Spanish property regaining strength.
Posted by jamesdearsley on June 24, 2010
I mentioned back in May that the Spanish property market was showing signs of recovery and I have to say that I still support this theory. Yes, there are still negative reports in the media about the state of the market but the facts are undeniable. The market has stabilised and is regaining strength quickly.
Lets look at interest primarily. We know two major markets in past years have been Spain and France with the latter being the top market recently due to the insecurity in Spain. However, just last week there have been figures released from both Primelocation and Rightmove stating that Spain has again moved back to the top of their searches. In fact, so strong are these two markets that 60% of all searches are attributed to them. An amazing fact.
So that is interest covered. Another good sign is the increase in buyers that we have seen, mainly in the Resale market. The College of Registrars out in Spain showed that sales improved by 16.28% over the first three months of the year compared to the last quarter of 2009. Comparing to the better indicator of the first three months of 2009 show an increase of 7.04% which, though a low base back in 2009, still shows a positive step forward.
Two things may have contributed to this on top of the qualitative thoughts of improved confidence in the market. Firstly there is due to be a VAT (IVA in Spain) increase of 1% on the 1st July which means we have seen a rush of buyers in the last quarter trying desperately to complete before this deadline – another reason resale properties have been attractive due to the speed of the transaction. The second obvious factor, for the British market has been the strengthening of Sterling against the Euro.
We have been predicting it would come for some time. Our FX team have been pulling their hair out knowing that it must happen at some point but getting frustrated that the world hadn’t yet opened their eyes to the problems in Europe. Finally the US started to take notice and stopped using the Euro as a reserve currency and started to pull out once the Greece situation worsened and when it looked likely to spread over to Portugal and others. This is not to mention the funny political meddling Germany had in the whole affair.
All in all this has helped the British recover their market once more and grow in further confidence. When I speak to clients I find it amazing and almost humbling. I had a lady on the phone last week actually break down in tears because she wanted to move to Spain so much. The Brits have a love affair with Spain and I doubt, based on speaking to clients, this will never disappear, it has been temporarily paused but the finger seems to be close to the play button once more