Spanish Real Estate Market: Summer-2020 news
Tourism within Europe this summer did happen, albeit with restrictions. We continue to follow what is happening in the Spanish property market, where most of the news is about the impact of the COVID-19 pandemic.
1. -6.1% on resale properties
Pricеs fоr the Spanish resale properties fell by 6.1% during the pandemic. This number was reported by Idealista. If we compare July 2019 and 2020, the fall in price was around 4.8%. To date, the average cost of secondary housing in Spain is at €1650/m².
Resale property in Alicante
Of all the Autonomous Communities of Spain, only the Balearic Islands benefited during the pandemic: +0.4% to the price of resale properties. The biggest fall was recorded in Catalonia (-8%). As the main reason experts note the reduced demand for real estate. The current reduction of price is an excellent opportunity to buy a property at a below-market price.
As for the most demanded places among foreigners, the average cost of housing in the province of Alicante fell slightly (-0.2%), and the large and medium-sized cities were able to increase the price: +5.9% in Alicante, +2.7% in Benidorm, +0.5% in Torrevieja. Property price in the province of Malaga increased by 2.7%: +5.1% in Malaga, +0.8% in Estepona and +3.9% in Marbella.
As for the most demanded places among foreigners, the average cost of housing in the province of Alicante fell slightly (-0.2%), and the large and medium-sized cities were able to increase the price: +5.9% in Alicante, +2.7% in Benidorm, +0.5% in Torrevieja. Property price in the province of Malaga increased by 2.7%: +5.1% in Malaga, +0.8% in Estepona and +3.9% in Marbella.
2. Rent: taking advantage of the situation
A decrease in demand for housing has led to another trend – the growth of rental costs. Many of those who were planning to purchase new real estate this year, had to postpone the deal and opt for rent. The same is true for entrepreneurs and commercial premises.
The highest yield is among offices (10.9%) Pictured is the office of Amadeus in Madrid
As a result, the average return on rental housing in Spain has increased by 8.2% (of the cost of housing per year). Before quarantine, this number was at 7.6%. The highest yield is among offices (10.9%), followed by residential premises (9.3%) and parking places (7.6%).
3. The masks aren't going anywhere
It would seem that coronavirus is mostly over. Nevertheless, non-proliferation measures continue to be applied in some regions of Spain. Thus, in Andalusia since July 14, you cannot take the mask off even in the pools and at the beach.
Masks may only be taken off while swimming. Children under six years of age and people with respiratory diseases are exempt from wearing masks.
4. Courts fall asleep, okupas wake up
In recent months, there has been an increase in complaints from Spanish homeowners about "okupas". This fact is reported by the Spanish media and real estate agencies. Among the main reasons for their actions was mentioned a quarantine, during which many people were forced to stay at home and couldn't fly to Spain to their vacation homes. Also, due to the pandemic in Spain that lasted almost three months, the courts did not work, making it difficult to evict okupas legally.
Spanish police evict okupas from someone else's housing
Among foreign homeowners, this problem is particularly acute, because some of them still do not have the opportunity to fly to Spain and make sure their homes are safe (except for those possessing residence permits). In this regard, Virtoproperty has released a detailed article with advice on how to protect your property from okupas.
5. Penthouse: expensive but popular
Spanish penthouses are on average 27.1% more expensive than similar housing options on the penultimate floor. Housing with panoramic views and access to the rooftop remains extremely popular among both local and foreign buyers. At the same time, this type of property is only 7.7% of the whole market.
The most significant price difference between penthouses and regular apartments is in Guadalajara (+57.1%), followed by Valencia (+55.9%) and Seville (+51.2%). Barcelona and Madrid have lower overpayments ratio for attics: +18.1% and +21.2% respectively.
6. When will the market recover? CaixaBank forecast
The coronavirus pandemic, even if it ends in the coming months, will have a long-term impact on property prices. This fact is stated by experts from a major Spanish bank – CaixaBank. According to their forecast, in 2020, the cost of local housing will fall by 6%-9%. To pre-crisis indicators, the Spanish real estate market will return no sooner than 2024.
Also is expected a decline in Spain's GDP from 13% to 15% this year and the recovery of pre-crisis indicators no earlier than 2023. At the same time, the study says the real estate sector will experience fewer losses than in 2008.
Also is expected a decline in Spain's GDP from 13% to 15% this year and the recovery of pre-crisis indicators no earlier than 2023. At the same time, the study says the real estate sector will experience fewer losses than in 2008.
7. Why don't you renew the walls?
After the abolition of strict quarantine measures and the ban on home reconstruction, 60% of Spanish families decided to make repairs. This is reported by the National Association of Ceramic and Building Materials Distributors (Andimac).
In most regions of Spain, repair work became possible after May 25. According to Andimac, 91% of Spaniards spent more time inside their homes because of the pandemic. Against the backdrop of uncertainty, many buyers have postponed or refused to buy a new home, and the focus has shifted to improve the current living conditions.
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