Beautiful Spain – Spanish properties all across the country are destined to increase in value over the rest of the year and maybe even for years to come.
Banks and real estate servicers have predicted a steady rise in house prices, despite market liquidity being a big problem for many different parts of Spain.
A big real estate servicer called Solvia (the property division of Sabadell bank) have forecasted that the average Spanish house prices will be going up by 7.3% between now and 2020, which is fantastic property news for property investors and homeowners who may own a property in Spain as their second home or a holiday home that they are able to rent out.
There will be wide regional differences in house price rises across the country, it will all depend on demand and the rate that people decide to sell at. Bankinter has forecasted that house prices will be up by 4% this year and between 4% and 5% next year. There is a strong demand for houses in locations across Spain that have an ever-growing strong economy, such as in Catalonia and Madrid. They are set to see their house prices go up by a staggering 11% or even by 14% in other parts, which is being driven by rising local demand and tourism.
Spain is going through a housing market growth, which is a positive factor for the Spanish property market. Spanish properties are becoming more and more popular among international developers and investors and more people are looking to buy a Spanish property to have as another base. Spain is a favoured place to visit for a holiday and even a favoured place to live long term. The country has a lot going for it from the scorching-hot climate to their laid back and relaxed way of life, the entire Spanish culture is very appealing for most.
However, the Spanish growth cycle is not uniform around Spain and the growth that they’re going through and expected to go through throughout the rest of this year and next year will not be anything like the last time the Spanish housing market had a rising growth cycle (during 2002 to 2008). Big markets like Barcelona and Madrid are driving the average price of a property up in the housing market while other areas across Spain are not seeing such great results.
Real estate servicer Solvia forecast that the growth in transactions will be between 7% and 8% annually to 564,000 home sales in 2020. Bankinter on the other hand forecast sales up to 550,000 as early as next year, so different predictions are stemming from the housing market, but only time and factual information will be the real indicator of the state of the Spanish property market in years to come.
But what about liquidity in the Spanish housing market? Liquidity determines how fast a property can be turned into cash and Solvia says that only 10% of Spanish areas can be described as liquid or very liquid, in relation to being simple to find a buyer at market price, while 78% of areas are illiquid of very illiquid – which of course is not good property news compared to the value of Spanish properties going up.
International buyers need to stay on top of the housing market in Spain if they’re looking to invest and make big returns on investments. Close attention needs to be given to market liquidity when buying a home in Spain to make sure that there is as little chance of struggle and loss as possible, as of course, that isn’t what a housing investment is based upon.
Written by Gemma Smith