A new generation of British buyers are entering the Spanish property market – lured by cheap homes. UK agent sales are up on this time last year, with more Brits choosing investment properties in locations such as Turkey and Egypt. But buyers who were putting off finding holiday homes during the recession are also returning to traditional destinations such as Spain.

Holiday-home buyers in Spain and France still dominate the market – and many have decided now is the time to buy. The two countries made up two-thirds of UK based broker Conti’s overseas mortgage business last month.

Enquiries for Spanish properties make up 92% of the current demand, compared with 50% just two years ago. Two-thirds of our clients have been registered with us for over a year. Most people have thought about buying before – Spain isn’t a new destination for them. But there’s been some recognition that maybe prices won’t go down further.

Tags: bargain prices, buying property in Spain, House prices, Mortgage Lending, Property market trends, Spanish property
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Asking prices for resale properties fell just 0.9% over 3 months to the end of March, according to data collected by Idealista.com, a leading Spanish property portal. The table above gives price changes for selected regions.

As a result, the average asking price of property in Spain finished March at 2,387€/m2, with wide variations between regions. The Basque Country has the most expensive property (3,482€/m2), followed by Madrid (€3,282/m2) and Catalonia (2,828€/m2). Regions at the other extreme, with the cheapest property, are Extremadura (1,437€/m2), Murcia (1,506€/m2) and Castilla-La Mancha (1,627€/m2).

Changes in asking prices are an important market indicator, as vendors tend to raise or drop their asking prices in response to demand. Nevertheless, they are not an accurate guide to transaction prices.

Tags: House prices, Property market trends, Spanish property
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Spanish property purchases were up by almost 19% in February compared with the same month last year, with 41,033 sale & purchase operations being recorded, consolidating the 2.1% increase recorded in January.

The latest figures, released today by the National Institute of Statistics (INE) show the biggest increase so far during the recession, with no increases at all having been recorded since 2008 until the beginning of this year.

In absolute terms, Andalucia recorded the highest number of homes sold in February (7,449), followed by Madrid (7,018), Catalunya (5,514) and Valencia (4,896).

Tags: Property market trends, Recovery, Spanish property
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A surge of foreign lifestyle buyers and investors has split the Spanish property market. Sales are up 200% in some regions compared with 2009 – despite the Bank of Spain claiming that last year was the worst in a decade for foreign property investment in Spain.

Parts of Spain are doing really well at the moment but there are two completely different markets. The split has seen lifestyle buyers choosing less built-up areas such as the Axarquia, where prices are at their most affordable level for years. Meanwhile, investors are looking for distressed bargains in over-developed locations such as the southern Costa Blanca.

Building restrictions in the Axarquia over the last few years have kept stock levels relatively low, while a glut of homes has emerged in other destinations on the Costa del Sol. In areas like the Axarquia and Colmenar the offer is quite limited already. The British know Andalucia is a premium location and are taking advantage of interesting current prices.

Story from OPP

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Buyers are back looking for holiday homes. Mortgage broker Conti Financial Services, which specialises in overseas mortgages, reports a big increase in mortgage applications and the busiest month for over a year.

The foul winter in the UK has probably helped concentrate buyers’ minds on that place in the sun and mortgage applications rose by 48% in March compared with the previous monthly average.

European banks have not suffered as much from the sub-prime crisis as UK mortgage lenders and Conti says that overseas mortgage providers have money to lend to foreign investors. ‘Falling property prices across many European destinations – in some instances by as much as 50% – mean that the chance of owning a place in the sun may never be better, and historically low interest rates mean it’s become even more affordable for British buyers,’ says Clare Nessling, Conti’s operations director.

‘The most popular destinations amongst our clients are still France and Spain, both of which come with easy access and good rental opportunities,’ she says.

Nessling reports bargain hunters out in force in Spain where oversupply of properties and fears about planning permission have left the banks holding repossessed properties which are being sold off. ‘Confidence is definitely growing, but there’s also an element of buyers snapping up bargains in traditional hotspots while they have the chance.’

So where will you find a bargain? ‘Those European countries yet to record their first quarter of growth since the credit crunch include Spain, Denmark and Ireland where an oversupply of stock is holding back prices,’ says Liam Bailey, head of residential research at international estate agents, Knight Frank.

Tags: bargain prices, buying property in Spain, financial crisis, House prices, Mortgage Lending, Spanish property
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There’s a growing feeling of confidence amongst prospective overseas property buyers, according to Conti, the overseas mortgage specialist. It’s just had its busiest month for almost a year in terms of mortgage ‘go aheads’, the point where prospective buyers take their mortgage quotes through to the application stage. These increased by 48 per cent during March, compared with the previous monthly average. The proportion of prospective buyers progressing from the quote stage to the go ahead stage has also increased, suggesting that buyers are becoming more serious about their intended investment.

Despite the turbulence unleashed on the UK mortgage market by the global banking crisis, Conti says that overseas mortgage providers have a healthy appetite for lending to foreign investors. But a combination of factors, not just mortgage availability, are contributing to the attractiveness of this market. Falling property prices, in some cases by up to 50 per cent, and historically low interest rates are making it much more affordable, despite the current strength of the euro.

