Rise in Spanish Property Prices Expected to Increase Until 2025
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Property prices in Spain will continue to rise which is
great news for the Costa del sol
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The slump in the Spanish property market lasted a good seven
years but things are on the up now, with one market analysis suggesting that
prices are set to continue increasing steadily for the next nine years until
Spain reaches the peak prices of 2007 once more.
Or so José Luis Suárez, a financial management professor
with the IESE business school, claims. He gave a now-widely-quoted symposium
over the weekend in which he claimed that Spain will need to build 100,000 new
homes each year until 2020, with the demand increasing for the next five years
to 140,000.
There are a number of reasons people should be optimistic
about the health of the property sector in Spain. While a number of encouraging
reports have come out this is by far the most encouraging one. It was between
2007 and 2014 that the demand for property took a sharp downturn with only
75,000 homes built a year, down significantly from the high of 800,000 in 2006.
Suárez believes that Spain is headed for a slow but steady recovery now after construction
reached an all time low of 50,000 in 2015.
Madrid and the Costa del Sol is currently where the highest demand for new property is. Roughly 25,000 homes are constructed there each year.
Suárez had something to say about the average price per
square metre of residential property too. He made the point that the annual
rises seen leading up to 2007 were followed by bludgeoning cuts. The price per
square metre fell from 2,062 euros in 2007 to around 1,400 euros in 2014. He
expects that it will be 2025 when we see the peak price from 2007 once more. It
is worth noting however that this figure doesn’t take inflation into account.
It’s not an accurate representation of the “real” value.
It his figures prove accurate though it means that Spanish
property can expect an appreciation of around 40% in nine years, making investing in Spanish property a smart choice. You should keep in mind that
market trends change all the time and are also different from area to area.
