The Spanish Real Estate Crisis is Officially Over!

The Spanish Real Estate Crisis is Officially Over!

 Even as Greece falls into a dark hole of its own making having voted ‘No’ in the referendum conducted on Sunday, we have only good news for you if you have properties to sell in Spain. The property market crisis in Spain is over! The real estate sector is back to where it was earlier.

 The recovery in the prices of Spain homes for sale is largely driven by foreign capital. The foreign money is coming back with full force, after having largely ignored Spain for a number of years since the real estate bubble burst in 2008.

Let’s look at the facts. A survey of property registrars in the country has indicated that foreign nationals bought over 12% of the residential Spain houses for sale in the first half of 2015. In 2006, when the Spanish real estate market was flying high, foreign investors had bought 9% of the Spain properties for sale – so clearly, not only has the market picked up, it is actually hitting new highs.

And there is a growing interest from the United States. Americans love Spain for several reasons – the brilliant sunny weather all through the year, the amazing culture, the high standard of living and the proximity to the whole of Europe.

Today, Americans make up 5 to 10 percent of the buyers of Spain apartments for sale in cities such as Madrid and Barcelona. This represents a huge change as Americans had virtually disappeared from the Spanish property market following the 2008 global economic crisis.

As a real estate analyst Daniel Masnaghetti of John Taylor confirms “Prices went down across the board in Spain at least 30 percent since 2008. Even so, post the prime-mortgage crisis, the American buyers disappeared completely. Now they make up 5-10 percent in Madrid and Barcelona, which is quite healthy. People anticipate that in a year and a half, the (Spanish) government might change, and they want to get the upside now before the elections.”

While houses in Spain lost 35 percent of their value between 2007 and 2013, the strong recovery means they have gained 20 percent of the lost value since 2014. And who is buying all the houses to sell in Spain – foreign investors, of course.

 Alex Vaughan owns Lucas Fox, a Barcelona based developer of luxury properties. He says that 91 percent of his sales so far went to foreign investors. He also talks about how the locals are coming back into the property market this year as well:  “At the high end — €500,000 and up — it’s primarily being driven by international demand. In the bigger cities we’re seeing more transactions involving local clients. In Barcelona about 25 per cent of our business will be with locals this year. In Madrid and Valencia that’s much higher.”

The foreign investors are no longer the same as before. In the past, it were the British who were the most prominent buyers of Spain houses to sell. Today, most of the buyers of house and apartments in Spain are non-Europeans – Americans, Asians (Chinese in particular) and Arabs.

There has been a decline in the number of Russian buyers recently because of the tighter regulations on currency transfer imposed by the Russian government and the fall in the value of the Rouble.

 Among Europeans, the Swiss are the most prominent buyers. As Francisco Nathurmal, founder of BCN Advisors says, “We’ve seen Americans back. And the Swiss. The franc has really gone up. They’re buying like there’s no tomorrow.”

The Golden Visa scheme has made a significant impact as well. Basically the Spanish government offers residency to foreigners who invest more than 500,000 Euros on buying properties in the country.  It has certainly also boosted the recovery as so far over 1,000 visas have been issued to foreign buyers, mostly from Russia, China and the Middle East. 5 to 15 percent of foreign buyers in Spain apply for the Golden Visa.

Clearly, there is a plenty of good news on offer for you if you have properties to sell in Spain. But it is important  to hire reliable UK estate agents to market your house for sale in Spain to rich, high net worth foreign buyers.

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