Is the Spanish property investment market back on track?
Spain property investment
It would seem that the tides have changed in Spain’s property investment sector.
Many agents dealing in the market generally agree that it has ‘bottomed out’ and with property prices up 5.13% in the 12 months to June 2015, the highest rate since the economic crisis, it would appear that the market is starting to recover.
Figures from one of Spain’s largest commercial banks, Bankinter, show that property prices in the country will rise on average by 2% in 2015. The bank forecasts a 4% rise in 2016.
However, not everyone is in agreement. Website Hogaria recorded a 4% decline in property prices in July 2015.
Founder of Property and Spain website, Mr Homedes, recently told OPP that the market varies across the country.
The company has witnessed a significant rise in sales in 2014 when compared to 2015, with prices settling around 30% to 40% below their 2007/2008 peak prices.
Mr Homedes commented that the market’s performance varies in the domestic and international sectors.
“Looking at the international market as a whole, 2015 would appear to be a turning point. Prices have settled at 30-40 per cent below the peak in 2007/08 and are being supported by a shortfall of – and demand for – quality new-build. A similar level of upward pressure is occurring on prices in key Spanish cities, including Madrid, Barcelona and Valencia, where investors are fuelling the market. It’s a different story in the domestic residential sector although it’s improving gradually – by the end of April this year, the rate of price decline had slowed to 3.9 per cent annually,” Mr Homedes stated.
Moving forward, the company believes that average prices will increase between 2% and 3% depending on location.
“For example, within the same city of Barcelona evolution is very different depending on which the district. In the most demanded neighbourhoods, 2015 has begun with little available stock and surely this is going to raise prices faster than expected.”
It would appear that there is a brighter future ahead for Spain’s property investment market.