The Spanish property boom is set to continue.
Predictions are positive from the Analistas Financieros Internacionales, Spanish land registrars’ association and Bankinter.
The post-Covid, post-Brexit, surge in Spanish property is set to continue according to some serious experts in the sector. The 2022 outlook is very favourable, despite the obvious challenges. People have just had enough of waiting for the perfect time to buy a property in Spain. It appears the perfect time for many is right now.
Analistas Financieros Internacionales and Bankinter, one of Spain’s top retail banks, predict growth to reach 4.5%. This is down from the previously predicted 5.5%, yet still impressive.
The bank of Spain predicts the economy here will return to pre-pandemic output levels before the third quarter of 2023.
Home sales in Spain increased by 38% in 2021 and house prices generally by 5.3% according to the Spanish notaries’ association. Here on the Costa Blanca, we feel prices are rising even more than that. The usual “hot” areas such as La Zenia, (where we are based), Villamartin, Los Dolses, Cabo Roig and Playa Flamenca are booming. Irish, British and Dutch buyers are driving prices upwards.
This is all despite unemployment rates which are expected to hover around 13%. Russia’s invasion of Ukraine is not helping the outlook but the long term impact that has on Spain is far from certain. Many Ukrainian and Russian investors are using the opportunity to invest in Spain, again driving prices skywards. Restrictions on Russians buying here are not evident so far at least. This year according to the bank of Spain inflation will rise to 7.5%. The glass half empty economic outlook should influence buyers but we are seeing a case where people have been waiting two years or more to make the move and nothing is now going to stop them!
New Developments in Spain.
New property Developers are reducing their output. Some of this is down to the difficulties in the market but with the wide range of resales on the various estate agents’ portals, it is harder for them to complete. These developers are seeing a large increase in the cost of building a new home, higher financing costs and now less demand due to the superior value elsewhere.
Bankinter, as we mentioned, is optimistic about foreign demand for Spanish property. The banking giant expects numbers of buyers to keep growing as the pandemic’s travel restrictions recede. They predict sales of 400,000 (resale) and 100,000 new homes in 2022. We recently arranged a mortgage for some property buyers through our local Los Dolses branch and I have to say it was quite seamless.
We can of course see the demand here in Spanish solutions for our service. Foreigner buyers were involved in 21,638 Spanish home sales in the first quarter of 2022. That is up almost 75% on 2021. Figures are courtesy of the latest quarterly property market report from the Spanish land registrars’ association.
The surge in foreign demand in Q1 is mainly driven by second-home demand amongst buyers from northern Europe. British buyers of Spanish property, despite the Brexit fiasco, are the most noticeable cohort of buyers. Irish buyers are up 150% year on year. Poland, Norway, Sweden and Germany, as you’d expect also produce a very solid number of property buyers so far this year.
2022 looks set to continue to get Spain in general, and the Spanish property market specifically, back on track.
Here in Spanish solutions, we look after the legal, taxation and fiscal side of things for our clients. We are not estate agents.
Our advice is always to find your English speaking lawyer before you even start your search for Spanish property.
If you’d like to talk to us and you think we might work well together, please let us know and get in touch today!