Spanish property market report – what to note when looking at Spanish property for sale
Figures from the Spanish Ministry of Housing indicate the average price of a Spanish property increased by 12% in nominal terms last year.This means the average asking price of Spanish property for sale is now €1,888 per square metre, up from €1,685 per square metre. On the surface this is good news for anyone looking to buy Spanish investment property.
Once adjusted for inflation, the real increase of Spanish property prices was 8.1%. Spanish economic growth over the past decade has been intrinsically linked to the real estate boom. The government figures suggest the Spanish property boom is slowing down gradually, avoiding the crash landing they fear so greatly.
What next for the Spanish Property market?
Forecasts for 2006 showed the price of Spanish property for sale increasing by between 5% and 10% in nominal terms.
If you are looking at buying Spanish property and are studying market forecasts you should always keep in mind the fact that prices vary significantly between different regions. The largest rise (22.4%) took place in the province of Ciudad Real in Castilla La Mancha, whilst Ourense (Galicia) recorded price growth of only 3.5%.
Areas where foreigners are interested in Spanish property for sale proved to be amongst the best performing although there are also very specific issues that those regions face. Rising prices over the past five years mean speculators and investors are largely looking elsewhere for Spanish investment property.
There was a massive growth in house building over the past five to 10 years and as a result there is a glut of Spanish property for sale in many popular areas. Very often the quality and location of these developments has been questionable and off-putting for many hopeful of snapping up Spanish property for sale.
Although interest rates remain low they have risen recently which may prevent some people from being able to buy. Some overseas buyers hoping to enter the Spanish investment property market bought at an inflated price which locals cannot afford and, as a result, have negative equity. A combination of these factors has caused many Spanish property experts to question the government projections.
I was looking at Spanish investment property but should I be worried about the market?
Areas set for low rises tend to have large-scale developments of mediocre Spanish property for sale flooding the market. There is still Spanish investment property available in several areas with a new emphasis on quality and location.Speculators are always on the lookout for the next big thing and are still buying Spanish property although their focus has shifted.The Balearics and Canaries, which avoided the crazy building policies adopted elsewhere, are holding up well to the shifting dynamic of the Spanish property market. On the mainland, prices are rising in many areas of Spain’s interior whilst properties in the cities of Barcelona, Seville and Valencia are selling well.
Millions of foreigners still dream of buying Spanish property and beginning a new life. It may be that they increasingly head for areas outside the traditional holiday home regions and look at the market less in terms of Spanish investment property.
