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Spanish Property Market 2021

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Introduction

Spain mapIn normal times, my annual report on the Spanish Property Market takes a detailed look at the statistics for the year just finishing. Usually, it’s possible to spot the important trends and make predictions about the year ahead.  But we aren’t living in normal times.  Therefore, as I wrote this report I had to think hard about how much to focus on statistics that, for the most part, might be meaningless.

Where the numbers come from

Even the statistics from the Notaries, always my preferred source, were of limited value because they are published half-yearly.  However, Spain’s first lockdown started on March 14th 2020, with Notaries only allowed to oversee emergency work for several weeks. Unfortunately, property completions weren’t categorised as emergencies. By the time they reopened for all business, travel restrictions were in place to and from many countries. To find out what happened for the rest of the year wouldn’t become clear until full-year figures became available in May 2021. 

So, in addition to analysing the Notarial returns I had to look elsewhere for quarterly returns to make sense of what was happening before the pandemic started.  I wanted to know what  was happening between January and mid-March 2020. These alternative statistics from the Ministry of Development do separate the domestic and overseas sectors. However, they compile by province and municipality and I think there is more room for error. In addition, they do not count by individual nationality, just lump all foreigners together in one block.  

As usual, the stats from the Property Registries are best ignored as they count when a property is inscribed in the registry, not when it completed in front of the notary.  Even in normal times inscriptions may be weeks or even months after completions. As a result, the Notaries and Property Registry statistics always differ and not by a little.  They are usually out of sync by 20% – 25%.  In contrast, the Notaries’ returns count when a transaction actually happens, the date on which a purchase completes. 

We now have the full-year 2020 figures to show where we are starting from as travel restrictions loosen to allow Spain’s overseas property market to recover. Overall, there were 80,106 fewer property transactions across the whole of Spain than in 2019. In terms of the foreign market there were 24,772 fewer buyers over the same period. This means the property market is back at 2015 levels in terms of overseas purchasers. In other words, five years of growth disappeared between March and December 2020.

I update this report regularly throughout the year and, with luck, Spain’s property market will start to recover as travel restrictions loosen.  I also blog and post on social media with news and views so make sure to follow us.

Where we were 

Spanish Market Report Puerto Mogan Gran CanariaThinking about some of the issues I cover in this report, a brief resumé of where we were just prior to the pandemic might be useful. In particular, the numbers for the property market itself, those for unemployment and tourism give a sense of where we were and what has been lost.

The Property Market

Full year figures for 2019 showed buyers from overseas made up 19% of the overall market.  With a total of 102,252 foreign buyers this sector was 77% bigger in numbers when compared with just before the 2008 global recession.  In contrast, the domestic market was much slower to recover from that shock and at the beginning of 2020 was still 40% smaller than in 2007.  So when the virus hit, the overseas market was in growth, perhaps slowing slightly, while the domestic market was still relatively sluggish.

Unemployment

Unemployment in Spain had reduced, starting 2020 on 13.2% nationally, the lowest in a decade.   However, compared with a Eurozone average of 7.5% and the OECD average of 5.2% these were still dire figures and the second highest in the the Eurozone. Only Greece was worse while in Germany it was only 3%.  And in some Spanish regions, Andalucía, Extremadura and the Canary Islands for example, unemployment was still struggling to get below 20% and stay there. Overall, Spain had five of the ten worst unemployment black spots in the EU.  (Source: Eurostat)

In addition, in the under 30 age group nationally the figure was much worse at 32%, albeit down from around 50% at the peak of the recession.  In fact, one third of the under 30s age group in Spain has never had a job. In contrast, the figure for youth unemployment in Germany was 6.3%.

