register until they are fully built and have habitation certificates, meaning we can take these seemingly low sales figures with a pinch of salt.
On to the wider sales market, which includes second-hand homes, and the latest figures from the National Institute of Statistics show strong growth across key regions including the Costa Blanca, Costa del Sol, Murcia, Balearic Islands, and the cosmopolitan centres of Madrid and Barcelona.
The news comes amid revelations that, for the first time in aeons, regular Spaniards are actually better off buying rather than renting a home. At present the typical Spanish mortgage repayment is between €350 and €400 per month for a €100,000 loan, while people renting a property that would fit this mortgage model would expect to pay around €500 each month in rent.
While this is the way it usually was before the crisis, the figures mark the crossing of a significant threshold, one which could lead to an energised boon in sales over the coming months and years as many people realise it’s in their best interests to buy.
COASTAL areas continue to lead the way in solidifying Spain’s property recovery and taking the industry to new heights, on a far more stable footing than seen during the boom years of the early millennium.
A simple scan of the high street horizon and the abundance of successful real estate agents is sufficient to tell that the market is back in full swing and enjoying a healthy boom worth capitalising on.
New figures from the School of Property Registrars indicate that the Mediterranean coastline is the burning engine behind Spain’s total growth in property sales, with places such as Alicante coming third behind Barcelona and Madrid, despite having but a fraction of the population.
Narrowed down to take account of population density, property sales are at their highest in Malaga province, which includes the Costa del Sol, followed by Alicante. Other coastal and expat hotspots along the Valencian coast from Calpe to Murcia also fare fantastically on the sales table, leading to heady optimism among analysts and estate agents.
Foreign investors make up a significant percentage of coastal sales, accounting for roughly half of all transactions, with the vast majority resale homes rather than new builds.
Across Spain home sales rose by almost 25 per cent in the second quarter of the year compared to 2015’s figures as the market continues its remarkable recovery.
HOME sales across Spain rose by almost 20 per cent in June, heralding a hugely significant increase, which led to the greatest number of private property transactions since January 2013.
There were 36,856 sales across the period, which became the fifth consecutive month to see year-on-year increases.
Second-hand homes drove the surge, accounting for more than 30,000 of the sales, while coastal locations played a considerable role in the improvement.
The Balearic Islands, Valencia and the Canary Islands were the provinces registering the greatest number of sales per 100,000 residents, while Andalucia clocked up the most in volume at 7,496.
The data, published last week by the National Statistics Institute, comes at a time when Spanish real-estate is enjoying a steady and serious recovery, as yet incomparable to the voracious pre-crisis figures, but far more stable and enjoying a firm degree of investor confidence.
Indeed Spain is now considered the ninth most popular destination for international investors in the real-estate, construction and property markets, while the legions of private foreign buyers continue to grow.
With all the key markers seeing solid results, consistently improving across recent years and months, confidence has also returned to the street as local residents and younger professionals move away from renting and towards home ownership.
The good news is coupled with an optimistic forecast from famous holiday-home builder Taylor Wimpey who expects ‘good progress’ in the sector throughout 2016. Their statistics show a startling 20.4 per cent jump in the average selling price of a Taylor Wimpey built home, from €284,000 in 2015 to €342,000 this year.
The willingness of international buyers to pay a premium price is especially indicative of enhanced consumer confidence, particularly among foreign residents, a key mainstay of the Spanish property scene.