Property Price Rises Lead Spanish Recovery

Posted on 27 January, 2014 by Cliff Goodwin

Spain — one of Europe’s recession black spots — is at last benefiting from an economic and property upturn, a new report claims. The financial services provider JP Morgan predicts the country’s economy is set to grow by one per cent this year on the back of encouraging industrial output results, exports and consumer spending. It also believes Spanish banks are now “healed and well capitalised” to take advantage of the recovery.

Property-Price-Rises-Lead-Spanish-Recovery

And, it says, an improved economy will lead to more stable property prices with banks once again beginning to lend during the second half of 2014. Transactions have already outstripped expectation with Chris Mercer, of the Murcia-based agents Mercers, predicting that sales would rise by 25 per cent in 2013 — the actual figure was 60 per cent.

“Coming off the back of a very strong 2013, I predict a further increase in sales volume this year as buyer confidence continues to grow,” he explained. “If bank lending finally improves, then the market will accelerate across the board.”

The five locations showing the fastest recovery potential are:

  • Costa Blanca saw a significant down turn in both commercial and residential property prices during the financial crash with many properties halved in value. A property investor who made purchases in the later months of the crisis may see significant profits during 2014 and beyond.
  • Madrid is continuing to attract attention with overseas real estate investors. The central area of the capital has been more resistant to price falls compared to the other areas of Spain and banks that have repossessed commercial properties are now starting to sell off these asset portfolios.
  • Barcelona commercial property values fell dramatically and real estate experts agree that many properties, some at 60 per cent of pre-crash values, will make good investment returns once the market recovers.
  • Marbella began a tentative market recovery in 2011. Property prices in this seaside town are still 20 per cent lower than they once were, but several hotel and retails units have already been sold with significant profits.
  • The Canary Islands suffered less than any of Spain’s regions with values never dipping more than 25 per cent of pre-recession levels. Real estate is recovering faster, and selling more regularly, on the Canaries and has turned the islands into a commercial hot-spot.

The JP Morgan report also shows that Britain’s expatriates are fuelling the revival by returning to Spain to live and set up new businesses. Figures for 2012 showed that it was the Belgians, French, Norwegians and Swedes who dominated the property market, with Britons only reappearing toward the year end.  Last year 64 per cent of Spanish sales went to British buyers.

Kieran Byrne is managing director of HomeEspaña.

“We’re certainly seeing signs of stabilisation in the market, with prices in established, sought after areas no longer falling and silly offers way below the asking price rarely being accepted for quality properties.

“Opportunities in 2014 won’t be limited to discounted resales either, as we’re seeing a definite interest in new build projects again, with some excellent beachside developments on our books selling out quickly,” he added.




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