Spanish Property Prices Increase 5.6% in Second Quarter

Spanish Property Prices Increase 5.6% in Second Quarter

Property prices continue to rise and recover

from the 2009 crisis

It’s difficult to put together an accurate figure that tells all about the current state of Spanish property prices. Not only is there regional variation to contend with, but there are also a range of different metrics used, including average mortgage loans and recorded transaction prices.

Perhaps the most accurate metric would be the price per square metre of residential property. This data is monitored by the central statistics unit of the Spanish government, which last week revealed that the average cost of a square metre of Spanish property rose 5.6% in the second quarter of this year compared to the second quarter of last year. 

There were higher price increases in some regions compared to others. An encouraging bit of news is that 16 of the 17 autonomous regions of Spain registered increases in property prices. Madrid and Catalonia topped the tables with respective increases of 10.9% and 9.3%. 

At the bottom of the table came Castilla-La Mancha, Murcia, and Extremadura; recording respective gains of 0.8%, 0.3%, and 0.4%. 

The national increase is right in the middle of the prediction of 4 – 7% annual increases made by Spanish banks just last week. It’s also a reflection of the general health of the Spanish property market, which is seeing a steady increase in the amount of sales.

See How The Spanish Economy Boosted By Tourism and Exports in the First Quarter

See How Spanish Economy Boosted By Tourism and Exports in the First Quarter

2016 broke all record for tourism and 2017 is looking great too

Following a strong first quarter of Spain, Spanish Prime Minister Mariano Rajoy increased the economic outlook for the country. The economy was boosted by strong performances in the tourism and export industries.

The government now believes that national GDP will increase by 2.7% in 2017, up from the 2.5% expected at the start of the year. The stronger start to 2017 has been seen primarily in data about flights, hotels, and resorts showing record-breaking levels of tourism.

The Spanish real estate market is also offering encouraging interest and activity.

Rajoy said that the recent data for the first quarter of 2017, as well as forecasts both national and international, were behind the decision to revise the growth forecast.

The optimism matches the optimism shown by the Bank of Spain, which increased its own growth forecast to 2.8% GDP, putting Spain on the course to be one of the major economic performers of Europe in 2017.

The International Monetary Fund (IMF) published their own sober – if still encouraging – GDP increase. The IMF expects that Spanish GDP will increase by 2.6% this year, which would still leave the country ahead of the UK and USA for the second year in a row.

The Prime Minister expects GDP growth to continue across 2018 and 2019, leading to around half a million new jobs added each year. The result is that another million Spaniards will be in employment by 2020.

There is still some concern over the jobless rate, with Spanish unemployment sitting at 18.6%; one of the highest in Europe. Rajoy told reporters his government is planning a budget that prioritises this figure with plans to reduce unemployment below 16% by 2018.

Data from Fourth Quarter Reveals Strengthening Spanish Economy

Data from Fourth Quarter Reveals Strengthening Spanish Economy

Everything is looking Rosie for Spain

If you were to keep a close eye on the Spanish economy, the recovery might appear to be a little slow. With the benefit of hindsight however, we see that the impressive economic turnaround the country has seen since 2014 is nothing short of special.

Spain is still suffering from low wage growth and a high unemployment rate, but you would have had your hand bitten off if you’d offered the 2016 economic data of the country to anyone – from bank manager and financial analyst to average Joe on the street – from 2010.

Spain saw a welcome increase of 3.2% GDP for two years in a row, and has now reached the point where it is doing far more than just recovering from the double dip recession. Spain is currently on course towards becoming a shining economic beacon of light in the EU.

The latest data published by the National Statistics Institute (INE) this week shows that the Spanish economy grew 0.7% over last year during the fourth quarter of 2016. This economic success was fuelled by the success seen in tourism, exports, and industry.

This performance at the end of the year continued the trend that has seen 24 months of sustained economic growth. It’s thanks to this growth that Spain has entered the top three for Eurozone economies. The country has come a long way since the days between 2008-2013 when unemployment rates went out of control, the youth fled the country in the thousands, and everyone responded with scepticism at the prospect of economic recovery.

Things have certainly changed. There is still a high unemployment rate (over 16%) but Prime Minister Rajoy and his labour reforms are helping stem the tide and improve the job market. Spain is also seeing the benefits of the economic recover across the rest of Europe, in particular the boost to Spanish tourism and real estate thanks to all the foreign money flowing in.

