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Prices rise in Spain as market continues to bounce back

A Spanish real estate agency's half-year report shows that property prices and transactions have increased in the country's key cities and coastal locations.

Lucas Fox International Properties calculates that in the 12 months to June 2016 prices in Barcelona's Eixample district increased by around 10%.

Average prices across the whole city increased by 4%, while average rises of 6% and 8% were recorded in Madrid and Valencia respectively. 

In the year to June, Lucas Fox recorded a 40% increase in completed sales across all regions.

The average value of the firm's transactions increased by 5% during the same period.

The firm says that the sale of new homes has soared in Spain in the past year, accounting for more than 40% of its total sales.

"Thanks to increased planning approvals in Barcelona during 2016, our new development portfolio has grown significantly. It currently consists of more than 280 million Euros of property which will provide more than 300 homes within the next 18 months, and a further 1000 homes with the value of 650 million Euros planned for the next 3 years," explains Alexander Vaughan, Lucas Fox co-founder.

Lucas Fox's report sets out that demand among investors is on the rise thanks to attractive property prices – which are still 30-35% below the 2006 peak in some regions – and low interest rates.

"With tourism data set for yet another record-breaking year, we expect that Spain's second-home destinations will continue to attract demand for this kind of product from both foreign and national investors," adds Vaughan.

Overseas investors accounted for around 70% of the firm's total sales in the last year, down from 83% the previous year. 

UK buyers represented 10% of Lucas Fox sales with the rest of Europe (mainly France and Scandinavia) accounting for 30% of overall purchases.

The firm has recorded a significant rise in the proportion of buyers purchasing for investment – 28% in the first 6 months of 2016, compared to 17% in the same period in 2015.

The number of investors purchasing property to obtain a 'Golden Visa' has also doubled during this period.

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