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Spanish Property Market 2022

Click here to download and save the Spanish Property Market report as a pdf. Click on any of th eimges to open the gallery to see larger versions and find out where they are.

This report will be updated as we head into 2023 but in the meantime I have covered the major statistics we have for 2022 so far in this blog.

Introduction

Spain mapAfter a second year disrupted by the Covid-19 pandemic the Spanish Property Market might be expected to be on its knees, particularly in respect of overseas buyers given the travel restrictions that applied for most of the period. However, when we look at the most recent statistics a very healthy scenario emerges. Surprisingly, in spite of the problems caused by the pandemic transaction numbers  are reaching record highs. In addition, the statistics show that prices have risen during the pandemic particularly at the upper end of the market in the most prime locations of the overseas sector.   

When I wrote this report at the beginning of 2022 I said the way in which overseas purchasers continued buying property in Spain in 2021 allowed for a degree of optimism for 2022. My own view was that the overseas sector of the market would have a good year, not in spite of the pandemic, but because of it.  Now we have the official notary statistics for the 1st half of 2022 in respect of overseas buyers it’s clear that my optimism was not misplaced. In the 1st half of 2022, there were 72,987 overseas buyers. To put that in context, the previous best 1st half was 53,427 in 2018, so this year’s figure is up on that 36.6%.  It seems safe to say that wherever the Spanish Property Market is in 2022 it most certainly isn’t on its knees. The reality is that it is thriving. 

Where the numbers come from

The Notaries are my preferred source for a straightforward count of transactions numbers with breakdowns by nationality, autonomous regions and prices per square metre.  These are published half-yearly We get Q1 and Q2 in October of the same year and Q3 and Q4 in April of the following year. Once we saw the 2021 full year statistics  for 2021 it turned out it was the best year on record, and by quite a margin. Now we can see that 2022 has experienced the best 1st half in terms of international buyers on record. As a result, it is clear the Spanish Property Market is well on the way to another all time high of overseas purchasers in 2022. You can read my blog with lots more information about the latest statistics here.

In addition I analyse Ministry of Development (Ministerio de Fomento) statistics for breakdown by province and municipality. However, they do not count by nationality, foreign buyers are counted as a block, 

In my view, stats from the Property Registries can be 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.

In general, I will make limited reference to 2020 statistics throughout this report because I don’t think they tell us much.  However, I will incorporate some from 2019 if relevant as they indicate how the market was pre-pandemic.

 I update this report regularly throughout the year and I also blog and post on social media with news and views so do make sure to follow us.

To understand where the property market is it helps to know where it’s come from so I’ll start with a brief resumé.

Where we were 

Spanish Market Report Puerto Mogan Gran CanariaAt the peak of the Spanish Property Market bubble which burst as a result of the 2008 global crash the highest market share attributed to overseas buyers was 8.9%. For several years prior to the crash Spain had constructed over 800,000 new units per year, more than the UK, France and Germany combined.  The market was fuelled by cheap credit and speculation and the bubble was always going to burst at some stage. The global meltdown just helped it on its way.  

Growth in the overseas sector got going again in 2012 and numbers have increased every year since. In contrast, the domestic market continued to shrink until 2014, by which time it was 60% smaller in transaction terms than at the peak. 

However, after 8 years of sustained growth by the end of 2019 overseas buyer market share had more than doubled to 19% of the overall market. Indeed, it had been hovering around the 20% level for several years.  Furthermore, in terms of overseas buyer numbers this sector of the market was 77% bigger than at the pre-2008 peak. In contrast, the domestic market experienced a much slower recovery over the same period. When Covid-19 arrived Spain’s domestic property sector was still 40% smaller than it was a decade before.

The Spanish Property Market Needs Overseas Buyers

So, whether you look at transaction numbers or market share it’s clear international buyers are an important part of the overall Spanish Property Market.  For the three years prior to the pandemic the number of overseas buyers had topped 100,000.  That barrier was broken in 2017 (100,116), the all-time record of 103,677 occurred in 2018 before falling back slightly in 2019 to 102,264.  However, the 2nd half of 2019 was the best 2nd half year on record with 50,534 foreign buyers so the overseas sector was looking good going into 2020.  And indeed, Q1 of 2020 was very active. Then the pandemic arrived.

