Given that the Spanish and wider Eurozone economies continue to operate as forecasted and approved mortgages continue to be obtainable, the majority of sales will be for resale properties and 275,000 will be for brand new developments. Prices for both property types are forecasted to have increased by 5.8 per cent in the fourth and final quarter of 2017 and by a further 5 per cent by the end of 2018, while still 23 per cent below their 2007 peak, meaning there are still plenty of bargain properties still available.
By the end of 2019, the report expects a total of 63,400 building completions on new developments a small rise compared to 2017, with 62,900 and well below the peak reach during the boom years. However, figures do show a significant increase in relation to 2016 when just 42,700 new homes reached completion, a 48 per cent rise.
Growth will continue towards an average annual rise of 2.5% in 2018 and 2.1% in 2019, sustained by an increase in private consumption and both national and international demand for Spanish property.
Property Prices Increasing
Much like the economy, Spanish property sales are on the rise. After 7 years of falling house prices, the market has now returned to pre-recession levels. Banks are predicting record property sales in the coming year. With confidence back in the market and demand steadily growing once again it’s inevitable that prices will increase. Current prices are still far from their 2006 peak, but sales volumes are back to pre-crises levels. Most distressed properties are now sold. According to data published on March 8, 2017 by the Spanish Instituto Nacional de Estadisticas, the price of private (unsubsidised) housing rose in Spain by 4.7% on average in 2016.
Next year’s anticipated growth will usher in an average national price increase of 6.1%. Affordability will still be the name of the game in 2018, however, because even with the expected price increase the average Spanish home value will still be 27% below 2007’s peak. This data from Anticipa, a leading real estate analyst and provider in Spain also compares next year’s projections with last year’s performance and found a 21% increase in home sales between 2016 and 2018.
There really is only one likely direction from here, and that is up. If budget is a key driving force for purchase then there is no time to waste as the last of the bargain buys and bank repossessions are snapped up.
What does this mean to me?
Buying low is a smart investment. Right now, Spain is very much a buyers market. It makes sense to purchase now while the market is in the early recovery/stability phase of the real estate cycle. This means that you benefit longer term from the increase in value, and don’t find yourself priced out of the market at the later stages of growth. The motivation for buying a home has always been a mix of practicality, lifestyle and financial gain. The Costa del Sol easily ticks the lifestyle box. There are a huge range of property styles to suit a variety of practical needs. Purchasing early in 2018 provides the opportunity for long term financial gain.