Property demand in Spain: ready to bounce back
The COVID-19 pandemic is heavily impacting our countries and property markets are no more immune to the general economy than we are to the virus. However, the recent figures published by Spain’s Institute for National Statistics (INE) lead us to believe that the Spanish housing sector fundamentals remain pretty healthy, and that as restrictions ease, the market reacts instantly.
Considering last 12 months cumulative housing sales as of September (419,000 sales in total) we see an 18% decrease compared to the same period a year before. Transactions of new properties represents barely a fifth of the national market but occurred to be more resilient, with a decrease of 11% over the period, to 82,000.
With the easing of restrictions in June, and the return to a kind of normality in September, a sharp improvement was observed, reaching almost pre-2020 levels, and the number of transactions was just 1% below their level one year before. In the case of new properties, the number of transactions in September exceeds pre-2020 levels, by 29%.
More locally, in the peninsula and the islands, the change considering cumulative sales over the last 12 months, ranges from -25% in the coastal province of Castellón to + 3% in the Basque province of Araba. Major international touristic regions suffered in general a higher impact than the others over the lockdown period: Alicante: -22%, Santa Cruz de Tenerife: -21% and Barcelona: -20% to name but a few.
If we compare the month of September 2020 to September 2019, range variation is a lot more intense, from -26% in the Basque Gipuzkoa to +71% in the interior province of Badajoz. Some touristic regions remain below national average, such as Barcelona: -20%, Valencia: -18% and the Balearic Islands: -15% and other benefit from a real rally: Murcia +2%, Almeria +9%, Malaga +16%.
International Investors have always been decisive contributors to Spanish property market. The improvement reported in September is tangible evidence that Iberia continues to be the destination of choice for many international buyers, and although Q4 data is not yet available, we have seen strong demand for International Buyer mortgages over the final quarter of 2020. It seems that the dream of owning property in the sun persists for many and we are preparing intensely for a busy 2021, because it seems that now is the time to buy for many!
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