Before starting to dig into the statistics and apply them to the property market and related issues it’s perhaps worth taking a look at why Spain is such a draw for so many overseas buyers.

The Overseas Property Market – Why Spain?

For 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.  Even warmer winter temperatures are found in the Canary Islands which are often referred to as Europe’s Caribbean. Spain’s beaches, marinas and tourist boats have more Blue Flags than any other country in the world, a total of 729 in 2022, an all-time high.  And in fact, Spain has occupied the top spot every year since the scheme began in 1987.

For the cultural tourist Spain has some of the oldest cities in the world and 49 UNESCO World Heritage sites.  This puts it in third place globally, behind Italy (58) and China (56).  Within Spain, Andalucía is the region with the highest number (8) of recognised sites. 

Living well is affordable with food and drink prices below the E.U. average. (Source: Eurostat). Spanish cuisine is world-class. Currently Spain has 2 restaurants listed in the top 10 in the world and 5 in the top 20, more than any other country. 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 property buyers to choose Spain in the past has changed.  The sun is definitely still shining.

The Missing Overseas Buyers 2020/21

Puerto Banus Marbella Spanish Market ReportThe full-year 2020 statistics showed a total of 77,496 overseas property buyers.  If we take an average count of overseas buyers in the 3 years before the pandemic arrived it shows about 25,000 foreigners who could reasonably have been expected to buy in 2020 didn’t.

Travel restrictions continued for the 1st half of 2021 and the statistics from the notaries for that period means we can estimate about 30,000 overseas buyers went missing between March 2020 – June 2021. This covers the period when lockdowns and travel restrictions were at their peak.

As I’ve already noted, the notaries’ statistics are compiled half-yearly so there is always a long wait to get the full-year figures. We now have those numbers. When I wrote this report at the start of 2022 I predicted a surge of oversea buyers between June and December 2021 as travel restrictions eased. Turns out I was right.  In fact, the surge was so strong 2021 turned out to be an all-time record year for overseas buyers.

Catch Up Plus New Demand

The notaries counted 111,743 foreign buyers in 2021, that was 17.4% of the total Spanish property market.  This compares with the previous annual record of 103,677 in 2018.  In terms of 2nd half year results, which are usually weaker than 1st half,  2021 beat the previous best 2nd half on record (2019) by 26.5%.

However, what we can’t tell from these statistics is how many of the 111,743 overseas buyers in 2021 were some of the missing 30,000 and how many were new to the market. Certainly the market feels very busy and in my view that’s because a surge of buyers have entered the market more or less at the same time on top of normal new demand. 

Some are playing catch-up from the lockdown and travel restricted periods. But for that they would have been part of 2020 and 1st half 2021 statistics. This surge has definitely created a supply-side deficit, above all in the resale sector in prime locations. In addition, in my opinion the market is showing signs of higher than normal new demand. Some buyers tell us they are bringing forward their plans to buy in Spain.  And while some are looking for a second home we are also seeing buyers looking at a Spanish property as a possible ‘work from home’ base.

I think a key question for the remainder of 2022 and beyond is whether this post-pandemic surge is likely to continue.  I think it is and will mean the supply-side deficit already a big factor in prime areas is not going to end any time soon.  The average yearly total of overseas buyers in the 3 years 2017 –  2019 pre-pandemic was 102,000. With 2022’s final total of 111,743, we seem to have recovered about 9,000 of the 30,000 foreign buyers absent during the pandemic’s lockdowns.  So, if the market still has to absorb approximately 20,000 buyers, on top of normal new demand, that is bound to have an impact for several more years.

The Nationality League Table

Amazingly, even though travel to Spain was severely restricted for UK residents throughout the 1st half of 2021 and for most of Q3 as well, the British still managed to beat both the Germans and French in deals done in 2021 although not by the usual wide margin. Nevertheless, 11.8% of all foreign buyers in 2021 were British. The British (12,186), German (10,868) and French (9,047) combined accounted for 28.7% of all overseas property buyers in the period.