Tourism

Pre-Covid, Spain’s tourism industry was continuing its seemingly unstoppable upward trajectory. 2019 finished with another all-time record of overseas visitors at 83.7m, making it once again the 2nd most-visited country in the world.  Tourism contributed about 14.5% to Spain’s GDP in 2019 although in some regions it was much higher than the national average.  Inevitably, Mediterranean regions and the islands depend even more on a healthy tourism sector. For example, the 45% of GDP generated by tourism in the Balearics makes it the most dependent, and vulnerable, region, followed by the Canary Islands, Andalucía, Murcia, the Comunidad Valenciana and Cataluña.

Where We Are

Tourism

Puerto Banus Marbella Spanish Market ReportWith the 2020 figures now finalised we can see the full impact of the pandemic. As a result of the related travel restrictions the 83.7m logged in 2019 had collapsed to 18.9m overseas visitors by the end of 2020. That’s down -77.3% nationally.

However, I see no reason why overseas visitor numbers won’t bounce right back when travel restrictions are lifted.  In spite of that, I can see the 2020 annihilation of Spain’s tourist industry having an impact on the property market in 2021, and perhaps longer. That is because  of how it is linked to rental income for property owners.

According to Ministry of Tourism statistics about 35% of Spain’s overseas visitors do not stay in hotels.  Obviously, some will have their own homes, or stay with family and friends, but that leaves a serious number of people renting privately.  As a result, rental yields make letting a property in Spain an interesting option.  And not just for the buy-to-let investor but also as a way to cover a property’s running costs.

Typically, a quality apartment or house in a prime location will generate a higher yield in the short-term holiday market than the same property let long-term, in the region of 3% – 5% better.  And although not all foreign owners are also part-time landlords, many are and rely on rental income to cover essential maintenance and running costs and taxes.  I wonder if it is possible that the total loss of 2020 rental income, perhaps followed by a poor 2021 season may lead to some forced sales, particularly if they have suffered Covid-related loss of business in the home country.

The Rental Market in Spain

I’ve already touched on the issue of rental yields in the section on tourism above. However, until we know whether Spain will be open to tourists in summer 2021 I don’t see much point in speculating about yields.  Nevertheless, a couple of recent reports caught my eye with some interesting figures that may impact the holiday rental market, at least in the short term.

Spain’s Institute of Statistics (INE) published a report concluding that there were 321,000 properties listed for short-term holiday lets across the country.  Approximately 57% are located in just 3 regions, Cataluña, the Comunidad Valenciana and Andalucía, which has the most with 67,392.  We can assume that, wherever located, the 2020 season disappeared almost completely.

However, several property portals, such as Fotocasa and Idealista, announced after the first lockdown, that many short-term listings have been withdrawn.  At the same time, long-term listings increased by around 20%.  In Andalucía, the number of long-term rentals on offer doubled. In fact, I have read of some landlords going from short-term to 5 year contracts just to ensure a tenant and some income. Not all will be out of the holiday sector for that long but I suggest many will not be able to return in time for the 2021 season, if there is one.  If that is the case it is possible that short-term supply will be significantly reduced for at least one season and maybe longer.  As a result, if demand rebounds in the meantime, as I expect it will, short-term landlords could see occupancy levels rise.

Unemployment

As the figures already quoted above show, at the end of 2019 Spain was still a long way behind most of the E.U. and Eurozone in reducing unemployment after the 2008 global crash.  The early predictions for the post-Covid labour market are that most of the progress achieved in the last 5 years will unravel.  As a result, adult unemployment is likely heading back over 20% while in the under-30 age group it could easily be double that.  Inevitably, this will have implications for the domestic property market.  The unemployed and those in job insecurity don’t buy property.  And, as with the collapse of tourism, forced sales may increase as unemployment rises.

The Intractable Problem

Mallorca beach in Spanish Market ReportA real tragedy for Spain is that it seems likely to fall back into a period of very high unemployment.  In 2017 The Organisation for Economic Cooperation and Development (OECD) published one of its periodic in-depth reports on Spain.  While noting improvements in the economy since the previous report in 2014 it highlighted persistent structural problems hindering sustained recovery.  It seems not much has changed.   They were the same issues mentioned in the 2014 report, above all the dire unemployment figures.

