2020 has been a rollercoaster year for the property market, not only in Spain but worldwide. Just like a day trip to your favourite theme park, it’s hard to keep up with the action of the unpredictable Spanish property market, but there are some new long-term trends that we are seeing emerging, and welcome price drops that are sure to attract new blood to the market too. Here’s everything you need to know about the current Spanish property market prices and trends:
The Growth of the American Market
American homebuyers are finally learning what the European market has long known: that there is no better place for an idyllic holiday home than the Costa del Sol! From June to September, the biggest demand for Spanish coastal properties in Spain came from buyers in the United States, rather than the usual trend of British and German buyers being the biggest ex pat property market. These figures are based on online searches, and come from research by the Spanish property search engine, Idealista.
The Costa Del Sol was at the top of the list for American property hunters, with the Americans only being exceeded by the Germans in two coastal areas: the Canary Islands and the Balearic Islands.
Property Prices Fall in the Costa Del Sol
If you’ve always dreamt of owning your own property on the Costa Del Sol, and are hoping to bag a bargain, then there is good news for you: according to the real estate valuation group Tinsa, Spain’s Mediterranean coast (including, of course, the Costa del Sol) has seen the biggest property price drops out of any other area in Spain over the past year. Property prices in the region have fluctuated for months, but on average since November 2019, the average house prices in the region are down by 6.7 percent. By comparison, prices in the Canary and Balearic Islands are relatively static, with the levels being the same as they were a year ago, making the Costa Del Sol a much sounder investment.
Prices Remain Stable for the Luxury Market
2020 has been a tough economic year for Spain, and both the International Monetary Fund and Morgan Stanley agree that the country has experienced a GDP drop of approximately 12 percent. However, the luxury end of the property market is yet to reflect the price drops that the rest of the economy has experienced. Many sellers are reluctant to let the changing economic situation affect the prices they will accept for their homes, but with buoyant demand these prices are therefore maintaining a stable rate: good news if you have already purchased a luxury property in Spain and are now looking to sell it.
Whilst the luxury market remains unchanged, the standard real estate markets is forecast to see falls of around 10 percent in average sale prices. This could drop to around a 30 percent reduction in more disadvantaged areas.
The Impact of Covid on Spanish Living Habits
Spain has long been a nation of apartment dwellers: It is the European country with the highest number of residents choosing to live in apartments. But the impact of Covid, and the lockdowns which forced people to spend more time than ever at home, meant that Spanish people started to rethink their priorities when looking for a property. Rather than focus on picking a central location and then spend time outside in the country's excellent public parks and open spaces, the desire for a property with outside space is increasing at an unprecedented rate. Third quarter stats show a historically high rate of sales of these bigger properties (which offer either gardens, terraces, or both) and in the third quarter of 2020 they represented 20.4 percent of total property sales, whilst the sales of flats dropped considerably.
Sales Increasing After the End of Lockdown
The Spanish tourism industry had an unprecedentedly bad summer, with the resurgence of Covid-19 leading to travel restrictions that has a devastating impact on one of the country’s most important industries. However when these restrictions ended in September, the property market bounced back almost instantly to almost pre-2020 levels. New data released by Spain’s National Statistics Institute (INE) reveals how property sales in September 2020 were only 1.1 percent lower than for same month in 2019.
Of the 37,839 properties that were sold in Spain during September, an incredible 2.346 of those were sold in Malaga, showing that the region is still incredibly attractive, and that the property market here will continue to thrive.
Are you thinking of moving to Spain? As the figures show, now is the great time to get on the Spanish property ladder and turn your dream of Spanish home ownership into a reality! Why not get in touch with our local property experts to find out more about how we can help you.