Spanish property prices have been plummeting since the 2008 global financial crisis struck, but market conditions appear to be improving, according to a new report.
Sales of residential properties by real estate agency Lucas Fox International Properties increased by 33% during 2015, fresh figures show.
For much of the Noughties, Spain experienced strong economic prosperity and the housing market flourished, with Britons migrating to the country in their droves. But the Spanish property market has gone through a turbulent period in recent years, mirroring the state of the Spanish economy, with prices having plummeted nationwide due to the economic downturn and a chronic oversupply of properties caused by excessive housebuilding.
However, property sales to Spanish buyers were up by 86% year-on-year, according to the Lucas Fox’s latest market reports, a sign that the Spanish property market is now embarking on the long road to recovery.
“The increased market activity by local buyers was the standout trend in 2015,” said Tom Maidment, partner at Lucas Fox “Spanish buyers have been active predominantly at mid-end of the market, attracted by property prices at an eight-year low, a recovering economy and increased lending from Spanish banks. For several years the market has been dominated by international buyers and whilst foreign investors still account for the majority of our sales, the number of local buyers is clearly on the rise and we expect this trend to continue apace throughout 2016.”
It would appear that more Britons, including investors, are keen to acquire property in Spain again, thanks in part to a favourable sterling to euro exchange rate, with property sales to the British rising by 50% in Barcelona year-on-year, while UK buyers accounted for more than two-thirds of home sales.
Sales to the Spanish were also particularly strong in Valencia where transactions to local buyers more than doubled. There were also significant increases in Maresme, the coastal area to the North of Barcelona, and the Costa Brava, where Spanish buyers accounted for 37% and 29% of home purchases respectively.
Official figures show that overall transactions in Barcelona were up significantly during 2015, averaging 2.667 per month, an increase of 19% on 2014 figures.
Data from Spanish property portal Idealista also show significant price rises across all regions in 2015 compared to 2014 – in Madrid by 4%, Barcelona by 6% and Ibiza by as much as 23%, doubling the growth rate of the previous year.
“Figures for property prices can be misleading” said Lucas Fox co-founder Alexander Vaughan. “One has to take into account that some of the official statistics are based on asking prices.”
He continued: “Year-on-year we have not seen house prices rises. In fact, the average property price for a Lucas Fox sale in 2015 was around €1m, the same figure as in 2014. Sales prices can still be significantly lower than the asking price, although that gap is finally narrowing. The average price of prime property in prime regions is also being driven up by sales of new developments, which can sell for 20% to 30% more per square metre than re-sale homes in the same prime micro-area. Currently demand for this kind of product is outstripping supply.”