The reality is that Spain has never been close to full employment even for adults. For example, when it was the fastest growing economy in the Eurozone in 2007 average unemployment was 8%. That’s a figure most developed countries would consider high in a recession and a catastrophe in a boom.

However, it’s so much worse for young people. Between 1986 and 2019 the average youth unemployment rate was 34.65%, more or less where it is in 2021.  Even in 2007 at the height of the boom it was 17.2% and rose to peak of 55.9% in 2013. (Source: Eurostat) It is quite possible that it could return to a similar level post-Covid. So, in spite of several boom periods in that timeline, Spain has made little progress in improving job prospects for young people.  Poor job prospects and unemployment at the start of a person’s working life have lifelong repercussions on income potential.  Inevitably, such insecurity spills over into the housing market.

Unfortunately, seasonal, temporary and part-time contracts outnumber permanent ones by a big margin. A ratio of 90/10 in favour of temporary and part-time contracts seems to have become the new normal in the Spanish labour market. And long-term doesn’t necessarily equate to full-time, about 40% of permanent contracts are for part-time positions.  One of the reasons for these figures is that tourism is one of the biggest employers in Spain, accounting for about 3m jobs and 15% of the workforce. Unfortunately, jobs in tourism tend to be low-skilled, low paid, temporary and seasonal.  It really is a vicious circle.

Already, the powers that be in Brussels are making noises about linking post-Covid financial assistance to fundamental structural changes in the labour market of the kind noted by the OECD.  However, I seem to remember the same demands being made in connection with the European Central Bank bailout of Spain’s collapsing banking sector in the aftermath of the 2008 meltdown.  What I don’t remember is anything much changing.

The Property Market in Spain in 2020

Santa Cruz de La Palma in Spanish Market ReportSpain’s overseas property market relies totally on freedom to travel and given that was impossible  or severely restricted for most of 2020, I’m surprised by just how good the full-year statistics are. And it wasn’t just that potential buyers couldn’t get to Spain, even if they were already there, provincial borders were closed at times, as were borders between municipalities.

In the event, Spain’s total property market fell from 550,855 transactions in 2019 to 470,749 in 2020, a drop of 14.5%.  Meanwhile, there were 24,772 fewer foreign buyers over the year, down from 2019’s 102,264 to 77,492, a fall of 24.2%.  However, overseas market share held up well, falling from the average of 18.7% between 2012 and 2019 to 16.5%. Even at this reduced level, the overseas sector is still double what is was at the peak of the pre-2008 boom.

As in previous years, just a few regions dominated the market.  For example, 60% of all purchases in Spain in 2020 occurred in the Mediterranean coastal provinces and the Balearics and Canary Islands. These are precisely where the majority of foreign buyers head for.  And it’s been that way for years, right through the post-2008 recovery. It’s because of this that we can say the overseas market is so important in getting Spain’s property market back on track to growth.

The importance of the Overseas Market

One of the most striking features of the overseas property sector during Spain’s long post-2008 recession was how little it was affected by what was going on during the domestic economic meltdown. Indeed, foreign buyers drove the initial recovery of the property market, buying in record numbers and increasing market share from 2012.  I suspect they are going to be just as important in the post-Covid recovery.

For example, at the peak of the property boom before the 2008 crash, foreign buyers never had more than 8% market share.  However, this rose to an average 18.7% share of the overall market between 2012 and 2019. The final 2020 figures show that even with the disruption caused by Covid-19 foreign buyer market share fell only slightly, to 16.5%. As a result, the overseas sector is still twice as large as it was in 2008 and I predict it will recover strongly to new record levels. Of the total 470,749 property transactions recorded by the Notaries across Spain in 2020, 77,492 were attributed to foreigners. 