Foreign Spending Power in The Spanish Property Market

Mallorca beach in Spanish Market ReportAnd it’s not just the numbers that make foreign buyers so important to the Spanish Property market. They spend more too. Typically, foreign buyers pay more per square metre than the average for domestic buyers. For example, the average spend by a foreign buyer in 2021 was €1,939 per m2, almost 30% higher than the domestic average of €1,503. 

So it’s encouraging that these latest statistics show this trend is continuing. Anyone involved in the property market in the overseas sector could sense prices rising during 2021 and now we have the proof. If we define the overseas market hotspots as the mainland Mediterranean coasts plus the Balearic and Canary Islands the average price per m2 paid by foreigners in 2021 rose in all of them. Andalucía experienced the highest year-on-year rise in prices, up 11.5%, followed by the Balearics, up 10.1%.  

The fact that the biggest rises were in two of the most expensive locations for overseas buyers also provides evidence that much of the activity in the overseas sector is at the top end of the market.  

However, locations within the hotspots vary at lot. For example, in the Balearics the average paid by an overseas buyer in 2021 was €3,688per m2, more than double the national average paid by domestic buyers, while €2,110 in Cataluña, €2,010 in Andalucía and €1,999 in the Canaries.  Nevertheless, in two Mediterranean coastal regions it was lower than the domestic average; €1,446 pm2 in the Comunidad Valenciana and just €973 pm2 in Murcia

The Spending League Table

And the spending power of foreign buyers is further underlined when you look by nationality with some spending much more than others.  For example, Swedish nationals spent an average €2,768 per square metre in 2021. The Danes were in 2nd place on €2,714, pushing the Germans into 3rd spot, but only just. The average German spend was €2,708 and €2,430 from the US.  In contrast, Moroccan buyers averaged €654 per square metre.

The Overseas Buyer Hotspots

 Santa Cruz de La Palma in Spanish Market ReportI think these 2021 statistics clearly demonstrate how much the Spanish Property Market needs a healthy overseas sector. However, they also show that overseas buyers have even more clout in just a few locations. For example, in pre-pandemic 2019 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%. These figures are way ahead of the 19% market share attributed to the total foreign market in 2019.  

I’ve already mentioned that foreign buyers accounted for 17.04% market share in 2021. However, when you look more closely at the statistics and analyse those for Andalucía, Cataluña and the Comunidad Valenciana (the provinces of Castellón, Alicante and Valencia) on the mainland, plus the Balearics and Canary Islands some regions really stand out. For example, in the Balearics overseas buyers made up 41.1% of the total market in 2021 and 32% in the Canaries. The Comunidad Valenciana was also above the national average with foreign buyers accounting for 19.2% of all purchases in the region. 

The reality is that separating out the 2021 stats for the Spanish Property Market hotspots shows that 2 out of every 3 foreign buyers spent their money in these 5 regions.  Consequently, of the 111,743 purchases by overseas buyers in 2021, 74,245 (66.4%) occurred on the Mediterranean coasts or in the Islands, accounting for 12% of the total property market in Spain.  

However, in 2 of the hotspots the foreign buyer market share was slightly below the national average of 17.04%, 16.8% in.both Andalucía and Cataluña.  To make sense of these figures it helps to delve further into the statistics and look at what is happening in different provinces and municipalities in the various autonomous regions.

The Regional Hotspots of The Spanish Property Market

Cádiz beach Spanish Market ReportIt’s clear that some places are powering ahead of others with demand out stripping supply leading to rising prices while the market is flat is others.

A good example of this is Andalucía.  Not only is it Spain’s largest autonomous region it is one of the most varied. It has both Mediterranean and Atlantic coasts, a huge, mountainous interior and 5 of Spain’s most historic cities; Cádiz, Málaga, Seville, Granada and Córdoba. In addition, this one region accounted for 20.5% of all property transactions in Spain in 2021. So, in property terms it really has something for everyone but foreign sector activity is far from evenly spread. In reality it is actually concentrated in just a handful of locations.

