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How Is The Spanish Property Market Doing?

The Spanish Property MarketThe latest figures from the National Institute of Statistics have just been released and they show a mixed but very positive situation in the Spanish Property Market. Why mixed? Well, the changes are not uniform over the whole of Spain as to be expected. Let’s look at the stats in detail.

Firstly, prices rose by an average of 0.8% which is the first average rise in prices in six years. Six years is a long time! Apart from prices, sales, construction and optimism in the market have also returned to positive figures. Even more positive is the news that sales in July have risen 10.7% year on year. This is definitely a trend even if the stats are being compared with a low base of the figures from last year. It has now been five months of continuous increases meaning that by the end of the year there will probably be an increase in sales in the calendar year for the first time since we were deciding that the last decade was called the Noughties.

The Spanish Property Market

The Spanish Property Market

Which Areas of Spain Are Benefitting Most?

The Valencia region showed the most positive figures with both sales and prices increasing. The increase in sales of 2.3% in the second quarter is surprising when there is still so much difficulty in getting mortgages but this trend should continue as finance gets more available and cheaper (Average mortgage rates decreased from 3.93% to 3.8% in the quarter) The figures for Valencia for just July are even more impressive with an increase of 4.3% overall meaning that with 4,231 sales only Andalucia had more sales in the month as a region. Valencia also had the most sales per 100,000 inhabitants with 107. Particularly impressive too were the figures for Madrid where year on year sales increased by 21.5% (possibly due to the fact that tax has been reduced to 6% in the region) making a total of 3,995 sales in July.


The trend is much more noticeable with second hand properties where sales are increasing much more rapidly. New build property sales are not showing the same increases and this must be a slight worry for developers and banks as they largely hold these properties and need to clear their balance sheets to return to growth.

The Luxury Property Sector

Lucas Fox are reporting that sales and interest in the high end of the Spanish Property Market are growing as buyers from the Far East and Northern Europeans including Russians have been growing strongly. Both Barcelona and Ibiza are showing good signs of a recovery in the high end real estate market, which was not as badly affected by the crisis as other areas, and Marbella and Puerto Banus in Malaga have started powering ahead now as Northern Europeans and Russians especially buy into a market considered to be at the base.

The Clients

The British still remain the most active buyers of Spanish property having just over 15% of all purchases by foreigners, however there are some surprises in the list. Belgians represent almost 7% of buyers which is quite amazing for such a small country in terms of population and the French are over 8%, mostly because the austerity measures and increased taxes on French property have meant the destruction of the internal market and the search for bargains in markets perceived to be low priced like Spain. The Russians are here en masse of course although since the problems with Ukraine started there have been difficulties in getting Visas for many of them and also transfers from Russia are becoming more difficult as the Russian government strives to prevent capital flight as the Rouble weakens.

Our clients this year have been from all over the World but the greatest increases seen are from the United States and Canada, Australia and surprisingly London, as opposed to the rest of the UK. This may be to do with London prices having increased 26% last year and people cashing out before the bubble bursts.

The Bottom of the Market?

Most analysts of the Spanish Property Market are in agreement and have now concluded with all of the figures presented that the bottom of the market has been reached and a recovery of sorts is building. However I would want to place a caveat on that. Location is still key with certain areas, and increasing numbers of areas actually, showing positivity and signs of growth whereas places with massive over-construction and huge numbers of empty developments will still take hits on price, the cheaper Costas and places with underwhelming communications and infrastructure for example.

I am quite happy to tell people coming to Valencia at both the bottom and the top end of the market that prices will not fall any further in general (Some properties are overpriced of course) However in the mid market you still need to sniff out that bargain as many properties remain overpriced in my not too humble opinion. Bargains can be found though.

In the rest of Spain where the Spanish Property Network has representation we are seeing price rises in the Malaga region, total stabilisation in Alicante and modest rises in interest and prices in other areas. Our city destinations are making good progress with interest in Madrid and Barcelona showing lots of enquiries and excellent properties and the North of Spain, Asturias, is showing signs of recovery too as the economy there improves.

If you are interested in knowing more or would like for us to act as your property finders in Spain just let us know. We would be happy to guide you and we believe you would be extremely happy with our expert service in whichever part of Spain you choose to go to. Send us a mail to info@spanish-property.net or just fill in the form below and we will contact you.

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The Spanish Property Market