However, it’s when when you look at the Mediterranean coastal regions and the islands where the majority of foreigners buy that the importance of this sector really shows up. In 2020 the foreign element was 30% in the Canary Islands and 35% in the Balearics.  On the mainland, 30% of buyers in the Comunidad Valenciana were from overseas while in Murcia it was 25%. 

In contrast, the figure for Andalucía was 16%, just about the same as the national average.  However, that changes dramatically when you analyse by province and take a look at Málaga. Here, foreigners accounted for 28% of 2020 transactions. If the other provinces with Mediterranean coastline, that is, Almería, Granada and Cádiz are added to the mix, 70% of Andalucía’s foreign buyers bought in just these four provinces. At the other end of the scale in Jaén, buyers from overseas made up just 4.5% of the overall market. 

And the same dominance of overseas buyers is clearly shown in the figures for the Comunidad Valenciana, which includes the Alicante and Valencia provinces.  These two provinces account for  90% of all foreign buyers in the region. (Source: Mo de Fomento

Foreign Spending Power

Cádiz beach Spanish Market ReportAnd it’s not just the numbers that make foreign buyers so important to the Spanish property market.  They spend more too.  On average an overseas buyer spent €1,777 while in contrast, the average spent by Spanish buyers in 2020 was €1,439. The difference would have been much greater but was reduced by the 7,526 Moroccan buyers whose average spend was only €635 per square metre.

However, the spending power of foreign buyers is further underlined when you look by nationality.  For example, Swedish nationals spent €2,530 per square metre. They were 2020’s big spenders, taking over from US buyers, the previous year’s winners.  They dropped to third place with an average spend of €2,268 pm2, while the Germans held on to second place (€2,433).

In addition, the per square metre price paid by foreigners was even higher in the overseas sector hotspots. For example, in the Balearics the average paid by an overseas buyer in 2020 was €3,353 per m2, €2,023 in Cataluña, €1,804 in Andalucía and €1,877 in the Canaries.  Nevertheless, in two Mediterranean coastal regions it was lower than the domestic average; €1,360 pm2 in the Comunidad Valenciana and just €985 pm2 in Murcia. 

The Nationality League Table

The 2020 league table of buyers by nationality had a familiar look to it.  In spite of Brexit and a rubbish exchange rate, the British, as ever, were the most numerous with a total of 9,783 purchases.  That represented 12.6% of the total foreign market, only slightly down from 13% in 2019. However, they bought 79% of the total for German and French purchases combined.  And  British, French and German buyers account for 29% of the whole overseas market.

In addition, when. you consider the regions most popular with foreign buyers the British took a much bigger share of the overseas market.  For example, 25% of foreign buyers in Andalucía were British, and over 50% in both Murcia and the Comunidad Valenciana.

The Property Market in 2021

The big question is, of course, where do we go from here? Assuming vaccination programmes roll-out across the world and international travel can resume how likely is it that the Spanish property market will bounce back? So an important question is why do so many international buyers choose Spain?

Why Spain?

gran canaria villaFor lifestyle Spain is hard to beat, it’s relaxed and easy-going, safe and child-friendly.  Life expectancy rose by ten years between 1970 and 2015.  At 80yrs for men and 85yrs for women Spaniards have the highest life expectancy in the EU and third worldwide.  Only Japan and Switzerland do better and then only by a few months.

The climate suits all tastes. It ranges from four seasons with a proper winter and lots of snow in the north to the sub-tropical south.  The micro-climate zones on the Mediterranean coasts of Andalucía have the best winter temperatures on the European mainland.  In addition, The Canary Islands are often referred to as Europe’s Caribbean. Spain’s beaches and marinas have more Blue Flags than any other country in the world, a total of 692, 23 more than in 2019.  And in fact, Spain has occupied the top spot ever since the scheme began in 1987.

