Sales recovery continued in Spain in first few weeks of 2017
The recovery in the Spanish housing market has continued into 2017 while a rise in sales in places like Malaga and Alicante signal a return of foreign buyers.
The latest figures from the Land Registry shows that sales increased by 19% in January year on year, the biggest number of monthly sales since January 2013.
According to Mark Stucklin of Spanish Property Insight it is the highest number of recorded sales since 2008. ‘Sales in 2013 and 2011 were inflated by Government tinkering in the market. So it’s the best start to the year for sales since the boom ended,’ he said.
A breakdown of the figures show that the biggest rise in sales was in the Balearics with an increase of 40%, followed by Cantabria up 40%, Barcelona up 36%, Tarragona/Costa Dorada up 35%, the Costa Brava up 28%, Asturias up 27% and Madrid up 22%.
Sales were also strong in southern locations popular with overseas buyers with the Costa del Sol up 20% and the Costa Blanca up 17%. Stucklin pointed out that sales in these regions may have been affected by a fall in British buyers last year after the UK voted to leave the European Union.
Some locations, however, are still struggling. Sales were up just 1% year on year in Costa de la Luz and the Canaries while they fell by 2% in Costa del Azahar which was driven by a 45% collapse in new home sales.
Overall, resales were up 21% and new home sales up 8%. Stucklin believes this is as sign that the new development collapse is slowly drawing to an end. ‘It’s a relief to see the Spanish home sales recovery continue in 2017 and the increase in Malaga and Alicante suggests to me that buyers from other nationalities are stepping in to make up for a decline in British demand brought on by Brexit,’ he added.
Agents Lucas Fox have found that foreign buyers are returning to the market although there have been indications that Brexit is affecting the number of British buyers and the election of Donald Trump as President of the United States is affecting American buying habits.
Enquiries from the UK for homes in all desirable second home destinations have decreased following the Brexit vote, most notably on the Costa del Sol, traditionally popular among British buyers. Lucas Fox data shows that Barcelona and Ibiza were the most searched for destinations among UK buyers during 2016.
‘Since the referendum, UK buyers have dropped off due to the weakening of the Pound. There is still movement at the lower end of the market and towards the latter half of the year there has been an increase in the numbers of sellers of re-sale properties discounting prices, particularly British sellers who can now afford to reduce the price without affecting what they will make in Sterling,’ said Lucas Fox Marbella partner Stephen Lahiri.
But despite the Brexit vote, British people continued to made up the biggest proportion of foreign buyers in 2016 at 11% although down from 18% in the previous year, followed by buyers from the Middle East at 8%, up from 5% in 2015.
The number of buyers from Scandinavia has also increased, up to 7% from 4% in 2015 while buyers from France have fallen from 9% to 6% and there has been a slight rise in American buyers from 4.5% in 2015 to 5% in 2016.
‘We’re seeing growing national and international demand for homes in leading cities and desirable second home destinations showing that Spain’s economic recovery is on course despite last year’s political paralysis,’ said Lucas Fox co-founder Alexander Vaughan.
‘With interest rates set to remain low, many are turning their backs on investing in traditional savings accounts, and choosing bricks and mortar instead, especially as banks are keen to lend,’ he explained.
‘We’re optimistic that the Spanish Property market will continue to improve through 2017 and for the coming years. Prices and transaction numbers are rising steadily in the major cities but in other areas it’s a very different story, with many property owners in secondary locations still having to drop their asking price to secure a sale,’ he added.