Rock-bottom property prices and political unrest in comparable destination spots in North Africa are attracting more foreign buyers to Spain, according to one realtor in the Murcia region. Real estate firm Mercers predicted a 25% year-on-year jump in sales in January and the 2013 sales regional record proves out the prognostication. Enquiries have not increased, but experts say the seriousness of them have and more leads are resulting in sales. Meanwhile, Spain’s Economy Minister announced he believes growth could return to the market as early as this year. For more on this continue reading the following article from Property Wire.
Sales momentum is building in some parts of Spain with one well established agency reporting transaction activity up 25% in the first three months of 2013 compared with a year ago.
In January, Murcia based estate agent Mercers predicted 25% increase in house sales for 2013 over 2012 and the figures now back this up.
‘I can’t pinpoint exactly why our sales are up so much, but momentum is certainly beginning to build. It can’t be attributed to an end of year rush before VAT on new builds went up from 4% to 10% on 1 January, as all of our transactions have been resales,’ said director Chris Mercer.
‘Furthermore, enquiries have not increased at the same level but those we have are more serious, have the funds in place and are intelligent enough to know that the window of opportunity on a serious Spanish property bargain will not be open forever,’ he explained. He added that looking over a slightly longer period business is up almost 65% compared with the first quarter of 2011.
The Mercers trend is mirrored overall in the Murcia market. Figures from the National Institute of Statistics (INE) show sales of Murcian property were up 24.1% in February 2013 over the same month the previous year, with 1,169 transactions completed. This is above the national figure of 17.3%.
Agents believe that foreigners are certainly partly responsible for keeping the Spanish property market going. ‘Prices are now very low and, in our area, we are looking at reductions of 40% to 55% from the peak. This is turning the heads of international buyers,’ said Mercer.
According to the Banco de España, 2012 showed the highest volume of investment in Spanish property by international buyers in eight years, up 17% on 2011. This is at a time when demand remains weak on the domestic front as Spain tackles high unemployment and an ongoing reluctance to lend by financial institutions.
The figures show that foreign buyers spent €5.54 billion on Spanish property in 2012, up from €4.7 billion in 2011, and a 52% increase on the €3.6 million of 2009.
A break down of the figures show that property is becoming increasingly popular as overseas buyers bought €1.8 million worth of property in the last quarter of the year, a 56% in on the same period in 2011 and up 92% in the final quarter of 2010.
For Mercers, Belgian, French, Norwegian, Swedish and more recently British buyers have dominated over the past year with some renewed interest from Germans and Dutch.
The overall picture from Spain is perhaps more cheery than it has been for some time. The bad bank (SAREB) has revealed that it hopes to sell almost 42,500 housing units, around half its portfolio, over the next five years in order to help provide a ‘floor and kick start a broad recovery in the Spanish housing market.
‘Foreign demand has been growing in response to lower Spanish property prices and political unrest in competitor destinations in North Africa, making Spain look like a safe bet,’ said Mark Stucklin of Spanish Property Insight.
The official Spanish House Price Index from the Department of Housing fell by 10% in 2012, the first time since records began that Spanish property prices have fallen by double digits in nominal terms, according to the Department of Housing.
Meanwhile the Economy Minister, Luis de Guindos, was recently quoted as saying that growth could return to the country as early as the end of 2013.
This article was republished with permission from Property Wire.