For the cultural tourist Spain has some of the oldest cities in the world and 47 UNESCO World Heritage sites.  This puts it in third place globally, behind Italy (54) and China (53).  Within Spain, Andalucía is the region with the highest number (8) of recognised sites.  The latest one to be be awarded UNESCO status was the Medina Azahara near Córdoba in 2018.

Living well is affordable with food and drink prices below the E.U. average according to Eurostat. Spanish cuisine is world-class. Spain has three restaurants listed in the top ten restaurants in the world, more than any other country.  And there’s a total of six in the top fifty.  Sports and outdoor enthusiasts are spoilt for choice.  Golf, tennis, equestrianism, skiing, wind & kitesurfing, mountain biking, rock-climbing, hiking, fishing – the list goes on and on.  The result is that Spain has a quality of life that’s hard to beat, appealing to both foreign second home owners and permanent residents.  None of what has persuaded millions of foreign buyers to choose Spain in the past has changed.  The sun is definitely still shining

2021 Predictions

calpe rock and beachThroughout 2020 and early 2021 I was pleasantly surprised by just how well demand held up.  In fact, enquiries for our property finding service have been running well ahead of 2019, to the extent that I would now say there is a pent-up demand just waiting to get going.  I’ve no doubt that some buyers have either put their plans on hold or abandoned them altogether.  On the other hand, many people I’ve spoken to during the various lockdowns have opted to bring forward their plans to buy in Spain.  It’s almost as though the pandemic has focused their minds on future plans and there seems to be a ‘let’s get on with it attitude, why wait’. 

And there’s no doubt in my mind that with the ‘work from home’ option becoming a reality for many more people post-Covid, the home will be in Spain.

However, many enquiries indicate buyers are expecting, or perhaps hoping for, steep price falls in 2021, similar to the carnage seen post-2008.  I think they will be disappointed.  Looking  back to the 2008 – 2013 period, it seems to me that there were three conditions that amalgamated into a perfect storm.  First, there was a complete collapse in demand.  It just evaporated, virtually overnight. Secondly, the supply side was awash with unsold property.  For years Spain had been building more units per year than the UK, Germany and France combined, speculative development of poor quality and in dodgy locations.  And thirdly, the property boom had been fuelled by a credit bubble which included 100% mortgages.  The result was that many buyers in the boom were cash-poor and could only buy by borrowing high.As far as I’m concerned, none of these conditions apply today.

When that bubble burst and prices collapsed many owners became forced sellers very quickly.  In addition, reckless lending by banks with minimal checks on financial status meant many sellers had little equity in their property. As a result, they did not have the luxury of sitting the crisis out, they just had to divest as quickly as possible.  Furthermore, the Spanish mortgage market virtually disappeared as Spanish banks were drowning in toxic debt and the banking sector went into a full-blown crisis. Only a €100bn bailout from the European Central Bank saved it.

How it is today

I’ve already mentioned that in our experience the demand is there, just waiting for the lights to go green.  As regards the supply side, although building licence approvals did rise between 2015 and 2020, the rate of increase was slowing even before the arrival of Covid. The fact is that Spain’s residential building sector is still 90% smaller than it was previously. And in the case of the supply of secondhand properties of top quality and in prime locations, if anything there has been a shortage throughout the recovery period.  In addiiton, overseas buyers can easily access a Spanish mortgage today although much larger deposits are necessary as the typical LTV is 60%-70%. Consequently, most recent buyers have been cash-rich and have a lot of equity in their property.

As a result, I am not expecting to see any sharp reversal of prices in 2021, at least not across the board.  Of course, there will be some forced and motivated sellers, it’s inevitable.  However, I think it will be on a case-by-case basis rather than a wholesale dumping of stock.  Finding out the reason behind a sale will be an important part of our work in 2021.  And where prices do fall, I think they are more likely to be in the new-build sector.  In my view, new-build prices were already unsustainable and completely out-of-sync with the overall market and it may be that the pandemic will be a turning point.

