Will buyers come to Spain in 2017?

Posted by on Jan 3, 2017 in News

This was a good year for the Spanish property market in general. We wonder what will happen next ?

Will buyers come to Spain in 2017?

Posted on December 12, 2016 in Analysis

This was a record breaking year for Kyero, and a good year for the Spanish property market in general. We wonder what will happen next.

The best thing about Spain’s dramatic property market in 2016 was the total lack of drama.

Some may point to steady price growth for reassurance, but professional market watchers won’t be looking at prices; they look at transactions. Did people buy and sell houses?

The good news is they did.

House sales in Spain rose nicely in 2016, thus far recording a 15% rise on the previous year and ten consecutive quarters of growth. If you were looking for a marker, this means the Spanish property crash officially ended in Q2 2014 – and we haven’t looked back since.

It’s all the more remarkable for the fact that this happened while Spain’s economy remained weak, with stubbornly high unemployment, restricted credit and a period of almost no government.

In any normal market, nothing much should be happening.

But Spain’s market has two unusual advantages: Firstly, it had nowhere to go but up. The 2008 crisis completely shredded the housing market, and only a zombie apocalypse could have sent it lower.

Spain’s second advantage is international appeal. With one in five property sales going to foreigners, it can endure weak local demand. British, French, German, Dutch, Belgian, Italian and Swedish buyers continue to pick up the slack.

The Brexit mystery

It was no wonder Britain’s surprise decision to leave the EU dominated the year’s conversation. With Brits topping foreign demand, this must surely be the end of the Spanish housing recovery, right?

Except it didn’t happen.

There was initial scepticism when we reported overseas searches for Spanish property via Kyero.com hit all time highs after the vote, up over 50% on 2015. It turned out we weren’t wrong, and our largest agents have reported seeing record attendance at UK investor shows. Buyers may be talking about Brexit, but they’re still looking in large numbers.

While these are good forward indicators, they admittedly don’t confirm completed sales. So what of notoriously slow official statistics? Same story: Third quarter numbers from the land registry show foreign sales close to all time highs.

The UK property crisis is Spain’s gain

It’s worth throwing in a curve ball that perhaps isn’t widely understood in Spain: The effect of UK house prices on Spanish housing.

The British housing market is currently moribund, with prices rising way beyond all the laws of affordability, and transactions at historic lows. The winners of this situation are older Brits who find themselves sitting on a vast trove of property wealth (while homeownership becomes a dying dream for their kids).

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