I noted earlier that in 2021 foreign market share of the total Spanish property market was 17.04%, with Andalucía slightly below that on 16.8%.  However, Andalucía has eight provinces and it turns out that 29% of all transactions occurred in just one province, Málaga, which really means the Costa del Sol.  And when you drill down to the municipal level it gets even more unbalanced.  In the event, 45% of all transactions in the province occurred in the municipalities of Málaga city, Marbella, Benahavís and Estepona.  So, almost 30% of all purchases in Andalucía occurred in just 1 of the 8 provinces and nearly half of purchases in that province were in just 4 of the 208 municipalities in the province.

These 4 municipalities are, of course, the most expensive in Málaga province, another indicator that it’s the upper end of the property market that is most active. Therefore, it seems a really smart move by the Andalucían regional government to make a temporary reduction of purchase tax permanent.  Although all buyers in the province will benefit those benefits increase at the higher price levels. I explain the details in this blog.

The dominance of just one province is even more extreme in Cataluña with 64.5% of all 2021 purchases in the autonomous region occurring in just 1 province, Barcelona.  It’s no accident that the most active provinces in both Andalucía and Cataluña are those with the highest number of foreign buyers. And looking at the Comunidad Valenciana, 69% of all foreign buyers in this region bought in just 1 province: Alicante. (Source: Mo de Fomento)

Tourism and Rental Demand

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.

It’s not worth even mentioning 2020 tourism totals. However, there is a link between visitor numbers and the property market and that’s because of rental demand from the approximately 35% of Spain’s foreign visitors who 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. In addition, many domestic tourists from within Spain rent privately.   

As a result, rental yields make letting a property in Spain an interesting option. And not just for the buy-to-let investor. Although not all foreign owners are also part-time landlords many are. They rely on rental income to cover essential maintenance and running costs and taxes. Obviously there a lot of variables but the best gross yields can be as high as 10% and sometimes even higher for a large, top quality detached house a in prime location. Apartments and townhouses near the beach can return 6% – 8% gross, assuming a luxury interior.  Typically, a quality property 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.

Tourism in 2021

gran canaria villaAlthough not quite as big a catastrophe as 2020 it was still dire.  Nevertheless, once travel became easier in the 2nd half of the year there was a bit of a surge, particularly in Q4.  The total for 2021 was 31.1m international visitors, numbers similar to those last seen in the 1960s. Nevertheless, top quality properties in the right locations were fully occupied in the high season months.  However, as I have already discussed in respect of property purchases, most activity was seen at the very top of the rental market. Properties priced at €10,000 – €20,000 per week had no trouble in finding tenants and high season weeks were fully occupied. 

The Rental Market in Spain 2022

I’ve already touched on the issue of rental yields in the section on tourism above. However, until we see how freely we can travel in 2022 we have no idea how those yields might be affected.  However, 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.  

However, several property portals. such as Fotocasa and Idealista, reported after the first lockdowns that many short-term listings had 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 those that are locked into 5 year contracts may have no option.  If that is the case it is possible that short-term supply will be significantly reduced for several seasons to come.  As a result, if demand rebounds in the meantime, as I expect it will, short-term landlords could see occupancy levels rise.

Who Is Buying What

New-Build Demand

calpe rock and beachFor reasons I have never quite inderstood, foreign buyers are like moths to a flame when it comes to new-build properties, 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. It’s worth remembering that Spain’s construction sector virtually disappeared post-2008 and, even today, is still 90% smaller than it was at the peak of the pre-2008 building frenzy.  Inevitably, this supply side imbalance skewed new-build prices.  However, as new project numbers rose there were signs that new-build prices were coming under pressure. Indeed, even before COVID-19 arrived there were rumours circulating of new phases being delayed as sales slowed. 

I think most at risk are 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 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. The fact is that I have never seen such a discrepancy between new-build and resales prices as exists in the current market.

Resale Demand

In contrast, lack of well-priced, top quality resale properties in prime locations means buying right is more of a challenge than previously.  This sector is, of course, still the largest in the Spanish Property Market, and by quite a margin. The ratio is about 10:1 in favour of resales across the whole market, with some variability between regions.  Given rising demand,  one big change is that increasingly there is often competition between buyers for a good property in the right location. In addition, whereas in 2019 I would have said buyers were more likely to walk away from a purchase than overpay lack of stock in 2022 is ramping up the pressure on buyers.

