After a 2016 in which a much greater number of people looked to buy apartments in Estepona, Sotogrande, the Costa del Sol and other desirable areas of Spain than the year before, it seems that the country’s property sector is now headed towards “normalisation”, at least according to one prominent solicitor’s firm.
“Normalisation” after a “sharp upswing”
Fuster & Associates observed that the end of 2015 and start of 2016 saw a “sharp upswing” in the market, which had begun to recover in 2014 “after the profound crisis that afflicted it since midway through 2007, deflating the prices of some properties by up to 50% and almost completely paralysing production.”
It went on to describe the market’s ongoing “normalisation process” as “interesting”, while stating that it could take between 15 and 20 years to “fully digest all of the excesses of the boom”.
The firm continued: “2016 could be defined as one of stabilisation after the sharp upswing that, between the end of 2015 and the start of 2016, affected prices, purchase agreements, mortgage signings and the start of new promotions, all the main variables that measure the health of the residential market.”
Different areas recovering at different speeds
As the firm has also observed, another recent trend in the Spanish property market has been for different areas of the country to recover at different speeds, depending in large part on economic activity and employment in those areas. Cities including Barcelona and Madrid, as well as some enclaves of tourist properties in such areas as the Costa del Sol, were among the localities to see the most pronounced growth.
Fuster & Associates also made note of the high level of overseas interest helping to power forward the recovery, with almost 20% of transactions recorded by property registries undertaken by foreigners. As the firm’s report commented: “This important volume will not only affect overall annual sales, but also prices given that many of these foreigners acquire luxury homes”.
The report also declared that the rental market in Spain had seen strong growth, having increased from 7% of the total housing stock to 22.7% in 2015, amid suggestions that this figure may have already exceeded 25% nationally and be much higher than even this in Barcelona and Madrid.
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