Fresh moves are being made to help increase transparency in Spain’s second-home market which is sure to appeal to those investing in this sector.
The new plan to help make the Spanish second-home market more transparent through better business intelligence has been described as “a step in the right direction” by Spanish Property Insight’s Mark Stucklin who is involved in the initiative.
He points out that one of the biggest weaknesses of the Spanish housing market is the lack of data on foreign demand, which represents more than 13% of the market.
“When it comes to selling homes in Spain to foreign buyers, market research and sales data are hard to come by, so the industry is flying blind,” said Stucklin.
He added: “For example, if you follow the market closely, you may have noticed that every quarter the Government publishes official statistics claiming the vast majority of foreigners buying property in Spain are also resident here, when in reality the opposite is true – most foreigners buying property here an non-residents buying second homes. The Spanish press faithfully reports this fiction without question.”
Stucklin insists that confusing data is bad for the market because at a basic level it deters investors, and makes it riskier to get involved in the sector. Good market intelligence, on the other hand, reduces uncertainty, makes the market more efficient, and benefits everyone, including foreign buyers, who are offered homes and services better suited to their needs.
The lack of market intelligence also played a role in the mistakes of the boom, according to the Spanish property expert. With no real idea of the true scale of the market, developers wildly over-estimate foreign demand and build too much on the coast. As a consequence, the Spanish coast was overdeveloped in many areas.
He continued: “The Spanish Land and Business Registrars Association has data on foreign demand, it just isn’t readily accessible. Their data needs to be analysed with expertise and turned into market reports to make it useful. This is why the Second-Home & Resort Industry Observatory (SHARIO), of which I am a director of, has signed a collaboration agreement with the Registrars Association to add value to their data and make it more useful to the industry.
“Under the agreement, the Registrars Association will provide SHARIO with quarterly figures on home sales to foreign buyers for expert analysis in market reports for the second-home & resort industry in Spain. At the very least we will be making better use of data that already exists, and the industry will have a better idea of the scope of foreign demand.”
Foreign demand for property in Spain reached a record of 13.18% of the Spanish housing market in 2015, with close to 46,000 sales, according to data from the Registrars. Growing foreign demand between 2010 and 2014 helped to mitigate the Spanish real estate crisis, and foreign buyers have played a key role in Spain’s recent housing market recovery.