New-Build Demand

infinity swimming pool costa tropicalFor reasons I have never quite understood, foreign buyers are like moths to a flame if new-build is available, even when the location is inferior. The fact is there is very little raw building land available in the very best locations, it was built on years ago.  Consequently, it follows that much of the new-build activity is not in prime locations.

In addition, since the recovery started the supply side of new apartments and houses lagged way behind demand. Inevitably, this supply side imbalance skewed new-build prices.  However, as new project numbers rose every year between 2013 and 2020, there were signs that new-build prices were coming under pressure.  Indeed, even before COVID-19 arrived I thought 2020 would give some developers quite a shock. Already, there were rumours circulating of delaying the launch of new phases as sales slowed. However, the supply side of the equation may be further complicated post-Covid by the fact Spain’s first lockdown resulted in the freezing of 14,400 units under construction by 184 developers.  And that was just by the end of March 2020.  Inevitably, that figure will have risen as the pandemic continued.

And I fear for those buyers who bought off-plan at inflated prices prior to 2020.  In these circumstances even a modest price correction will mean that their property will be worth less than they paid for it by the time they move in. I accept that many buyers are not looking to make a huge profit in the short-term, they’ve made a life-style purchase. However, I’ve yet to meet one who is happy with the idea of a loss even before they’ve got the keys. In fact I think some buyers have been paying such inflated prices for new build properties that they may never see a return on their investment no matter how long they hold it.

Resale Demand

In contrast, lack of well-priced, top quality properties in prime locations means buying right is more straightforward.  However, available stock is more in balance with demand and there can be competition for a good property.  And there’s no sign that buyers in the resale sector are prepared to pay excessive asking prices.  In my experience they are much more likely to walk away than overpay.   I estimate prices pre-Covid resale prices had recovered about 30% of what was lost in the crash. However, that still puts prices as much as 25% below the previous peak in 2007.  Look hard and there are still good deals available.

However, I have a problem with many asking prices.  I feel sellers assume that just because new-build prices have gone through the roof they can ramp up their asking prices to similar levels.  That assumption is incorrect in my view. As I started a search for a client at the beginning of 2020 I noticed that every house under consideration had been reduced from the original asking price.  In some cases, reduced several times and by as much as 25%.  And I’m talking about top quality in the very best locations.

Interestingly, a report from Tecnocasa, one of the big valuing companies in Spain, suggests asking prices are, on average, at least 20% above the eventual price achieved.  When over-optimistic sellers reduce asking prices to more in line with what the market can stand, they sell.  And in price per square metre terms that will be way below new-builds prices.  However, I am already seeing lots of price reduced properties in my inbox so perhaps Covid-19 will be a turning point, bringing more realistic asking prices.

Fixed Rate Mortgages

Marbella villaI mentioned earlier that, in general, Spanish banks are now keen to lend to foreign buyers.  However, It’s a fact that the majority of all overseas buyers in Spain since the property crash have been cash buyers. They needed to be; the Spanish mortgage market barely existed for several years. Certainly, the majority of our recent clients haven’t needed a loan in order to buy.

In spite of having sufficient funds to buy without a loan, many decided to take a mortgage due to the availability of long-term, fixed-rate Spanish mortgages. This type of loan disappeared completely during the banking crisis but the extended period of negative Euribor means over 40% of Spanish mortgages are now fixed-rate and not variable. 

Euribor is the interest rate which fixes most Spanish mortgages and it has been in negative territory since February 2016.  After rallying very slightly in 2019, although still negative, we are back to historic lows.  Euribor ended 2020 at -0.495%.

Buying Right in 2021

a windy tarifa day with kitesMy advice to potential buyers in Spain is the same as always. The location must always be key.  Shiny new stuff, whether is a house or an apartment, something on the coast or in the country, never trumps location.

