Spanish Property Market Update: May 2017

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Spanish Property Market Update: May 2017

April 28, 2017

 Should you buy or sell property in Spain online? Consider the facts. Spain is on the ascendency. The property market in Spain is very much on the up, and there is no stopping that. The country has hit a sweet spot politically and economically.

Today, Spain has the fastest growing economy among major nations in Europe. The home prices here have been on the up since 2014. The recession of 2009 is finally over. Unemployment is no longer as much of a problem as it was only a few years ago.

The fact that there is a stable government in Spain after 9 months of political limbo has certainly helped. Prime Minister Mariano Rajoy is a respected leader and he has brought a semblance of much needed stability to Spanish politics.

The IMF predicts unemployment to decline further to 17.7% this year from the present rate of 18.6%. Christine Lagarde, the IMF managing director was full of praise for Spain and hailed the country’s management of the economy. 

Ms. Lagarde said: “The figures have not improved miraculously: thanks to reforms, the economy is turning the corner away from the crisis; unemployment, while still very high, has fallen. And we expect it to continue falling.”

However, there are some concerns that remain over the fact that British buyers, who are traditionally the biggest buyers of Spanish properties, are not so active anymore. There is no question that Brexit has had a major impact on the decision of many on whether to buy property in Spain online or not.

Sales to British buyers have taken a knock recently. While British buyers are believed to have purchased over 10,000 homes in Spain in 2015, in 2016, there was only slight increase in interest shown by them in the Spanish housing market, with sales rising by only 2 percent.

 The Spanish registrars have said in their annual report that the British demand is not as intense as before mainly because of Brexit. They say that Britain’s decision to leave the European Union “has had a downward effect on [sterling] and that, along with the uncertainty generated by the decision, is causing a reduction in the purchase of homes by our biggest buyer”.

There is no question that some of the Britons living in the country are worried. Many have been leaving Spain in big numbers following the Brexit vote and are insecure about their future there. The main issue is the loss of buying power because of the fall of the pound sterling and the loss of healthcare coverage. As one British expat, Glyn Emerton, said, “There’s one word to describe how we feel: concern.”

Still, Britons remain the biggest buyers of Spanish property, and account for a fifth of the purchases by foreign nationals. There are an estimated 1 million British expats living in Spain. They are closely followed by French and German buyers. Wealthy Chinese, Russian and Middle Eastern are big buyers in the Spanish overseas property market as well.