Investing in Spain is now the right time

Recent activity and articles written by publications who analyze economic situations suggest that those in the know are looking seriously at Spain’s property market again.

Whilst as pointed out in the This Week article the pundits do differ in their advice some seasoned and well known names involved in the riskier end of investments have started to put money into property backed funds and trusts in Spain.

The most well known of these include George Soros and John Paulson both of whom have been known on more than one occasion to back situations when the rest of the World is racing off in the other direction. This included the George Soros punt against the pound back in 1992 and the John Paulson bet against the sub prime market in the USA.  

  

What has changed in Spain.

Economically there are signs that Spain is recovering from its double dip recession. Whilst the national market remains subdued due to high unemployment, exports are up and productivity is high.

Spanish property prices have fallen on average by over 30% since their peak and in some areas this is as high as 70%. Even the most cautious of the pundits see prices stabilizing by end of 2015.

Is the upturn across all of Spain.

The highest levels of activity for buyers in Spain seems to be coming from the quality end and is focused on areas like Mallorca and better parts of Costa del Sol. Other areas which will not attract the wealthier buyers like Murcia whilst still struggling on over supply have starting prices in the region of € 40k for small apartments.

Legal issues surrounding buyer protection well reported from the past have been ratified and buying in Spain is now safe and secure as long as the right advice is taken. 

Spanish Mortgages

Credit in 2014 is more accessible than in previous years as Banks have cleaned up their balance sheets and are looking after years of net outflows to rebuild their mortgage books.

New Spanish mortgage product has been launched, focused on the higher net wealth clients and Northern Europeans particularly Scandinavians and Swiss.

UK applicants with the right profile will also find gaining a loan in Spain more readily available than in 2013. 

Read the full article: Investing In Spanish property

2013 another year of price decreases in Spain

INE Indice de Precios de Vivienda 

 

Issues today for the 7th year was the house price index showing what has happened to house sale prices both regionally and nationally in Spain.

For those considering when buying in Spain is the right time the data does show some slowdown in the level of decrease being experienced at least in some pockets of Spain.

Post the property boom due to a large oversupply of housing stock, economic difficulties within Spain and Europe and well reported lack of legal protection due to rogue local authorities prices in Spain have been falling.

How far have prices fallen since the boom years.

2007 was the last year of growth showing an increase of 9.8%. Sonce then house prices have fallen by 41.9% as a national average. Areas like to Balearics, Canaries and other tourist destination have held up slightly better. The Murcia region home of UK advertised Polaris World has seen some of the highest falls in Spain.

In 2013 house prices dropped by 10.6% in comparision to the 13.7% fall in 2012. The third quarter of 2014 showed some small growth but this fell back again in the fourth quarter.

Split of property type

Over the last couple of years new build prices have held up better than resales but this trend now appears to have halted with the average drop across both types of purchase being in line with each other. This may be a reflection of Banks being willing to sell developments they have taken over at more realistic prices and developers themselves being more pragmatic in order to encourage sales.

What can we expect for 2014

With Spain recovering slowly, higher levels of legal protection, and strong currency exchange rates for countries outside the Euro International Buyers are starting to look more seriuosly at Spain as a good place to buy. These factors along with a recovering national market may mean we see prices stabilising  and possibly showing small levels of growth toward the back end of 2014.

Read full article : buying in Spain yearly house price index for 2013