The fact is that at the pre-2008 peak €6,000 per square metre bought the very best locations and quality. In my view, 2020 resale prices should be at least 25% below pre-crash levels to secure a sale.   However, buyers were already paying more than that per square metre pre-Covid just to get their hands on a new property.  In some cases the new-build premium has been as much as 50% above the equivalent resale price.

Now, I’ve worked in the Spanish property market for many years and been through a few high/low cycles. The fact is that I can’t remember such a discrepancy between new and resale prices.  As I’ve already mentioned that I consider new-build prices more vulnerable to downturn because they were already inflated.  Perhaps that will shrink the discrepancy between new-build and resale prices pm2. However, that will be because new-build prices retreat, not because resale prices increase markedly.

However, if you buy at the right price, Spanish property is still relatively affordable. There’s potential for substantial capital growth in the medium term and excellent rental yield potential. The sun continues to shine and the quality of life is rated one of the best in the world.  What’s not to like?

The lack of high-quality inventory at the right price in prime locations will continue to be an issue.  As I’ve shown in this report most activity by overseas buyers occurs in a handful of locations. The 6 main destinations in Spain for overseas buyers are Andalucía, Cataluña, Murcia and the Comunidad Valenciana (comprising Castellón, Alicante and Valencia provinces) on the mainland, plus the Canary and Balearic Islands.  In normal times together they account for 65% of the overseas market and 14% of the total Spanish property market.

My advice to buyers in 2021 is do not obsess about new-builds, especially if not located in prime positions.  Many are not.  Consider equivalent resales, calculate the price per sq.m. to include any renovation if it’s needed.  Then you can take an informed view on what makes the best financial sense. The result will almost certainly be a lower price, a bigger property and, most important of all, a superior location.

Don’t buy anything that is blighted.  Roads tend to get busier over time so if it’s noisy now it will only get worse.  If there is a mobile mast in view assume there will be more as the tendency is for them multiply.  Electricity pylons are also a big no-no.  We can assume new housing will increase in the long term.  So it’s essential to be aware of local planning issues and what might be in the pipeline.  Already, in some areas I could count twenty cranes while standing still.  If there is vacant land nearby find out with absolute certainty what, if anything, can be constructed. The selling agent saying it is green zone is just not good enough.  Why risk losing a fabulous view?

And finally, when I am assessing properties for my clients I always ask the following questions.  If circumstances change and they need to sell quickly is the price right to enable them to do that?  Secondly, is this a property for which there will always be demand irrespective of market conditions?  One thing is certain; there will always be demand for top quality in prime locations. It always has been, still is and always will be about location and that will be more important then ever after the disruption of 2020.

Without doubt 2021 is going to be an interesting year in Spain’s’s overseas property market.   Personally, I think overseas demand will remain strong in all the traditional prime locations. In addition, in my opinion new-build prices have risen too fast and supply of resale top quality in prime locations is limited. Over-supply of new-build may lead to prices edging downwards.  In contrast, lack of supply of quality resales may lead to competition between buyers and firmer prices. Obviously, the impact of Covid-19 and the consequences for the property market are unknown.  However, foreign buyers drove the initial recovery of the property market after the 2008 crash, buying in record numbers and increasing market share from 2013.  I suspect they are going to be just as important in the post-Covid recovery.

©Barbara Wood

I update this Spanish Property Market report throughout the year as new data becomes available.  You can also follow us on Twitter and Facebook for the latest news as it happens.

Click on any of the images to open the gallery and see  larger versions and find out where they are.

For more detailed information about the regions we operate in go to our Location pages: Andalucia, Barcelona, Canary Islands, Valencia, Costa Blanca & Murcia, and Mallorca.

Click here to download and save the Spanish Property Market report as a pdf.

From the Blog

Overseas Property Market in 2020

Full year results for overseas buyers in Spain in 2020. In spite of travel restrictions nearly 80,000 international purchasers bought a property in Spain in 2020. Read the breakdown in detail.

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