Five reasons to buy a Spanish property in 2014
After about 7 years of downturn in the Spanish property sector, we can finally begin to talk about solid data showing that the recovery is under way. Foreigners are now seeing the opportunities in the current market. Purchases by foreigners rose by 11.9% during the second quarter of 2014. There are now several reasons to buy a Spanish property; here are the five best:
POSITIVE DATA: Sales during the second quarter of this year rose by 12.1%. This is a sign that consumer confidence is increasing and that people read it as a good time to buy. The mortgage market is beginning to show signs of increased activity. It rose by 19% in June and 28% in July (INE statistics). Prices began to stabilise during the second quarter of 2014. According to the national statistics institute there was a rise of 0.97%. The statistics show that the market has bottomed out, and that means there is currently very limited risk in most Spanish property investments.
A BUYER’S MARKET: There is good scope for negotiation because of oversupply, a limited number of serious buyers and general economic conditions that put many sellers in a weak negotiating position. 2014 looks like being a particularly good year for the buyer, because new tax laws come into force from next year. For many property owners, their capital income will increase considerably if they do not sell at the end of this year. That makes many want to sell their property and avoid a substantial tax bill. They have to accept prices well below market value.
THE SUPPLY: There is still a large number of unsold properties in Spain, which means plenty of choice for a potential buyer. Homes of every kind and in every location are available. Modern new builds are also coming onto the market in the most popular coastal areas, such as the province of Alicante. Although the number of unsold homes is likely to remain high in many areas, supply can be seen to be falling rapidly in the most popular places. One example of this is the province of Alicante on the Costa Blanca. Half of the buyers are now foreign, most of them paying cash. It is predicted that the 10,000-15,000 unsold homes will be sold within a year and a half.
LOWER FEES: Because of the fall in prices when buying a property in Spain, fees have also fallen. Notary and registry fees, along with fees for authorities and lawyers, have all come down, since in most cases they are tied to the purchase price of a property.
FLOURISHING TOURISM: Tourist numbers rise year after year in Spain. From January to August 2014, more than 45 million tourists visited Spain, setting a new record for the country’s tourist industry. That means letting out an apartment is a great opportunity for many buyers to get a return on their investment when they are not using it.
Statistics from the ministry of public works show that sales of Spanish property are now unmistakably recovering. According to the ministry there was a 12.1% increase year on year during the second quarter of 2014, corresponding to a total of 91,338 sales in the period.
This is the highest number of sales in a second quarter since 2010. 84.3% of the sales (77,042) were resales, while the remaining 15.7% (14,296) were new builds. Resales are up 15% year on year, while new-build sales are down 1.5%. Almost every region in Spain showed increased sales for the second quarter, with the exception of the La Rioja region, where sales fell slightly.
The statistics provide further evidence to back up the claim that the Spanish property sector is now past its worst crisis.
Spanish construction figures continue to improve. In recent months the construction sector has become one of the fastest growing in Europe. This trend continued in July, when construction activity rose by 11.6% year on year, the third highest increase in Europe for the month.