Sunrise on the Costa del Sol Photo: Barbara Walsh Photography
1. Booming investment
Sales of Spanish real estate have risen consistently in the past year, as investors and holiday homes buyers take advantage of the country’s affordable prices and improving economic conditions. According to the Spanish Ministry of Public Works, sales surged 28.4 per cent by volume in the first nine months of 2014 compared to 2013.
The figures follow statistics from the INE, which show that the property market grew 13 per cent in October, and data from the Property Register , which shows that sales grew year-on-year in eight out of the first 10 months of 2014, compared to just three out of 10 in 2013.
2. Bottoming prices
Prices have been showing signs of stabilising in recent months, with the country recording its first increase in several years in September, according to Tinsa. Indeed, the IMF’s latest report (which tracks four troubled European markets) says that Spain’s values have already bottomed out.
“Price-to-rent and price-to-income ratios are now only about 0-15 percent above their historical averages in all four countries,” reads the report . “Real house prices have already begun to stabilize in the Netherlands and rise in Denmark and Ireland.”
3. Climbing construction
Construction is climbing once again in Spain. The country’s market was worse hit than most by the global financial crisis thanks to its large supply of homes, driven by its previous building boom. While demand for existing homes has been stronger than new homes, activity in the development sector has begun to improve once more, with figures from the Ministry of Public Works highlighting a 6.7 per cent increase in building permits in the first 10 months of 2014 compared to the same period in 2013.
The increase is from a severely low base of activity, which means the market is far from back to normal, but the improvement marks another positive step in the right direction, as upbeat sentiment spreads across the real estate industry.
4. Steady sales
Resale homes accounted for the majority of sales in the first nine months of 2014, according to the Spanish Ministry of Public Works, with transactions climbing 33.4 per cent year-on-year to €5,404.4 million. While new home sales fell slightly, though – down from €680.3 million to €672.9 million – overall transactions climbed 28.4 per cent.
5. Thriving tourism
Spain’s property market has always been fuelled by its tourism industry, whether holidaymakers are looking to stay on a more permanent basis in a popular hotspot or investors are seeking a buy-to-let income. Despite the financial crisis and long recovery, though, Spain has never been more popular: according to new figures, Spain welcomed a record 61.7 million visitors in the first 11 months of 2014, more than all of 2013 combined and already a new annual record.
Brits are driving the rise, with 14.3 million visiting between January and November, while French, Italian and Belgian tourists also increased in number by 10 per cent apiece.
6. Growing lending
No property market can work without a stable and active mortgage sector. Spain has enjoyed positive signs from its lending industry, too, with INE data reported by Spanish Property Insight revealing an annual rise of 18 per cent in the number of new mortgages granted to residential homeowners. The total value of lending for residential purchases was €1.766 billion, 15 per cent up year-on-year.
Valencia led the way in lending, with mortgage approvals rising 46 per cent, ahead of Aragon (37 per cent).
7. Weakening currency
The euro has weakened in the past year, thanks to growing economic concerns, while sterling has strengthened, fuelled by positive UK financial data and rising house prices. As a result, the exchange rate is now highly favourable towards buyers from the UK and USA, with the pound rallying to a seven-year high against the single currency on Friday 2nd January.
Indeed, according to the General Council of Notaries, sales rose in Costa del Sol significantly last year, with Brits making up 21.5 per cent of foreign transactions.
“We can talk of a real recovery now,” said the president of the Provincial Association of Constructors and Developers of Málaga, José Prado.
8. Rising demand
On TheMoveChannel.com, demand for Spanish property hit a 12-month high in November 2014, while in December, the US and Spain were both neck-and-neck in the race to win over the most buyers: the countries each accounted for 1 in 10 enquiries on the property portal.
9. Falling unemployment
Foreign buyers have been the principal drivers of Spain’s property recovery in recent years, as poor economic conditions have sapped local demand. This has left the country reliant on overseas investors, either attracted by low prices or Spain’s Golden Visa scheme for non-EU buyers.
Nonetheless, conditions are now improving for domestic buyers too, with the country officially out of recession and unemployment now falling. The number of people registered as employed climbed by 417,574 in 2014 year-on-year, according to new figures released by the Labour Ministry this month – the first annual increase since 2007.
10. Increasing confidence
El Mundo has officially declared 2015 to be a year of optimism for the property market. The daily newspaper has significant influence over the industry’s expectations, notes Spanish Property Insight , but also acts as a significant barometer of public opinion.
Stable prices, accessible finance, climbing construction, favourable investment conditions and strong demand from both home and abroad are all vital for a real estate market to grow significantly, but so is confidence. According to a new survey by a CIS, the majority of Spaniards (50.1 per cent) now expect property prices to be stable in 2015. This is the first time this has happened since the crisis struck, which indicates a growing level of positive sentiment in the country.
With all the other factors already showing positive signs for the year ahead, 2015 looks set to be the year to invest in Spanish property.