It certainly looks like the Spanish real estate market has bottomed out, although there are indications that this is changing. One of the signs that indicate this is the number of people on the market. It has been estimated that roughly half of all those looking to buy a home in Spain have already done so. It is also a common sight to see many agents that are taking their client’s money and then not returning it when the time comes around. In spite of this, there are signs that the Spanish market will begin to pick up again, perhaps in the next few months.
For some investors, it is hard to imagine life without a home in Spain any longer, even if they were born and raised here. Over the last decade, the Spanish property market has probably bottomed out, and for a select few, that means not having been priced out of the market. But they caution to stay cautious, as different variables can still affect the result year to year. For example, in the last ten years there have been several local disturbances in Spain which have disrupted the normal flow of business. On the positive side, there have been some positive developments, such as the arrival of the M2 motorway, which has made travel easier and more convenient for many potential buyers.
There are various indicators which indicate that there are two possible scenarios which could see the Spanish property market picks up in the coming months and years. One of these is that construction activity picks up and prices are increased. The other is that Spanish building rates decline, reducing the number of properties for sale. The fall in building activity is a result of decreasing appetite amongst buyers for property in Spain and an increase in the level of competition among developers. Both of these scenarios are associated with the global property slowdown, which has seen many property markets around the world either stagnate or experience declines.
A slowing of the Spanish construction sector is also accompanied by several positive factors, which should have a positive effect on the Spanish property market in the coming months and years. First of all, it is confirmed that in the past few years there has been a steady decline in the number of foreign homebuyers, and that there are several reasons why this trend might have started to decline. These include the financial climate in Europe being less than favorable for homebuyers during recent years, a lack of foreign investment capital and an increase in the prevalence of sub-prime mortgages in the United Kingdom. If you take a look at the national picture, you can see that there are many regions of Spain which have recorded falls in the number of new home sales in recent years, while in the cities of Barcelona, Girona and Valencia the situation has been the opposite.
On a national basis, the evidence presented by experts suggests that the two scenarios which are seen as most favourable for homebuyers and Spanish property sales in the coming years and decades are likely to be a combination of factors, namely an increase in population (which will lead to an increase in the size of Spanish communities and an ageing population), an increase in the availability of affordable housing (which will lead to more Spanish people owning their own homes) and a rise in building approvals. All of these factors have a knock-on effect on the Spanish property sector, with experts anticipating that the potential for new development is higher in the years ahead, which could mean that more homes may be sold off in the coming years and there will be an increase in the number of new build homes on offer. One of the positive indicators that comes from the studies carried out by analysts is the prediction that there will be a continued rise in the demand for Spanish housing in the coming years, particularly from women who are looking for a home for their family.
One indicator that could indicate a potential fall in Spanish home sales figures for the coming years and a possible decline in the rate of home building is the evidence that many people are not buying new properties but rather keeping their existing homes until the end of this decade. A slowdown in the growth of the Spanish economy could result in a slowing down of home buying, although analysts believe this would only be a temporary problem as it would soon be lifted. One reason why experts believe the Spanish property markets will not fall as predicted, could be the fact that there is a recession in many parts of Europe, and that the Spanish authorities have not eased mortgage lending criteria during the past few years. This is due to the fact that the financial conditions of the Spanish people are becoming increasingly worse and the health of the banking industry has been questioned over the last few months due to the ongoing economic crisis.
Another possible reason why the Spanish property market will not continue to perform as strongly as hoped for the next few years could be the fact that a recession remains in many parts of Europe, even though there is no sign of the UK being in one. In addition to this, experts believe that it will take the sort of time required for the Spanish economy to heal and recover from the massive impact of the recession on its citizens, which could mean that growth will only be slightly higher over the next few years. These factors all combine to suggest that the Spanish real estate market will not perform as badly as expected in the coming years as was previously predicted. Instead, experts believe that the Spanish property bubble will only remain intact for the coming years, but at a much weaker level than was originally expected.
There is also some confusion over the future of the Spanish housing market due to the fact that the government has decided to delay implementing some of the necessary measures that are needed in order to stimulate the market. The main announcements included tighter mortgage lending criteria and the introduction of a voluntary system of homebuyer tax in an attempt to cool the property market. Although this system has already been implemented in some parts of the country, it is believed that it will not be implemented fully for another year or two. It is also thought that the loosening of mortgage lending criteria will only be introduced gradually, with the end goal of increasing the total number of homes on the market over the next couple of years. Regardless of whether these measures go through and how successful they are, it is believed that the Spanish real estate market will only continue to thrive for the next five years or so.
