Loads of demand for property in Spain in 2022.
Prices in the Spanish property sector too are increasing.
It has been an unusual couple of years in the property sector in Spain!
Last year, 2021 there were 100,000 housing starts. That is similar to pre-pandemic figures. It is true that pre-bust figures were closer to 750,000 new builds per year, but setting that aside, the new development rates are quite high.
It is untrue to say that there is a lack of quality new property, the problem is that it’s selling fast. People love new developments and being the first person to ever turn the key in the door.
We can easily answer the question as to whether or not this is a bubble. It is not a bubble as people are moving here due to lifestyle reasons. Back in Comaskey Properties, we used to say to our potential buyers “if not now, then when?”. Well, it appears that for many British people, the when is now. British buyers in Spain still are the most prominent but Russia, Scandinavia, Belgium and Ireland are still producing property buyers.
Another thing that helps the market keep a level head is that the 90% LTV mortgage has disappeared. Banks are still offering 50% LTV finance. This sort of responsible lending is unlikely to get us into a really heated market scenario.
Since summer 2021 both home sales and mortgages have reached levels not seen in more than a decade.
Brexit and Covid are pushing people to move to Spain sooner than planned.
In an opinion that is widely shared by market analysts and academics, house prices in Spain will rise again. The market is not overheating Tokyo/Dublin style, it is simply a buoyant market.
The ECB (European Central Bank) has spoken about the sector’s “exuberance”; it feels like they are not in any way worried about crazy price shifts in Spain.
The INE (National Statistics Institute) will publish the official data in March, but it looks like prices have certainly increased in Spain. The annual growth rate up to the third quarter stood at 4.2%.
CaixaBank’s more conservative research quantified the average rise in property prices in Spain in 2021 at 1.9%. They suggest that the rate will double and reach 4% in 2022.
I think a trick they are missing is that so-called “Foreign areas” like Alicante, Costa Del Sol, Mar Menor etc are seeing even bigger increases. As there is no such geographical area as a foreign buyer region, it is hard to predict how much prices in geographically diverse areas like La Zenia, Denia and Malaga will soar.
The US banking supervisor has spoken about an “exuberance indicator” and inflation running at 7%. The Netherlands, for example, certainly has a housing market that is out of sync.
A recent study of 25 countries says that Spain is the second farthest from this dangerous predicament of housing costing more than 35% of household income, behind South Africa.
Once again this study did not take into account the obvious variant. Foreigners, Scandinavians especially, are really taking advantage of the hot desk phenomenon. Earning Stockholm wages, while enjoying a Spanish cost of living and relaxed lifestyle appeals to our Swedish friends!!
If you are thinking of selling your property in Spain please come and talk to us. It is a great time to take advantage of this hot market!
Adam Cook; 0034 727787419