For example, according to Lucas Fox, international property firm Knight Frank’s representative office in Spain, buyer confidence in the market is starting to return.
Lucas Fox notes that the fall in prime residential prices in Spain is beginning to slow and as a result investors are sensing a potential turnaround in the market.
Data released by the agent suggests that prices in some of Spain’s most desirable areas have fallen up to 50% since the property crash of 2006/2007. However, sales have begun to rise more recently as British and Scandinavian buyers return to the market.
Additionally, following the approval by the Spanish parliament of a new law, which will grant non European Union nationals residency when they spend €500,000 or more on Spanish property, there has been an uptick in enquiries from Russian, Indian, Chinese and American investors.
Lucas Fox has produced market reports for the first six months of 2013 for Barcelona, the Costa Brava, Marbella, Mallorca and Ibiza. They show that in Barcelona, the Costa Brava and Marbella, prices have fallen between 20% and 50%. In some areas, they may have reached the bottom.
Property sales in Barcelona are up 13.5% from January to May 2013 compared to the same period last year and Lucas Fox has seen the strongest two quarters of trading since the start of the property crash.
The luxury property market is doing particularly well, primarily in Barcelona, the Costa Brava, Ibiza and Mallorca where the average sales price of properties sold by Lucas Fox in the first six months was over a million Euros. In these key areas the property markets are still being driven by international clients.
Mallorca was the most popular tourist destination in Spain in the first half of 2013, with many British and Scandinavians returning to the market and on Ibiza, prices remain buoyant and the demographics of buyers is changing with more young European buyers in the 30 to 40 year age group.
‘The first six months of 2013 saw further encouraging developments in the property market in prime areas of Spain. In all regions we cover, the numbers of offers and sales completed were significantly up on the same period in 2012,’ said Alexander Vaughan, co-founder of Lucas Fox.
‘It remains a buyer’s market with even the best properties transacting at 20% to 30% below their peak prices and sellers increasingly open to negotiation on asking prices. Our advice to potential buyers is to focus on location and quality,’ he explained.
‘There are some great deals to be had and we think that in most areas, particularly Barcelona, the Costa Brava and Marbella, prices are at, or very close to, the bottom. We expect the trend of sellers lowering asking prices in line with buyer expectations to continue for at least the rest of 2013 and quite possibly the next couple of years,’ he added.
Properties in prime locations are readily available to potential buyers due to price corrections, according to Marc Pritchard, sales and marketing manager for Taylor Wimpey España. ‘Considering the unfaltering love for Spain as a holiday destination and retirement hotspot Spanish property owners will still be able to obtain a solid return on a relatively low cost investment,’ he said.
‘For anyone dubious about how the market is performing, here at Taylor Wimpey de España, the only developer building and selling new developments in Mallorca, we have experienced great success with a significant sales increase this year in comparison with 2012. These positive results highlight that in spite of what is going on in Spain right now, buyer interest still remains high,’ he added.