Spain suffered a period of economic uncertainty over the last nine years, but research has shown the country’s economy is bouncing back, with levels of gross domestic product set to exceed that of pre-2008. So, with this in mind, is now the time for Spanish property investment?
Following the launch of the single currency in 1999, Spanish money became incredibly easy to borrow, with interest rates artificially reduced. This ‘cheap’ money led to excessive borrowing, record housing starts and inflated real estate prices.
This extremely high leveraging left Spain highly exposed to the impacts of the global financial crisis, leading to a major crash in the property market, and many construction projects left unsold or incomplete. This along with a shortage of property financing contributed to a steep decline in property prices.
However, since 2014 Spain has been on an upward trajectory, with sustained economic growth – in 2016 it experienced a growth of 3.2 %, outperforming that of other European countries.
The property market is also recovering with average selling prices increasing in the last three years, and transactions increasing, particularly in terms of existing stock. New housing starts also saw a 70% annual increase in 2016, to approximately 85,000 units.
However, despite this rise in prices, Spain remains an attractive investment option in comparison to other Western European markets, except Portugal, and is indeed back on the radar of international investors.
The residential property market in Spain has certainly benefited from investment from foreign as well as domestic buyers. Furthermore, a number of institutional investors internationally have bought property developers, bringing professionalism, as well as capital, to the sector.
Our international brokers have experience in the Spanish property market, and can put you in touch with the appropriate specialists to ensure your transaction runs as smoothly as possible. To speak with our expert team about investing in Spain, get in touch today.