LPG Spain was recently approached by the web site, Spain Made Simple, asking us our opinion on the current state of the Spanish property market for their newsletter.
We were more than happy to oblige. Here are their questions along with our answers:
Q. Are property prices in Spain going down, up or stabilizing?
A. Spain’s property market is now into its seventh year of recession. During this time prices have dropped significantly from the heady heights of pre 2007, prices of which many claim, had to drop. During this period, many thousands of estate agents, developers and builders have disappeared, leaving a hard core of professionals still struggling to survive. However, price performance has varied considerably in different parts of Spain depending primarily on its clientele, domestic or foreign.
Within the domestic market, Spaniards have seen the bottom drop out of their market with prices coming down up to 60% in some areas as banks haul in repossessions and unsold new stock from developers that have gone out of business. Added to this, the banks are also offering 90% + mortgages to the Spanish who buy any of their stock.
On the other hand, coastal regions have fared much better as the majority of buyers are from overseas. Whilst it‘s been a complete buyers market over the last 4 – 5 years, where purchasers have been offering very low bids on property already drastically reduced, there are regions that are now beginning to recover, which leads me to the next question…
Q. Who represents the main buyers now, is it the Spanish or has another foreign market taken over from the British?
A. The Costa Blanca reports thriving business from the Russians. The Costa del Sol has been almost invaded by the Scandinavians, in particular those from Sweden and Norway, whilst the British, historically the nation that has purchased more property in Spain than anyone, is still a little conspicuous by their absence, although in the past six months have shown an increase in property purchases in Spain.
As an Estate Agent on the east Costa del Sol, in Nerja, Edwards Estates also employs Swedish staff, and can attribute 75% of sales last year to this market. We would also go as far as to say that during the course of this winter, the problem that we are having is not a shortage of clients, but a shortage of quality and well priced property. This indicates that the majority of prices in our area are still overpriced, in the eyes of the purchaser, but property that is priced well for the region is selling quickly.
Concluding, we see that 2013 may be the year that prices do stabilize in areas that are in demand, whilst the Spanish domestic market will continue to suffer with even further reductions in price added to the main problem for potential buyers, uncertainty in the job market and the unemployment situation, currently at over 5.000.000 people, still rising and expected to reach 27% of the active working population this year, more than fifty percent of which are people under the age of 30. Not an easy situation for those trying to get onto the property ladder.
Robert Edwards – Administrator of LPG Spain.
- Forbes Magazine: “It’s a good time to invest in the Spanish property market”.
- Foreign House Buyers in Spain up 28.4 pc in 2012.
- Has the Spanish Property Market Bottomed out yet?
- House prices in Spain fall by 15.2% in the third quarter, the biggest drop since 2007.
- Spanish Property Prices have fallen 40% since the Peak.
- Swedes and Norwegians flock to buy property in Spain.