FT Reporting Stars Are Aligning for the Spanish Property Market

Spanish Property Market has grown and strengthened

Spain has finally turned the property corner and the

next 7 years looks excellent, buy property Costa del Sol.

The Financial Times are reporting that the  Spanish property industry has grown and strengthened so much that it recently turned a very large corner.

Following the massive price declines of up to 42% that happened between 2007 – 2014, the Spanish property market of today is filled with much more confidence and activity across the country. The market is supported by the improved economy, a new government, and the ever-present foreign investment.

During the third quarter of the year property prices went up by 7% and 9% respectively in Madrid and Barcelona over last year, with an increase in nationwide sales by 10% according to the latest data from the Spanish National Statistics Institute (INE).

The FT is reporting that investors can see how well the Spanish economy is growing and that businesses are beginning to jump back into commercial real estate.

Fernando Encinar, the co-founder of property portal Idealista spoke to the FT and said that there was a time between 2010 and 2012 when international investors avoided the Spanish property market. The lack of trust in the Spanish property market is gone and in its place are investors saying they want yield.

The FT reports that the recovery has been a gradual affair which is in line with how VIVA have read the market.

The post-recession upswing was originally recognised back in 2013 when the recovery began in the most protected areas such as Marbella. Following this came the interest from opportunistic investors that decided to go for those high-risk high-reward investments.

Investment firms including Cerberus Capital Management, Goldman Sachs, and Blackstone started purchasing property and it didn’t take long for private individuals to join in.

Miguel Pereda, the chief executive of Grupo Lar, says that consumption has recovered in Spain and that there has been a drop in unemployment. With an increase in consumer confidence has also come a 9.2% increase in sales for Pereda.

Investment has increased 25% in commercial real estate across the past year, with CBRE calculating that some €13 billion was invested in 2015. The amount of residential sales has also increased by figures in the double digits during the past 18 months, which has led to a snowball effect of an increase in demand and sales prices.

It looks like after six years of being considered a taboo of the economy the real estate off-plan developers are getting back in the game, and the stars are once again lining up for the Spanish property market.

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