Spain’s economy has been hit badly by the ‘double-dip’ recession of the past few years, but it finally seems to have levelled out. Although recovery is likely to be slow, any progress throughout 2014 will undoubtedly have an effect on the property market.
An improving economy benefits the Spanish property market
Property experts and estate agents predict that as the economy improves, Spain can expect to see a rise in property sales. Sales for 2013 were better than expected; this has also given rise to a feeling of optimism. The country’s economy grew by 0.3% in the last quarter of 2013 – its fastest growth period for almost 6 years. Spain’s economy is now expected to grow by a further 1% in 2014, according to financial experts JP Morgan, and encouraging export figures and industrial output, coupled with a rise in consumer spending and confidence is expected to have a knock on effect that will benefit the property market.
Unemployment will continue to fall during the second half of the year, and stable house prices will encourage sales and investment. On average, house prices will continue to drop slightly, although some areas of the market could prove unpredictable. The growth in Spain’s economy will be reflected in the credit and lending market and banks are expected to start lending towards the second half of 2014, and this will again have a significant impact on the property market.
Sales are already improving and to a greater degree than was predicted at the end of last year. Murcia based estate agents Mercers had expected sales to rise by around 25% compared to 2013, according to their spokesperson Chris Mercer, but instead have seen a marked improvement with sales increased by 60%.
A predicted increase in International sales
Traditionally, British home buyers were a mainstay of the Spanish property market, but as the UK struggled with its own rising unemployment figures, a massive slump in the economy and ‘double-dip’ recession, owning a permanent or second home in Spain appeared to be far from the minds of most buyers. In 2012 it was French, Belgian, Swedish and Norwegian buyers who dominated the market in terms of non-Spanish sales. A small increase in British sales along with some German and Dutch towards the end of the year looked promising, and in 2013 the majority of overseas sales were once again credited to British buyers at a rate of 64%.
Some experts have predicted that traditional British buyers will not be a major force in 2014, but the figures for the latter half of 2013 seem to dispute this. Stable or falling house prices are in fact expected to increase British interest in the Spanish property market throughout 2014, a promising prediction for real estate agents.
The Spanish property market is a very attractive option for International buyers, and as house prices stay level buyers are flocking from further afield
– stated Samuel Jones of Alta Vista Property.
The continued drop in unemployment and the steady and prolonged growth of the economy, plus the renewed possibility of accessible bank loans looks great for the domestic sector too. So without a doubt, Spanish buyers will also continue to take advantage of the very favorable state of the property market in 2014.
Those selling their homes may not achieve huge profits as house prices continue to stabilise or drop slightly, but neither will anyone lose out as homes once again find buyers. The marked rise in buying power can only be a positive step for the market in general. Investors looking to buy property abroad could do far worse than look to Spain in 2014.