Buyers should be prepared to move quickly to secure properties in prime locations. In Q4 of 2021 one of our clients succeeded in buying a property even before it came on the market because I had done all the research in advance and he already had approval in principle for finance.  Being a large property 200m from the beach there would have been serious competition once it was openly available. Instead of which, no local agent even knew it was for sale and our client got a clear run at it

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.  Interestingly, a report from Tecnocasa, one of the big valuing companies in Spain, suggests resale 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. Buyers in the resale sector should consider 3 possibilities if they see a reduced asking price. First, it was over-priced at the outset. Secondly, the location isn’t the best. And thirdly, the seller may be desperate.  Always make price per square metre comparisons, rather than just look at the asking price.

Buying Right In 2022

infinity swimming pool costa tropicalMy advice to potential buyers in Spain is the same as ever.  Location must always be the key consideration.  Shiny new stuff, whether is a house or an apartment, something on the coast or in the country, never trumps location.  My advice is always to get the location right and then do the best with the available budget. I am already seeing clients whose budget is being squeezed because prices have risen opting to lower their property expectations rather than compromise on location.  In my view, that is always the best decision.

The fact is that at the pre-2008 peak €6,000 per square metre bought the very best locations and quality. However, buyers were already paying more than that per square metre pre-Covid just to get their hands on a new property in a less than prime location. In some cases the new-build premium has been as much as 50% above the equivalent resale price. 

I’ve worked in the Spanish property market for many years and been through a few high/low cycles.  However, I have never seen such a discrepancy between new and resale prices.  In Q4 of 2021 I was able to find several properties for various clients, all in the very best locations, for €3,500 – €4,500 per square metre. In all cases they were resales, not new-builds.  In the case of brand new or a recent renovation the most expensive properties I shortlisted for clients in 2021 were around €6,500 pm2.  Why some buyers are persuaded to pay more than these levels in secondary locations is a mystery to me.

As I’ve already mentioned that I consider new-build prices more vulnerable to downturn because they were already inflated.  On the other hand, lack of prime located quality properties in the resale sector is putting upward pressure on prices and I think that pressure may increase during 2022. This could well be the year the discrepancy between new-build and resale prices pm2 shrinks.

Nevertheless, 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?

Location, Location, Location

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 2022 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 can 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 the pandemic.

Conclusions

Marbella villaThroughout 2020 and early 2021 I was surprised by just how well demand held up. In fact, enquiries for our property finding service have been running well ahead of pre-pandemic levels. 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, that home will be in Spain.

However, many enquiries indicate buyers are expecting steep price falls in 2022, similar to the carnage seen post-2008.  I think they will be disappointed.  Looking  back to the 2008 – 2013 period, 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, 1.5 million units at the worst of the crisis. 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 or no 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. Consequently, most overseas buyers in the last decade have been cash-rich.

Prices – Up or Down?

a windy tarifa day with kitesI think this report has shown that in the prime locations in the areas most overseas buyers head for the market is doing just fine.If demand continues at the level we’ve seen in 2021 then 2022 is looking good.  However, if I’m right and the high level of activity in 2021 was, in part, due to many of the 30,000 missing buyers from 2020/21 entering the market at the same time then I would expect that effect to dissipate during 2022 and we may enter a calmer phase. 

I’m sure 2022 is going to be an interesting year in Spain’s’s overseas property market. If it’s the year the Covid pandemic dies out then it could get even more interesting. Personally, I think overseas demand will remain strong in all the traditional prime locations. In addition, in my opinion over-supply of run-of the-mill new-build may lead to prices edging downwards. In contrast, lack of supply of quality resales will lead to competition between buyers and rising prices. Obviously, the impact of Covid-19 and the consequences for the property market are still unfolding.  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 from 2022.

©Barbara Wood

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

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

Here’s my recent blog with the overseas property market statistics we have for 2022 so far.

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.

 

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