Economists in Malta are expecting this year to see a growth of between 2.5-2.7%, which might not be as much as in previous years, but is still a sign of the solidity that would have been just a pipedream four years ago.

Around 74,000 new jobs were created each month in 2016, and it’s expected Spain could see similar results this year. Spanish economy minister Luis de Guindos said that quarterly growth could be similar to what was seen last year. Given that the country was dealing with political strife last year and still experienced incredible growth, the estimates from economists could prove themselves to be conservative. No matter what though, it’s hard to deny that Spain has started 2017 as healthy as it's been for over10 years.

Property Sales in Spain Reach Second-Highest For Five Years During Third Quarter

Property Sales in Spain Reach Second-Highest For Five Years During Third Quarter

The Costa del Sol and Spain continue its property recovery

The latest data from the Spanish property registrar shows that a total of 103,055 homes traded hands in Spain between July and the end of September; representing the second-best quarterly performance in Spain for five years.

When compared to the third quarter of 2015 there were 11.1% more homes sold in the third quarter of 2016 as the property market became more active during 2016.

The third quarter was also up 4.4% over the second quarter of 2016 and showed the trend of each quarter being stronger than the last has continued since it began in 2010.

When you look at the 12 months leading to September there were 394,000 homes sold in Spain overall. This is an increase of 13.2% over the previous 12 months. 2015 itself was also a continuation of the growth the market saw in 2014, which is when the property market began to recover from years of contraction.

To look back even further shows that the amount of homes sold throughout Spain in the third quarter is the second-best quarter for five years; beaten out only by the fourth quarter of 2011 in which there was a mass fire sale of distressed properties.

Many experts expect that this upward trend will continue on into 2017 and the years after; thanks to the economic recovery of Spain and the consistent appeal the country has for being a premier destination for going on holiday and purchasing property to the people of Europe and the world as a whole.

Not everyone was feeling the positivity however as the data showed that the average price for property sold in the third quarter was 1.4% the average price from the second quarter.

Experts explained away the shrinking average price – prices in Spain have been increasing for around 18 months now – saying that it was mostly due to a shrinking number of new build homes being sold. New build homes are usually more expensive than a resale home and so they can provide the average sale price with a healthy boost.

The data from the registrar shows that only 17.1% of the homes sold in the third quarter were new builds, which was down from the 21% from the quarter before.

Even though there was a small fall in the average property price your average home in Spain is still being sold for around 3.3% more than it was this time in 2015.

A Quarter of All British Property Enquiries in Spain are for Costa del Sol

A Quarter of All British Property Enquiries in Spain are for Costa del Sol

Properties along the Costa del Sol continue to be extremely popular with the British buyers. Data gathered during the past few years from Conti mortgage specialists has shown that 23% of all the enquiries Brits make about property in Spain has been for property in Costa del Sol.

Costa del Sol continues to be in demand

45% of all the enquiries that Conti have received in 2016 so far have been for Spanish properties. During the past three years the most popular regions have been Marbella, Fuengirola, Puerto Banús, Benalmádena and Sotogrande; also known as the Costa del Sol.

The Costa del Sol did better than the Balearics, which made up 18% of enquiries, while the Canary Islands accounted for 15% of British interest.

Surprisingly it was the Costa Blanca that took the top spot as they pulled in 27% of all enquiries. This is likely because of the fact that the data comes from the past three years; a period of time in which it was hard to find a buyer for the higher end properties in the Costa del Sol. At least for a short time.

The multitude of attractions in the Costa del Sol received praise from Conti for ensuring that buyers were interested in property there all year long. During the summer the beaches would be a smash hit of course. There was still interest during even the winter thanks to the other amenities including golf courses, bars, restaurants, leisure activities, schools, and English-language services.

Director of Conti Clare Nessling said that the Spanish property market is recovering after a tough few years, and that British investors were beginning to fall back in love with the country. While property prices haven’t managed to reach their old peak from before 2008 there are still many signs that the property market is recovering. This is creating confidence among buyers and drawing more interest to the region.

Data from the National Statistics Institute (INE) shows that property prices in the country have risen by an average of 4% over the second quarter of 2016, with the Costa del Sol leading the charge.