A Strong Spanish Property Market
The world may be going through some political uncertainties at the moment, but Spain’s property market, by contrast, is buoyant, confident and set for positive growth in 2017. BBVA Research, which is the analytical division of the global bank, forecasts a 6.5% increase in property transaction in the coming year, which is excellent news for private sellers as well as companies building new developments. BBVA’s analysts also predict that there will be an average price increase of 3.5% across the Spanish property market.
It is good news, especially as Spain has not been immune to its own political uncertainties until recently, with two elections and much debate over who would actually lead the government. The effects of the British ‘Brexit’ referendum have yet to be seen, however, it is clear to those of us working in Marbella real estate that buyers from the United Kingdom have not abandoned their long love affair with Spain over the course of this summer, and whilst we can’t predict exactly what is coming, it seems likely that the British will continue to invest in holiday properties here. Plus, there has been an increase in Europeans relocating here in 2016 because it is a fantastic place to live and work.
Marbella & the Costa del sol have seen a significant influx of northern European buyers. Especially due to the new contemporary developments that seem to be a popular buy for the Swedish, Norwegian and Finnish buyer. The northern Europeans have their eye on the new off-plan properties rather than the resales which are more popular with the English and French market.
Positive growth in Spain Property Market
The BBVA analysts believe that next year’s positive growth reflects the “sensible and stable growth” of Spain’s economy, which has been heralded as one of the strongest in the Eurozone this year. They have even put a figure on the number of transactions and estimate that 475,000 will take place. The domestic market is regaining some ground after the blow hit to it by the recession, and foreign demand is increasing from Chinese and American buyers, as well as Scandinavian investors. The advent of Chinese and Americans is a newish departure, and whilst there have always been some buyers from these countries, it is only now that they are registering with real estate as a significant group.
The confidence in the real estate market is also translating into more new properties being built, and the BBVA report suggests that some 70,000 new building licences will be issued in 2017, which represents a 40% rise on the number issued in 2015 to 2016.
Back to pre-property boom
It is also important to point out to prospective buyers that although the banking experts predict a 3.5% price rise in property, this increase in fact only brings prices back to the level they were at in 2004. In effect, this is a return to the pre-boom property values. The majority of economic and real estate experts are confident that there will be no sudden price hikes like the ones experienced in 2005, when consumer’s easy access to credit and mortgages inflated property values to dizzying proportions. Those days are over and there is no need to panic about them returning.
What we can expect is steady growth, especially as interest rates seem set to remain low, which helps to maintain an economy at a manageable level. Added to this good news, BBVA expects growth in Spanish job creation in 2017 to hit the 800,000 mark, which is excellent news for Spain and for the Spanish property market.
Although there will always be purveyors of doom and gloom, this analysis of the Spanish property market for 2017 is just the kind of positive news that we want to hear and would certainly suggest that next year is going to be a great year for Spain and its real estate.