We think 2016 is going to be a very interesting year for the Spanish property market. The recovery is now well underway and gaining momentum, unemployment continues to fall and the economy is set to be the fastest growing of the “Big Four” euro economies over the next two years, according to the International Monetary Fund.
A story about saving money and trouble when leaving or receiving an inheritance in Spain
Mr. Rainyday and Mr. Blueskies were catching up over a beer in Barcelona on a sunny Friday morning. Mr. Rainyday had barely taken a sip of his beer before he was on his pet topic — complaining about Spain, his and Mr. Blueskies’ adopted home as of a few years ago.
‘This time it’s dad’s flat in Andalucía. It’s over a year and a half since his funeral, and I’ve only just got it transferred to my name. Plus, it’s cost me a fortune. There’s no way it’d be such a hassle back home. It’s a total scam!’
We’re ending 2015 on an upbeat note with the news that sales of Spanish homes to both overseas and local buyers have risen significantly compared to 2014. Latest figures from both Lucas Fox’s in-house data and Colegio de Registradores www.registradores.org show a substantial increase in the number of transactions to Spanish and foreign investors, particularly by the British.
The Spanish economy is also at its healthiest for several years, growing at 3.4% from July to September 2014, the fastest annual rate since 2008.
British buyers on the rise
Our sales data – which primarily focuses on high end properties – indicate that the number of transactions by British buyers increased by a massive 26% across all our regions over the last 12 months, with Barcelona, Ibiza and the Costa Brava the areas most in demand.
Figures also show that the average purchase price by British buyers went down from 998,000 Euros in November 2014 to 847,000 Euros in November 2015 – a period when property prices were stabilizing.
New properties and high quality refurbished homes seem to be currently in most demand, with new developments in prime areas selling off-plan very fast and, in most cases, close to asking price.
Local demand also on the rise
Significantly, local demand is also on the rise. Sales at Lucas Fox to national buyers went up by 50% from November 2014 to November 2015. Our latest market reports http://www.lucasfox.com/updfiles/publications/market-reports-q1-q2-2015.pdf also show that prices in Spain’s three key cities – Madrid, Barcelona and Valencia – are now slowly beginning to increase.
In all of these locations the improving market conditions are being driven by increasing levels of confidence amongst national buyers, something that is crucial for the market’s long term recovery. In almost all our markets, this renewed confidence, a strong economy and the Spanish banks’ willingness to offer competitive mortgages has brought new investors into the market and we are now seeing international buyers competing against local buyers to secure the best properties in the most desirable locations
Spanish mortgage rates close to zero
Recent Q3 data from the Spanish Property Registrars also indicate a rise in sales by national buyers – up by 16% to more than 80 thousand compared to the same period last year. It also showed that foreign sales were up by 20% to 12,535 during this 3-month period. Significantly, sales of homes to UK buyers more than doubled – up by 53% in the third quarter of 2015 over the same period in 2014, thanks to a unique combination of factors:
The last time the pound was above at 1.4 euros was in 2007 and it has been consistently so during 2015. According to Euribor, mortgage interest rates in Spain fell close to zero in November, representing yet another historic low. Euribor (the rate used to calculate most mortgage repayments in across Spain) fell month-on-month by 38% in November to 0.079 and by 76% year-on-year. Like house prices, mortgage rates have declined over the years and are now hovering far below their 2008 peak of 5.393%.
Our partners at Mortgage Direct mortgagedirectsl.com think that we are in for a prolonged period of low rates in the Eurozone. The economic climate is still very poor in many of the countries that make up the zone. They believe we may see small increments in the rate, once rates increase in other countries, such as the UK and the USA, but the circumstances are very different in the Eurozone and even in the UK and USA they are talking about prolonged periods of low rates.
Property registrars also showed that prices across Spain increased by 6.6% year on year in the third quarter of 2015 and 2.2% quarter on quarter, but compared to prices in other major European property investment hotspots, Spain continues to remain an extremely attractive option.
Roll on 2016!
Carrie Frais is Head of Marketing & PR at Lucas Fox
The modern age could be said to be defined by connectivity: social media has made a multitude of interactions commonplace, Wi-Fi in public places is becoming increasingly the norm, Google is now the go-to for providing the answer to any debate. And this connectedness is now extending its reach to the modern day home.
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Over the past decade, the landscape of the overseas property market has changed vastly. Property entrepreneur and Founding Director of Ideal Homes Portugal and Ideal Homes International Chris White has been selling property through the good times and the bad. After a turbulent 10 years, he believes the overseas property market has finally reset itself – and that now is the time to look to the future.
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After a hugely successful 2015 UK tour, the Overseas Property Show is set to draw to a close with a bumper show in Birmingham on 28 and 29 November. The free to attend show will be held at the Ramada Birmingham Sutton Coldfield Hotel, presenting local residents with the opportunity to explore their dream of home ownership overseas.
The market in the Canaries is looking very positive right now, with almost every indicator showing an upward bounce since the middle of 2015.
Commenting on this data, Martin Dell, Director of Kyero, said, ‘We have already seen some talk of another bubble, I’d only add that market activity is still 58% below its peak in 2006 and we have a long way to go before hitting those levels. 2015 looks more like the very early stages of a recovery, mostly driven by international buyers.’
Visitors to Kyero.com searching for property in the Canary Islands have increased by 36% in Q1 – Q3 2015, compared to the same period in 2014.