The Spanish Property Market is Booming
Do you have a property for sale in Spain? Spain is the big story in the overseas property market. Property prices in Spain have been on the rise since 2014, which was when things started improving in the Spanish economy. So is this the right time to sell your property in Spain quick and book your profits? Maybe, read on to see why.
There is a construction boom in Spain. Cities such as Madrid and Barcelona are out of space and most builders here are building apartments over existing homes. If at all you needed proof that things are fine in the Spanish property market, this should be it.
Spain hasn’t had a great time for at least 5 years following the global economic recession which began with the subprime mortgage crisis in the United States in late-2007. The government had to struggle with balancing its payments and the banks were forced to foreclose on many of their loans.
There was a serious unemployment problem in Spain during this time – over 25 percent of the young working age population was jobless. There were a glut of properties on the market as a lot of homeowners found themselves in a situation where they were asked to leave their properties by lenders for failing to keep up with the mortgage payments. This brought down property prices across Spain by over 40 percent by 2013.
Things started to improve once the austerity measures introduced by the government started becoming successful. The global economy showed signs of improvement around 2014. Tourism picked up and Spain was one of the countries that benefited the most. Since 2014, every year, record numbers of foreign tourists have been visiting Spain, which is always a good sign for an economy where tourism is one of the biggest industries.
As Joan Artes, head of the prominent Spanish real estate developer La Casa, says signs of the big upturn in the property market here are everywhere to see: "In Spain, we have identified more than 4,000 buildings which have available rooftops to build on. At a time when we lack space to build, we're talking of more than two million square meters."
Enrique Losantos, the Spanish head of the international real estate firm Jones Lang LaSalle concurs and says that things will improve further, provided the Spanish government makes positive policy decisions, such as not following the example set by the U.S. Federal Reserve by raising the interest rates. "Some deals are made at very low yields and could suffer if there is some sort of shock on interest rates," Mr. Losantos said.
Foreign investors such as wealthy Chinese and Russians who want to buy property in Spain online would be encouraged by the yields in the residential property market, which stands at 5.9 percent. That is very good in the present global environment.
They are also enthusiastic about the possibility of earning a high rental income from their holiday villas in Spain. The usual custom is to stay in their Spain villas for a month or two for a much needed holiday break, and to rent out the property to foreign tourists for the rest of the year. Regardless, there is a lot of money to be made in the Spanish housing market.