The Current State of the Spanish Property Market
There are thousands of repossessions and almost 1.1 million unsold new homes. The unemployment rate and the demand in properties continue to worsen. TINSA, the leading Spanish company, reported that in April 2012, the property prices have dropped an average of 12.5%. Since 2007, the average drop is 30% whereas the coasts suffered from a 37% fall. An increase in VAT this year for new homes is another reasons why the property demand along with the prices and sales keep on declining.
This seems like a bad time for the sellers, but many foreigners and native Spaniards see this as an opportunity to buy a property without needing to borrow or spend all the money they have. Indeed, increasingly more properties are being sold in a bargain. You will be surprised at how much people are willing to offer just to sell their properties. But of course, it is wise to test the water first. Search for your dream location while keeping in mind your necessities, personal circumstances and long-term goals.
The Recovery and Future of the Spanish Property Market
Several experts discourage home ownership or property investment in Spain considering the current status of the property market. There seems to be no hope and solution to the country's property stock problems regardless of the efforts of bargain hunters. But despite the decline in sales and transactions, a lot of properties have been sold to English, Norwegian and Russian citizens.
The following information should be more than enough to lift your spirits up and restore your faith in Spain's property market:
One of Spain’s leading newspapers, El Mundo, reported that numerous signs of improvement in the Spanish property market have been observed. It also stated that the key to the market's fast recovery could be the constant demand of foreign investors for many different Spanish properties.
According to Graham Hunt, a real estate agent and owner of one of the very first Spanish property websites, international sales have increased in 2012 (quarter after quarter) and prices dropped to almost 35 to 40 percent.
Thousands of immigrants seeking to enjoy the climate and the overall good life in Spain now have relocated and purchased various types of Spanish properties. The purchases made by the foreigners (including 1,757 homes by the Russians and 868 homes by the Chinese) rose by 6% in 2012.
The Spanish Brick agency declared that, ever since the crash in 2008, there has been a slow yet consistent growth in the property market. At present, the Spanish government is focused on encouraging investors from Russia and China because these countries are eager to buy foreign properties.
Recently, property experts from the United Nations (UN) came up with facts predicting the continuous drop of the Spanish economy in 2013 along with its improvement in 2014, with a growth of 0.8%. Spain's property market will be able to recuperate as long as there is progress in its economy.
Kyero.com, the specialist property sales portal, reported that in 2012 there has been a 23.6% reduction in the stock of unsold Spanish homes. This is based on the 17th edition of the Real Estate Pulsometer by the Corporate Practice Institute. Also, the recovery of new construction activities will begin in 2013.
The firm also shared its latest Spanish house price index that demonstrated the average national prices (€252,000) in the first quarter of 2012. Kyero expects some upturn this 2013 that will indicate a widespread return of buyer confidence. There should be a steady growth in prices between 2013 and 2018 should the property market keep on exhibiting a 10-year peak to trough cycle.
The Spanish government plans on granting residency permits to foreigners who will buy Spanish houses worth more than 160,000 euros ($203,845), according to The New York Times. Jaime García-Legaz, the Spanish trade secretary, announced that the plan was aimed at Russian and Chinese markets (where there is continuous growth in the demand for Spanish properties) in an attempt to improve foreign investment while dealing with the country's stock of unsold properties in a stagnant market.
Many real estate experts consider this plan as a potentially effective marketing approach. It could indeed help in improving both the Spanish economy and property market. Even so, a number of critics voice out their opposition asserting that such move is nothing but a do-or-die endeavor aiming to revive Spain's fallen property market.
You may think that this is not a good time to invest and buy a property in Spain considering the crisis in its economy and real estate market. However, the current status of the Spanish property market, regardless of how depressing it seems, has given many people the chance to purchase their desired properties. This is mainly because the prices and interest rates are now lower than they used to be.
Loads of options are waiting to be explored even if you are tight on budget. But, you've got to make sure that you research, plan and prepare accordingly. Keep watch of the many significant changes.