Spanish property markets such as Marbella see recovery, new analysis shows
After seven years of stagnation the property market in Spain is experiencing an uptick in sales and prices have reached bottom, according to a new analysis report.
With the Spanish economy improving, unemployment falling, tax revenue growing and a more stable banking system, lending figures are on the rise, says the analysis from Diana Morales Properties, an associate of international real estate firm Knight Frank.
It points out that the typical mortgage lending rate dropped from 4.21% to 3.29% over the course of 2014 and this has fed through to buyer confidence. Andalucía and the Canary Islands have seen some of the strongest surges in mortgage lending, up 25% and 26% respectively month on month, compared to the national average of 14.2%.
This renewed confidence and interest in Spanish real estate is most evident in Madrid and Barcelona where capital flows into both cities’ commercial markets topped €2.7 billion in 2014, the analysis says.
It also points out that the return of large US investment funds has been notable but not just in Spain’s main cities. ‘The acquisition of Sotogrande by US based Cerberus and developments to the east and west of Marbella by other US funds, as well as the purchase of Monte Mayor golf club by Russian investors hint at the extent to which the recovery is gaining traction,’ it says.
Marbella, a popular area with overseas buyers is building on a property market recovery that began in 2013 despite Spanish buyers failing to return in any significant number in 2014 and the Ukraine crisis impacting on the number of Russian buyers.
There was strong demand from an increasingly diversified client base of Scandinavian, Benelux, French, Arabian and Moroccan buyers which added to the record tourist numbers lending a certain buoyancy to the local economy.
Marbella and its surrounding municipalities of Estepona and Benahavis together recorded a 27.7% increase in property sales in 2014 compared with a year earlier.
Marbella, however, outperformed its neighbours, by experiencing an 89% jump in property sales between 2008 and 2014 according to Spain’s Ministry of Public Works. Benahavis and Estepona, by comparison, recorded rises of 62.3% and 22.8% respectively over the same period.
It also reveals that the amount of time properties spend on the market is dropping if realistically priced, while in some prime beachfront locations there is even a shortage of available homes, complete with waiting lists for specific property types.
The analysis says that new bank repossessions remain and this has prompted the return of new construction that remains for the moment primarily focused on individual villas and small to medium sized developments of apartments and villa communities.