Where Will Recovery Take the Spanish Property Market?

The Spanish property market is continuing with its recovery from the depths it reached in the wake of the global economic downturn. There are a number of strong indicators to show that the Spanish market is not only in recovery but is making good progress at clawing back what was lost.

Prices are on the up, and construction is once again picking up; two of the best indicators of a healthy sector. Demand is also returning to Spain’s property sector, with indications suggesting that Spain’s crop of potential buyers is becoming more interested in acquiring property. The fact that prices, though recovering, still remain low and affordable mortgage rates are on offer is leading many to decide that this is the time to buy.

In Spain’s wider economy, employment figures are decidedly on the up. This is important news, as high levels of unemployment – particularly amongst the younger generation – was one of the factors that defined Spain’s difficult time during the years of and after the economic downturn. This was also, of course, a key factor holding back many would-be buyers of their first properties.

Another positive sign of recovery in the Spanish market is the fact that longstanding issues of oversupply are finally being dealt with. The advent of the financial crisis and the way in which Spanish property was particularly hard-hit put an abrupt end to heavy development activity, coupled with a sudden and pronounced drop in demand. Many banks also found themselves in possession of properties they didn’t really want, as a result of people hit by the financial crisis being left unable to keep up with mortgage repayments. This combination of factors meant that the Spanish market simply had too many properties and not enough buyers, which did not bode well for plummeting values. Now the market is in recovery, however, buyers are returning, investors both domestic and foreign are picking up the low-cost excess stock, and while development has begun again, it is proceeding at a modest rate that is not keeping the market in oversupply unnecessarily.

As the recovery continues, there are a number of specific results that are expected to be seen in Spain’s property market. Naturally, recovery will involve increases in property values, and this is already being seen in key regions especially. Prices of Spanish properties for sale across the nation were up 1.8% in June, and are expected to grow by roughly another 5% by the end of the year.

One key fruit of Spain’s recovery is expected to be a return of interest from foreign buyers – and like price growth this is already decidedly underway in the most popular locations. Interest from foreign buyers, whether investors or second home owners, was one of the things that characterised the Spanish market before the crash and is likely to become prominent again after recovery.

Fresh construction activity is also something that analysts expect to see as one of the defining features of Spain’s recovery. Lack of demand, financial difficulties as a result of the downturn and the existence of too much stock already standing have all severely constrained developers in the past few years, so the return of activity to the construction sector will be an important step in resuming normal service.

Mark Burns

Mark Burns is a Director and Property Investment Consultant at Hopwood House. With over 10 years' experience in property investment, Mark has provided investors with a wide range of opportunities in exotic locations around the world.

You May Also Enjoy

LIVING BY THE SEASIDE 2022
Breaking News

COVID five years on: City and coastal trends reverse as homes by the sea take longer to sell

Rightmove’s new report looks at how the market has changed five years on from the pandemic starting Many city and coastal trends have now reversed, with homes near the sea taking three weeks longer to sell compared to 2020, and the majority of buyers in the capital looking to stay rather than leave London A…
Read More
Estate Agent Talk

What it takes to make real estate development financing work

By Daniel Austin, CEO and co-founder at ASK Partners Securing financing for real estate development has become an uphill battle. With interest rates still elevated, inflation pushing construction costs higher, and planning delays introducing further uncertainty, developers face a challenging environment. Traditional lenders, constrained by regulatory pressures and rising risk aversion, have scaled back, creating…
Read More
Home and Living

Signs Your Roof Needs Professional Repair: Don’t Ignore These Red Flags!

The roof of your home is one of its most vital components. It serves as the first line of defense against the elements, shielding you and your family from rain, snow, wind, and UV rays. A sturdy roof also enhances the energy efficiency of your house, helping to regulate temperature and reduce heating and cooling…
Read More
for sale sign london
Estate Agent Talk

Cheap Local Estate Agent

How much is the average estate agency fees in England for 2025? The figure of 1.42% (including VAT) is the average estate agency fee in 2025. This average fee for selling your home can vary with figures between 1% and up to 3.5%, there may be some lower and higher too. How you are looking…
Read More
Estate Agent Talk

The Future of Real Estate: How Technology is Revolutionizing the Industry

It is also evident that the real estate industry is going through a lot of changes mainly due to changes in technology. Technology is changing almost every aspect of the industry and this includes the purchasing, selling, and advertising of properties. Consumers need a more efficient and enhanced form of transactions, real estate professionals must…
Read More
Breaking News

Halifax House Price Index – Average UK house price falls in March

• House prices fall by -0.5% in March (vs -0.2% in February) • Average property price now £296,699 (compared to £298,274 in previous month) • Annual rate of growth remains at +2.8%, unchanged from February • Northern Ireland sees house prices rise at fastest pace (+6.6%) Amanda Bryden, Head of Mortgages, Halifax, said: “UK house…
Read More