It took the Spanish property market several years before it really started to claw its way out of the chaos brought about by the 2008 financial crisis.
The Brexit referendum prompted concerns that the UK’s withdrawal from the EU had the potential to reverse this progress at least in part, given that UK nationals had become very active in Spain’s property market.
Fortunately, this has not been the case, in fact, quite the opposite, Spain’s property market continues to recover and UK buyers are still active.
Transactions volumes up significantly
Overall, Spain saw transaction volumes increase by 9.7% in the 12 months to September 2018 (according to figures produced by the Instituto Nacional de Estadística).
INE also recorded a 17% increase in sales inscribed in the Land Registry in October 2018 as compared with October 2017. There was a roughly equal increase in the sales of new homes and the re-sales of existing homes.
Tourist and retirement destinations lead recovery
Murcia showed the strongest overall growth, followed by the province of Seville and then Catalonia. This is hardly likely to come as a surprise given that the first two are located on Spain’s ever-popular south coast and the latter contains Barcelona, which, predictably, showed the strongest growth in its region.
It may be somewhat more of a surprise that the only regions in Spain to show a decrease in sales were the Canary and Balearic Islands, which are known to be tourist hotspots. Perhaps this can be explained by the fact that their tourist market largely comprises young adults who go to the islands to party and who are highly unlikely to be in the market for property.
While mainland Spain does have its appeal to partygoers, it also has a lot to offer families and older adults and hence is more likely to attract people looking to buy a holiday home, investment or retirement property.
Interestingly however, the Canary and Balearic Islands did see modest price increases, albeit not to at the same level as either the Mediterranean coast, Barcelona or Madrid, which suggests that market fundamentals are strong.
Developers are active again
Although the Spanish property market has been in the process of recovery for some time now, much of its progress has been a case of recovering old ground and, essentially, getting back to normality, rather than fresh growth.
Part of that recovery process involved enticing buyers from countries which had historically shown little interest in Spain and inducing them to step in to supplement, and if necessary replace, international buyers from countries such as the UK.
This strategy is now paying real dividends for Spain, even though Brexit does not appear to be having a significant adverse impact on the extent to which UK buyers are active in the Spanish property market.
In fact, it has been so successful that developers are now starting to be active in Spain again, for example, Taylor Wimpey Espana have six new launches planned just in the first half of 2019.
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