Foreign buyers accounted for just over 12% of sales compared to only 4% in 2009, according to Registradores (Spain’s Land Registry). Prices across Spain also went up significantly last year, from €1,586 per square metre to €1,720 per square metre. This represented an increase of 8%, but house prices were still 24% lower than they were in 2010, according to Spanish property search website idealista.
Since 2014, when the property market started its turnaround, sales have risen by 64%.
Last year was a particularly good year for the new homes market, which witnessed a year-on-year increase of 11.5% when comparing sales from January to November with the same period in 2017 (INE).
Now the directors of Lucas Fox are predicting that these trends will continue during 2019, with the biggest demand for homes continuing to be in city centres and desirable coastal second-home destinations. They say the overall outlook for the market is a positive one with steady price growth expected across nearly every region of Spain.
Continued price growth in Madrid
Prices in the capital, Madrid, were particularly buoyant during 2018 – rising by 17% in the city centre. Rod Jamieson, partner and managing director at Lucas Fox Barcelona, said demand is likely to remain slow during the first few months of the year but will spring into life once the political situation becomes clearer – with regards to both the central government in Spain and the potential effects of Brexit.
“I think that the outlook in general for Madrid is very encouraging,” he said. “It has only really been put on the map in the last three years so still has a lot of room for development. I suspect that prices will not increase at the same levels as 2018 in prime areas but demand will continue to grow in other up and coming areas of the city.”
In Barcelona, meanwhile, Jamieson believes that 2019 should be a positive year for the property market as confidence continues to grow, especially among international investors.
“As exclusive world class new developments become available in prime areas, we expect the results to be promising,” he commented. “Demand for investing in Spain on a global scale is growing consistently and Barcelona will continue to benefit from this. Also Spanish banks generally have a positive attitude when it comes to lending to international buyers, and, as interest rates remain relatively low, this will facilitate property purchases.”
One of the most exciting property markets in Spain, though, continues to be Valencia, according to Jamieson. Transactions were up substantially in 2018, with a rising number of international investors (foreign buyers represented 10.5% of sales last year).
Elsewhere in Spain, Malaga’s property market is expected to become a buyer’s rather than seller’s market in 2019, with international buyers ‘looking for value for money, new designs, quality and homes which are environmentally-friendly’.
Meanwhile, in Costa Brava and Girona external factors such as Brexit, its possible impact on sterling and the spending power of UK buyers - as well as wider implications for the European economy – could all still play a part in shaping the market in 2019.
Prices and transactions both rose in the Girona Province in 2018 and Ira Brankovic of Lucas Fox Marbella Costa Brava & Girona expects this to continue in 2019.
“As long as the quality and supply of property – both new build and resale – can satisfy demand there is no reason why the market shouldn’t continue along this positive trend,” he said. “The Spanish economy continues to grow, rates are still low and Spain continues to offer a safe and attractive investment option.”
In Ibiza, though, 2019 is set to be as challenging for the popular Balearic island as 2018 was, with new stringent holiday rental restrictions leading to a fall in transactions and ‘fairly erratic’ prices. The proportion of foreign buyers was also slightly down in Q3 2018 from the same period in 2017.
“I believe 2019 will be another challenging year for the Ibiza property market,” Tom Maidment, partner at Lucas Fox Costa Brava Ibiza, said.
“Prices have been consistently rising over the last ten years and have now reached a level which most believe can’t continue. There are a number of New Development projects underway that should come on to the market during the year that will bring a supply of properties in the mid and prime markets, giving the advantage of being able to buy guaranteed high quality properties without legal issues.”
He added: “Due to the new law which obliges a five year wait for New Development properties before being able to obtain a tourist licence, we expect this to impact negatively on the buyers purchasing for investment.”