According to the experts, we have a property boom again. And excellent news, the evidence says its back for good this time!
We cannot sell you a house in Spain. What we will do is to make sure all your legal and taxation issues are in perfect condition. There were some very positive words coming from the experts last week. Brexit is getting the British buyers back in Spain and the Scandinavians and Belgians are buying too.
Here is a summary of the reports for the first third of 2019.
The two coastal towns in all of Spain selling more houses than any other are Orihuela Costa and Torrevieja according to the latest data of the Ministry of Development. (May 2019)
Orihuela City and the Costa Blanca is the region that has taken over the building ‘boom’ more than anywhere else in Spain.
In 2017, for example Orihuela (and its coast) was the coastal town with more than 10,000 inhabitants, where more new build homes were built than anywhere else. It’s even ahead of very dynamic markets such as Marbella, Estepona and Ibiza.
Since 2011, long before the market re-ignited, real estate activity woke up in Orihuela. That happened before most other regions in Spain and indeed Europe. Although the figures are light years away from those of the Spanish property bubble, the truth is that this is the most dynamic point of the entire Spanish coast.
This new and exciting dynamism in construction is based on a strong demand for new construction (new build) housing in the area.
According to data from Fomento, in 2018 Orihuela was also just behind Torrevieja, the coastal town in which the most houses were sold.
Specifically there were 4,055 units sold, compared to Torrevieja with 5230, 4,077 in Marbella and a relatively small amount of 2,515 in Estepona. What is happening on the Costa Blanca?
Joaquín Cabrera Seva, Tinsa technician, gives his opinion.
“With the outbreak of the credit crisis, in 2007 the construction of new buildings was halted. Then in 2013, large local promoters who managed to survive the crisis, got plots of land from promoters and banks. The first promoters who started their activity build communities in coastal areas close to the services foreigner buyers enjoy and they went to the market at low prices. These properties were easily sold.”
“This successful situation awoke the rest of promoters. The big guns soon saw that demand existed for quality new build property. Of courses prices soon went up. One of the first promotions, started in 2013, reached sales of around 90,000-100,000 euros. At present there is nothing (for sale) below 160,000 euro.”
Cabrera Seva reserves special praise for foreign, especially British Estate agents and legal companies.
“Since 2014 all the foreign agents have been active since they understood that the market preferred to have new quality work. The foreign market demands almost exclusively new work, or at least good quality resale properties. The Scandinavians, the Norwegians or Belgians demand homes without needing finance and they want them to be newly built and of good quality. ” he concludes.
Are there exhaustion symptoms in the Costa Blanca market?
According to the experts consulted, unlike what is beginning to be perceived in other hot spots in Spain, on the Costa Blanca there is no sign of diminishing interest in property here.
Prices here have risen 15% in the last year and 22% since they touched ground. Interestingly the prices are still 30% below the boom time levels. This suggests it’s the perfect time to buy – prices are going up, but not at crazy levels. Yet.
More from Cabrera Seva:
“The new construction market on the Costa Blanca has continued growth. New build promotions continue to be sold and the number of real estate agents continues to grow. Local Spanish promoters are still looking for plots of land to continue the activity. What is now seen is a great distance between the sale prices of the new construction and the resale properties. Although for second hand property there is also great activity and demand, “says Cabrera.
Since 2017 Alicante region has become the Spanish province responsible for leading the property recovery in coastal areas. While the foreign and Spanish media focuses on Madrid, Barcelona or the two archipelagos (island groups) within the Valencian Community, the green shoots of recovery are spread over a good part of the region.
Alfredo Millá, CEO and founder of Sonneil, reports:
“The province of Alicante is, together with Barcelona, the 2nd region in Spain with the largest number of projects under construction right now.”
Strong weight of foreign demand
Alicante with 5,915 units sold is only behind Madrid (16,972) and Barcelona (7,896), the Spanish province with the highest number of new home sales registered in 2018.
These figures are exceeding even the 5,812 of Malaga, according to data from the College of Registrars in Spain.
In addition, Alicante is also the province with the highest real estate activity. Here we see 21.35 sales per 1,000 inhabitants. The positive upturn is according to Millá;“Thanks mainly to the high volume of tourist activity and the buying and selling of property by foreigners.To give an idea; 40% of transactions on the Costa Blanca are carried out by foreigners. That is the highest percentage in all of Spain, above 37% in Tenerife, 30% in the Balearic Islands and 28% in Malaga.”
“British buyers are still the main ones are Torrevieja. Also, Swedes, Norwegians, Belgians and French are the nationalities most interested in buying in Orihuela Costa” says Alfredo Millá.
Joaquín Cabrera explains, “The Orihuela Costa area has greater potential, greater volume and greater demand than any other part of Spain. The Costa Blanca draws the neighboring municipalities, such as Torrevieja, Pilar de la Horadada and Guardamar. The benefits of the warm climate of Orihuela Costa and Torrevieja attract buyers. They (buyers) still have a harder time going down to the province of Murcia with its nearby municipalities such as San Pedro del Pinatar and San Javier. ”
According to this Spanish property expert, “the coastal area of Orihuela Costa has nothing to do with its urban centre being separated more than 30 km. The coast is a tourist area where there is no seasonality for the market.
For its part, the Spanish local market in Summer seasons increases activity, but during the rest of the year the foreign market is continuous. Those looking to buy property on the Costa Blanca often are here to stay, not only retirees but complete families, with children who can easily be integrated into the schools and later the labour market. The vast majority of the real estate related businesses are run by foreigners and this is leaving for the Spaniards mainly the construction of new builds and professional services”.
“The foreign agents and legal companies have connections with the countries of recruitment. Many have have numerous investments in foreign countries, which means that when the clients arrive they only have to choose between what they offer, and non Spanish clients can trust in them.” concludes the technician of Tinsa.
Tinsa recently said, regarding the currently supply of property here:
“The solid performance of the property market on the Costa Blanca has absorbed practically all the stock of housing that was built during the years of the ‘boom’. The ‘stock’ of holiday homes is residual in places like Guardamar del Segura and Pilar de la Horadada, yet very scarce in Torrevieja and Orihuela Costa. What is to be seen now is how many more years of activity are left in the property sector”
Positive words on the property market on the Costa Blanca indeed.
If you are interested in having your legal work organised by an English speaking legal and tax team here in Spain, just get in touch. Maybe do it soon, before the prices go up again! Contact us to discuss how we can help you.
Ian Comaskey