TOP-6 important news to learn about Spanish property in a Post Covid-19 "New Normal"

From July 1 Spain hаs launched the summer sеason and opened its borders for tourists, but still not for everyone. In this digest, we discuss the most important news concerning Spanish real estate on the eve of the "opening" оf the country after quarantine, and share current market statistics.

The mortgage market in Spain not only survived the quarantine, but managed to show decent results: 125,586 mortgages approved in the first quarter. Larger numbers were reached only twice in history: in 2019 (128,229) and 2011 (173,659). These numbers were reported by the National Statistics Institute.

According to experts, the positive dynamics is explained by the active beginning of the year, when the industry was characterized by proactive development before the quarantine. At the same time, experts predict a significant reduction in the number of mortgage loans in the future. They are confident that the consequences of the pandemic will be noticeable after the second quarter. The Central Bank of Spain, considers a possible increase in unemployment up to 20% to be the main post quarantine challenge.

Spanish notaries call on the Government to recognize the validity of wills made via video. This step was pushed by the COVID-19 epidemic, because of which many older people could not come to a notary, and secondly, notaries, for the most part, did not work. Under such circumstances, it was not easy to legally assure and fulfil someone's last will.

To avoid such delays in the future, Spanish lawyers ask for legalization of the will through gadgets. Thus, if the initiative will be accepted, it will be possible to make wills or to conduct another procedure directly during a video call with a lawyer.

In the first five months of 2020, Spain issued 113 "Golden Visas". The information was provided by the Spanish Ministry of Foreign Affairs. This is more than twice less than for the same period last year (285). Traditionally, the most active are investors from Russia and China, and they have suffered the most significant losses.

As Oscar Larrea, CEO of Engel & Völkers Madrid, notes, there is nothing unusual about it in the current circumstances. Firstly, potential investors were scared of the large number of coronavirus victims in Spain. Secondly, obtaining a "Golden Visa" requires at least a single visit to the country for several months, which is not easy to do while borders are closed.

According to the Spanish appraisal company Tecnitasa, in 2020, the cost of renting holiday homes in the country increased by 3%. The most expensive region remains the Balearic Islands: a week's rent of apartments in Menorca costs on average €2800, in Ibiza – €2200. Similar rates are in Marbella on the Costa del Sol: around €2600 per week by the sea.

Week of accommodation in Alicante is estimated at €1500. And the most affordable in 2020 is the northern regions of Spain and the Canary Islands.

As stated by CBRE, in 2020, real estate in Spain will receive ⅓ less investments than in 2019 (€9 billion against €12 billion). However, Spain remains one of the most attractive countries for foreign investors.

According to analysts, about one in three investment projects in the country was frozen because of the COVID-19 pandemic. About 12% of new ventures were cancelled, 18% are questioned. Thus, the majority (about 70%) of projects remain postponed.

New sanitary regulations, social distancing and other measures to stop the spread of disease cause new buildings to become more expensive, as mentioned by spanishpropertyinsight agency.

On June 9, the country adopted a Royal Decree introducing "urgent measures" to combat the threat of Covid-19 in the workplace. These measures include the wearing of masks, the use of antiseptics, movement around and some other rules that are not easy to comply with on construction sites. As a result, according to experts, workers' labour cost will increase by 7%, while the average price for housing in new buildings will rise by 2.5%. "Urgent measures" to combat the threat of Covid-19 in the workplace will be cancelled with the "end of the crisis in the health sector". Most experts are sure that this will not happen before 2021.