Low Spanish property prices could see British Buyers taking advantage despite Brexit
It seems as though British buyers are still interested in purchasing property in Spain but only of sellers who are willing to reduce their asking price.
Despite the outcome of the EU referendum, British buyers are still showing an interest in Spanish property, especially from holiday home buyers and those looking to move to the country.
The index shows that Spanish sellers may have to reconsider the price of their property especially if they do not live in the more popular areas. Asking prices fell by 1.4% month on month to the lowest level they have been at since the economy ran into problems.
However, there are differences throughout the country and as some areas continue to fall others are showing signs of recovery. Many of the large cities as well as coastal areas have increased considerable since the economy slumped and Barcelona and Madrid are leading the recovery march with growth of 19.5% and 6.4% respectively.
Prices are falling in inland areas while the coastal areas are rising and this shows that there is a two speed recovery in place. In Malaga, prices increased by 1.5% during the first quarter while the Costa Blanca experienced a 0.8% increase. This could lead to more foreign buyers moving into the market and the signs are there as enquiries have increased.
The number of British citizens looking to move abroad has increased by 30% and Spain is one of top destinations. One of the reasons for this is that the pound is weakening and this means that Spanish property is priced at 30%-35% lower than it was when the market peaked in 2007. Spanish banks are also offering mortgage packages that are now very competitive.
As the UK has left the EU, the effect of this decision will be seen in the resort areas such as the Costa Blanca as many British expats live there along with holiday home owners who have taken advantage of the lower priced properties.
It is still relatively early to truly see what effect the decision will have but Spain will always appeal to British buyers even though prices could be slightly higher when they do decide to buy there. It is possible that British buyers, in the long-term could benefit from purchasing property for sale in Spain as the sale price has consolidated and in those popular area prices have continued to grow.
Rental property is also attractive to those buyers who are purchasing new development properties as they come with yields of 4%. Therefore, there is hope that there could be a positive impact of the UK leaving the EU on the Spanish property market.
A large number of non-European purchasers have begun to show an interest in alternative city locations that also offer exceptional investment opportunities. It is also possible that some London Banks could move staff to Madrid.
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