Expert Predicts Spanish Real Estate Prices Set for 6% Increase

Expert Predicts Spanish Real Estate Prices Set for 6% Increase

Spain's recover looks to continue its uptrend

One of the key players in the Spanish real estate sector has said that the average property value in Spain will increase between 5 and 6% within the next three years.

Humphrey White is the head of the Spanish division of British real estate agency Knight Frank. White says the strengthened economy of Spain is going to spur on strong and sustainable demand with Spanish buyers , while the country will always be a favourite for international investors looking for a popular place in the sun.

White went on to add that the lack of speculative promotion has really helped the Spanish property market. This has brought about renewed confidence in the sector, along with transparency and sensibility.

The result is that there are areas of Spain where there simply aren’t enough good quality houses to go around. So there is room for banks and real estate developers to take to these areas and increase the supply to meet the new demand.

The agent says that Spain currently has a fantastic opportunity to bring in new companies because it offers them high quality properties in prime locations such as city centres near airports, along with a whole host of qualified professionals.

A recent report from Frank Knight showed that Madrid and Barcelona are in the list of the top 20 destinations for the mega-rich; for both residential properties and investment in commercial real estate.

Data published just last week by the National Statistics Institute showed that the amount of foreign buyers investing in Spanish homes increased just under 20% in 2016; with foreign investors accounting for one-fifth of all the homes sold in Spain.

While Brits have always been the biggest demographic of foreign investors in Spain the data also shows that they aren’t growing as quickly in the third quarter. This drop was made up by an increase in interest from other nations including France, Italy and Sweden. The amount of Russian investors however continues to drop.

Expert Predicts Next Five Years Will be Great for Spanish Property

Expert Predicts Next Five Years Will be Great for Spanish Property

According to one professor the outlook for the Spanish property market is great. The real estate expert said that now is the best time to purchase property in Spain. His confidence comes from all the data and trends that suggest the next five years will be truly great for the Spanish property market.

The future is still bright for property in Costa del Sol

The expert in question; the economics professor and director of the real estate programme at the University of Barcelona Gonzalo Bernardos is definitely in a good position to make such a claim about the health of the property market.

No doubt his words are going to be eaten up by the thousands of people who are considering buying property in Spain. His words will definitely be welcomed following the uncertainly of the Spanish property market after the Brexit, which threatened to undo all the good that went into the property market in recent years.

Bernardos believes that 2016 will be the first year in the five-year golden period of expansion; a period in which every property asset will grow in price. Mark Stucklin, a property insight expert, took Bernardos’ words to mean that Spanish property is definitely going to be a one-way bet for the next five years. People looking to invest in property would do well investing in the popular areas of Spain such as Barcelona, Madrid, Ibiza and Merbella, along with most of the Costa del Sol.

But just what is behind the confidence Bernardos feels? He also added that the low interest rates of Spain are helping make property there even more attractive and that the recent economic recovery is helping to create a perfect storm.

He says that the residential market in particular is becoming a refuge for investors once more and that a key part of this is the low interest rates. The low interest rates are helping to make monthly mortgage payments far more affordable than the average rental prices. With this expected five years of growth and better job security Bernardos believes that it makes sense for people to begin buying rather than renting.

Bernardos believes that the disastrous decade that was from 2006-2015 will be followed by five fantastic years of an excellent property growth from investors . The interest from investors, coupled with the strong economic growth, will see the end of the hangover and bring the real estate market to providence.

These are definitely decisive words. Bernardos is also confident that if another international economic shock happens it will be mitigated by an increase in spending in Spanish households and company investment with a focus on construction.

Bernardos even had some words for people who were worried that his words sounded as if they came from ten years ago. He assured those people that there will be no room for speculators in this new golden property market.

He added that even if speculative demand does make a reappearance it will be much lower than last time and that banks have learned their lesson and will not give people money to fuel their speculations.

Spanish Property Expert Believes Brexit may Affect British Demand for Spanish Property

Spanish Property Expert Believes Brexit may Affect British Demand for Spanish Property

The effects of Brexit are still unknown but could effect prices

It’s been suggested that the weakened pound and the general uncertainty following the British exit from the European Union is likely to undermine the British demand for Spanish properties.

This could be quite concerning given the strong British demand since 2013. Mark Stucklin of Spanish Property Insight is even suggesting that this trend could now go in the opposite direction.

Mr Stucklin believes that the negative impact will mostly hit the areas with a high British demand such as Alicante and Malaga, along with the Balearics, the Canaries, and Murcia. He says that the Brexit vote will mean that there are just less British buyers overall.

One of the reasons that British demand for Spanish property is driven by how well the pound is performing. When the pound goes up against the euro then British demand rises within two quarters. The pound has been wakened following the Brexit however so it’s almost assured that the demand will be reduced as a result.

Stucklin suggested that this drop in demand won’t just come from British vendors either. He believes demand will be down overall and that experts may need to re-evaluate their price expectations.

He also believes that less Brits will move to Spain until deals are made and this will take two years at the least. British expats in Spain are now unsure where things are going to end up right now. It could take years for all the dust to settle and it’s likely more expats will head back home rather than come into Spain.

One group of people who should be unaffected are British people with Spanish holiday homes who don’t plan on selling them. The biggest worry for them is how the UK will look when everything is over.

The latest figures from the Notaires registrar do confirm that a strong pound and Spanish property prices were behind the rise in British demand last year. Property buyers from the UK made up the largest group of buyers with 21% of foreign buyers coming from Britain; a rise of 42% over the previous year.

The British are truly the major players in the foreign buyer market in areas like Alicante on the Costa Blanca and Malaga on the Costa del Sol.

At the same time it’s also true that Spanish property prices will likely go down following the fall of the pound. It means that the exchange market is easier on those changing their pounds into euros. It’s still true that British pensioners looking to move to Spain will find themselves with less money now though.