Spanish Property Prices and Sales Are Finally Increasing

According to statistics from Kyero.com, which is Spain's largest English language property website, asking prices for property in the country has increased to €266,100 during the third quarter of 2011, and it looks as if there may be a shortage of quality properties in popular regions.

The country has experienced a tourism boom, and some hotels have seen 100% occupancy during the summer months, and this has led to increased interest from second home owners looking to rent out their property for at least part of the year.

Property professionals throughout Spain have seen an increase in enquiries and inspection trips, and certain areas such as Costa Blanca, Costa Calida, Alicante and Murcia are seeing respectable price increases.

Prices in Alicante began rising at the end of last year, with the average asking price of €220,000 in December rising to €231,000 in September. The region has enjoyed substantial investment into its infrastructure, and a second airport terminal was recently opened which should help attract more visitors, especially as prices are still below the national average.

Between April and June, Alicante saw its biggest ever number of sales to foreign buyers, but Malaga still took top place. It has been nominated as a candidate for the 2016 European Capital of Culture, and if it wins this will further boost tourism numbers and property sales.

The island of Mallorca still remains popular with visitors, and the average asking price is €416,300, which is the third highest average in Spain. The Spanish government has reduced VAT on new property until the end of the year, and this is also encouraging buyers to purchase now as it can save an average of €8000 on a €200,000 home.

Spanish Property Benefits from Construction Decrease

Spain's property market is benefitting from a decrease in new home construction in 2010. A decrease of 33 percent has been reported from 2009 to 2010, according to the latest statistics from the Government.

A 60 percent decrease in Spain property construction completions have occurred from 641,419 new homes in 2007 to 257,443 new homes in 2010. This is largely due to a decrease in demand for residential properties.

Planning approvals have also declined according to research, as they hit an all-time low of 91,662 last year. This is an indication that less and less homes will be coming onto the market for the short to medium future.

Spain has been experiencing a great oversupply of homes across many regions of the country, so a slowing down in property construction was necessary to balance things out. Since Spain’s property market peaked in late 2006, property prices have decreased by up to 60 percent.

There are around one million unsold homes on the market in Spain currently. Despite the large number of homes, some house builders, such as Polaris World, are still planning on building new homes this year. Property experts do not believe that this is a good idea, as the market is best when supply vs. demand is more balanced.

With the large number of unsold properties at affordable prices, the amount of overseas investors has increased. Investors are very interested in capitalizing on the oversupply to fatten their investment portfolios in the hopes of high returns on their investments in the years to come.

Spanish Property Market Shows Signs of Improving

Spain joins various other countries beginning to see more favorable property market conditions this New Year. Statistics revealed by the Ministry and Public Works and Transport of Spain, Spain’s real estate market is experiencing noticeable growth, which is a good sign that it is indeed recovering from the financial crisis.

Backing this growth is data from Spain’s government regarding total property sales in 2010. 491,000 real estate transactions occurred in 2010, which is 5.9 percent higher than the previous year. Since the financial crisis began in 2008, Spain’s fourth quarter of 2010 experienced the most market success, with figures coming in at 14.2 percent. Experts look favorably on this jump and anticipate the growth to continue throughout 2011.

Spain is also becoming more popular with overseas buyers, as overseas transactions have jumped 20.6 percent. The Alicante province is of particular interest among foreign buyers, as the number of sales increased by 24.3 percent. An additional 11 autonomies have reported that apartment sales have increased, while 6 areas indicate that demand is decreasing.

Basque County reports a 30 percent increase in growth, while Murcia reported 16.3 percent. Popular beach destinations such as Costa del Sol and Costa Blanca have reported increases as well, with Costa del Sol increasing 7.5 percent. Andalusia is currently Spain’s largest real estate market, with 88,000 transactions recorded, followed by Valencia, Catalonia, and the region of Madrid.

Spain is experiencing a growth in tourism as well, which will help with property market growth. Local real estate agents believe that 2011 will experience greater growth and stability and have a favorable year.

Spanish property market picking up

Recent research into the Spanish property market indicates that it will recover before the economy which is the reverse of what usually happens. Developers in the country are increasingly optimistic with Taylor Wimpey de Espana reporting an increase of 25% in the number of properties sold in 2010 when compared to 2009. This has resulted in most of the stock being sold.

Customer enquiries increased by 27% in the third quarter of 2010 and primarily came from people looking for retirement and holiday homes. This increase in sales and interest has prompted Taylor Wimpey to start development in three new sites in Spain where 30% of the properties have been sold off plan already.

Spain will always remain a hugely popular country for British holidaymakers and those looking to retire there or to purchase second homes, and although the downturn did affect demand homes in sought after locations are continuing to sell well. These include homes in the Costa del Sol and Marbella. Although the Spanish government has reported a glut of homes for sale in less popular regions some Spanish property developers are refuting these numbers. Official reports say there are about 1 million unsold properties whereas the developers say there are just 350,000 unsold homes.

It remains to be seen which reports are true and many believe that rental yields here will continue to fall before picking up later on in the year. But if the property market here is beginning to turn around and then investors might wish to begin researching seriously now before the traditional upturn in house sales in the spring.