Spain has a New Prime Minister: Impact on the Property Market


Spain has a New Prime Minister: Impact on the Property Market

 Do you plan to sell property in Spain?

The political situation in Spain has taken another turn recently, and the country now has a new Prime Minister in socialist Pedro Sánchez. He replaces the conservative Mariano Rajoy, who lost a no-confidence motion against his government.

Sánchez will be leading a minority government with only 84 MPs in Spain’s 350-member parliament. Antonio Barroso, an analyst at Teneo Intelligence, explains in an interview with the Guardian that not much has really changed, despite the change in leadership.

“Before this happened, you had a fragmented parliament with a minority government that had to look for the support of other parties to pass legislation and stay in power. Now what you have is a minority government that needs the support of other parties to pass legislation. You still have that fragmentation in parliament that will make decision-making very difficult,” Mr. Barroso says.

Regardless, the Spanish economy marches on, as does the property market, which has become immune to political developments. Spain has done well to emerge from the 2008 recession and is now well placed as one of the fastest growing economies in Europe.

As Ignacio de la Torre, chief economist at Arcano Partners says in an interview with Bloomberg, “This healthy growth is going to continue. The Spanish economy is immersed in a virtuous circle of falling unemployment, recovering salaries, rising consumption, and positive trends in the real estate sector.”

This is certainly a great opportunity for investors to buy property in Spain. If you have a property for sale in Spain, you shouldn’t find it too hard to find a good price for it.

The evidence of the change is all around us. Home prices in Spain have grown by 3 to 4 percent since 2017. This is nowhere close to the 12 to 16 percent rate at which property prices were growing in 2004, but it is clear that things have improved since the days of the recession.

 There has been an increasing activity in buying and selling of houses. There were as many as 45,000 property transactions per month in 2017, which is much higher the 30,000 per month in the 2010-2014, period, but still less than the figure of 75,000 seen last in 2004-2005.

It is clear that more people are buying homes, and more foreign investors are coming back to Spain. What has changed in recent years is not just the economic situation, but also that Spanish real estate companies have focused on quality and not on quantity.

 This has attracted many high net worth foreign investors to Spain and increased the prices across the breadth of the property market. It has also helped that the cost of borrowing has gone down substantially. The base mortgage rates continue their downwards trend across the Eurozone. It has never been easier to get a home loan in Spain.

What does this mean to you as someone looking to sell their second home in Spain? Well, to begin with, it means you will have no shortage of well-financed buyers for your property.

The bidding can get intense. The key is to hire an overseas property expert who excels at marketing your property to the most likely buyers from abroad. They would help you navigate through the turbulence caused by the political uncertainty and complexity of the real estate market in Spain.

 

 




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