Spain Real Estate Market – Stable Growth
Positive dynamics in the Spanish real estate market and high profitability when renting housing – all this makes future investors seriously think about buying a house or apartment in a sunny country; it is not for nothing that most economically savvy residents of Great Britain buy property in Spain; we will find out further what the immediate prospects of the Spanish real estate market are and in which regions it is worth buying real estate now.
Briefly about the main thing
Spain is a country extremely popular among tourists. There are many reasons to visit it, but every year the number of reasons is growing to stay in it.
After a severe economic crisis, the country’s economy is confidently recovering. The government has taken a number of effective measures to improve the situation, including a review of the banking system and labor market reforms. The unemployment rate fell significantly, and the state budget deficit began to decline.
All this could not but affect the Spanish property market. For the fifth year in a row, there has been a positive trend. Both prices and demand are rising. In addition, the return on investment in the Spanish property market is much higher than in other countries. And more and more foreigners are buying property here.
Rich culture and mild warm climate
Stable economic growth
Quality Products and Products
High standards in healthcare and social welfare
High rental yield
Robust legal framework protecting the rights of property buyers
The presence of initial growth points in the real estate market with great potential
Value for money in the real estate market
The current situation in the real estate market
Housing prices continue to rise in the Spanish property market, including both new buildings and the secondary. In April 2018, price growth amounted to 5.4%, which is the highest figure since the pre-crisis 2007. Compared with the lowest level recorded at the beginning of 2015, the average price of residential real estate in Spain increased by 10.3%. At the same time, in comparison with the “peak” indicators of 2007, housing is currently on average 15-20% cheaper.
Prices for real estate in the premium segment are also rising – the average price per square meter is set at 6,700 euros. For comparison, in 2017, a “square” on average cost 6,500 euros, and in 2016 – 6,075 euros.
It is worth noting that in the Spanish real estate market, not only prices are rising, but also demand. For example, the number of sales transactions in 2017 was the highest since 2008, and according to forecasts, these numbers will only grow.
Once again, foreigners show great interest in the Spanish real estate market. In 2017, more than 61 thousand transactions were concluded with their participation throughout Spain. In total, this year they invested 31.1 billion euros in the Spanish real estate sector, thereby making it the leader in terms of investment from abroad. Most of all Spanish real estate among Europeans is bought by the British and French, the number of Germans, as well as residents of the Scandinavian countries, acquiring “second residences” to survive the cold winters, has increased.
Over the past two years, there has been an increase in demand from the Russians – after the stabilization of the ruble exchange rate and due to the falling profitability of Russian real estate, they are increasingly investing in the purchase of property in Spain.
Rental price in Spain
Renting property in Spain is becoming increasingly profitable. In June 2018, the average cost of renting a living space of 80-90 sq.m. amounted to 680 euros per month, which is 9.7% more than six months ago.
The national average profitability is 5.7% per annum, and, according to forecasts, the tendency to increase it will continue in the coming years. Most of all housing is offered for rent in Catalonia, Madrid and Andalusia, and least of all in Rioja, Navarre, Extremadura, Ceuta and Melilla. The most popular rental area is about 90 sq. M. m
Prices on the Spanish property market are still far from their peak. According to forecasts, their growth will continue in the next couple of years. The demand volume will be at the level of 540 thousand transactions, and in 2019 it will approach 580 thousand objects. At the same time, 80% of them will still be in the secondary market. However, the growth of activity in the construction sector next year will not only increase sales of new buildings, but also for the first time since 2012 to overcome the bar of 100 thousand objects.
All this became possible due to a reduction in unemployment and positive employment dynamics, which are catalysts of demand. To these factors is added the strengthening of foreign demand in the Spanish residential real estate market.