Clare Nessling, Conti’s Operations Director, says: “Falling property prices across many European destinations mean that the chance of owning a place in the sun may never be better, and historically low interest rates mean it’s become even more affordable for British buyers. The most popular destinations amongst our clients are still France and Spain, both of which come with easy access and good rental opportunities. Confidence is definitely growing, but there’s also an element of buyers snapping up bargains in traditional hotspots while they have the chance.”

Tags: buying property in Spain, Mortgage Lending, Property market trends, Recovery, Spanish property
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The latest figures from the National Institute of Statistics (INE) show that the Spanish property market grew by 16% in February compared to the same month last year, building on the trend started in January. This suggest the market has touched bottom and is starting to recovery after 2 years of declines, at least in some areas. Not including social housing, there were 35,720 home sales in February, 21,368 of them newly built and 19,665 resales.

Story by Mark Stucklin

Tags: Property market trends, Recovery, Spanish property
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The report from Savills International Research revealed how far the overseas property market in the UK had fallen over the last year. Just 2% of the 430,000 foreign-home owners in the UK bought their property in 2009, compared to 70% who bought between 2003 and 2008.

“By spring 2009 Savills International noted that interest in international holiday homes had returned, albeit at far lower levels than previous years,” said the report. “The market has now reverted back to traditional, end-user buyers (as opposed to investors), and mostly in traditional, established hotspots.”

The high number of distressed sales that have contributed to oversupply and falling prices has helped keep pure investors out of the market, it added. “In contrast to previous years, investors solely seeking to capitalise on upward price movement are no longer active in the market place.”

Savills’ head of international, Charles Weston-Baker, told OPP that mid-market buyers had also started to return to the market. “We have started to see more grassroots sales coming through,” he said. “The very top of the market has largely been unaffected, but now end-users who are looking for lower-priced but quality property are buying to enjoy the product.

“We’ve also noticed how important sport has become to buyers, especially for baby boomers and those retiring. There’s a new enthusiasm for experiential holidays and buyers need a reason to be somewhere, such as golf or horseriding. We seem to have jumped 20 years in aging, where people are slowing down at 80 rather than 60.”

The report predicts another quiet year for the UK holiday home market, with most sales taking place to high-income lifestyle buyers in traditional locations, with little activity in the speculative or off-plan markets.

The proportion of people buying in major cities and in villages grew substantially at the expense of smaller towns and isolated rural locations. The popularity of purpose-built resorts also increased.

“This reflects not only the growth in preference for such developments but also the rise in quality and quantity of such communities,” said the report. Interest in buying property to renovate or improve also fell, mirroring the rise in resorts where ready-to-go homes maximise letting potential.

Savills’ market has become skewed towards mid-to-top end buyers, and properties worth more than £200,000 now form the majority of purchases, with a particular fall in popularity of homes worth less than £100,000.

Story from OPP (registration)

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The bust is dead, the Spanish property market’s recovery has begun! That’s how some leading daily papers like El Pais are interpreting the latest figures from the National Institute of Statistics (INE) showing the market grew ever so slightly in January. Well, I wouldn’t try to claim a vigorous recovery is underway, but there’s no denying the market appears to have found a floor, which is an improvement on the 2 years plus of monthly declines we had before.

So what happened? Well, figures for January from the INE show that, excluding social housing, there were exactly 34,000 sales in January, up 1.4% over 12 months. A year-on-year increase of 1.4% is no big deal, but it’s a much needed respite when it is the first time in 3 years that the market has actually grown. And it’s difficult to dismiss it as a one off, because it is clear that the market has now found a floor around 30,000 transactions per month.

But, of course, we have to keep in mind that the market in January was 56% smaller than it was in January 2007, when it stood at 77,400 sales per month. So a year-on-year improvement is good news, but peak-to-trough the market is still just a shadow of its former self. Until that situation changes, there’s not much to cheer about.

If you dig into the figures you find that most of the improvement is now coming from resales, not new builds, as the chart shows. New build sales kept the market from total annihilation last year, but I’ve been warning for months that, sooner or later, they might fall off a cliff.

Story by Mark Stucklin

Tags: buying property in Spain, Property market trends, Recovery, Spanish property
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There was a small uptick in Spanish housing sales during the fourth quarter of last year, according to data released yesterday by the Ministry of Housing. Small, maybe, but enough for the Government to get excited about.

Beatriz Corredor, Minister for Housing

“The transactions in the fourth quarter represent a rise of 4.1% with respect to the same period last year, this being the first year-on-year rise since the fourth quarter of 2006,” goes the first sentence, in bold, of the Ministry’s press release.

In fact, if you just look at the ordinary housing market, the uptick was even better. Excluding social housing there were 116,664 house sales in Q4, a rise of 5.5%. Sales in the province of Malaga went up 3.6%. Regrettably, that’s where the good news ends.

Take the year as a whole, there 413,112 transactions last year, a fall of 19% compared to the previous year, and a whopping 46% down on 2007. Even the Q4 was down 33% compared to 2 years ago.

Some regions did better than others. Looking at a selection of regions popular with holiday home buyers, the inland province of Teruel suffered the most in 2009, down 36%, followed by Las Palmas in The Canaries, down 32%. At the other end of the scale, Spain’s two big cities did the best, down just 1.7% in Madrid and 3.9% in Barcelona.

Story by Mark Stucklin

Tags: Madrid, Malaga, Property market trends, Spanish property
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