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What next for Spain’s expat real estate market?
| Published: | 15 Feb at 6 PM |
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Traditionally a favourite for British expat retirees, Spain and its real estate market are caught between currency exchange rate instability and a lack of Brit expat buyers due to Brexit uncertainty.
Following the 2008 financial crisis, Spain’s formerly successful property market slumped to a low point from which it had barely recovered when the Brexit referendum moved its goalposts yet again. Although house prices had staged a positive recovery, they’re still below those considered normal before the financial meltdown. One major real estate agency notes Barcelona’s prices in 2018 were 20 per cent lower than in 2008, and rural property prices were down by 24 per cent. In 2019, real estate values are now being badly affected by the confusion and chaos of Brexit and the resulting fall in the value of sterling.
Would-be British buyers have seen their buying power reduced by around 25 per cent, and their numbers have been diminished by the seemingly unending uncertainty. The risk of a no-deal exit from the EU isn’t exactly encouraging buyers, with would-be expats sitting on their wallets until some kind of economic stability returns. For Britons selling up in order to repatriate it’s a different story as, should they be able to sell their Spanish property or have enough spare cash to buy in the UK, they’re in a far better position due to the strength of the euro against the pound.
According to Bloomberg, the Spanish real estate market is now split into two halves: a boom in expat and tourism hubs and a further falls in rural areas. For those needing a mortgage, interest rates are refreshingly low and the Spanish banking sector is finally cleaning up its act. For 2019, property values in prime locations such as the Costas, the Balearics and the Canaries are expected to rise in value, but for buyers not averse to the British obsession with do-it-yourself, rural properties are now at bargain basement levels and likely to stay there for the foreseeable future. All it needs now is an end to the pointless Brexit negotiations and a positive stand on behalf of the Spanish government in favour of allowing potential British expatriate property purchasers a free hand.
Following the 2008 financial crisis, Spain’s formerly successful property market slumped to a low point from which it had barely recovered when the Brexit referendum moved its goalposts yet again. Although house prices had staged a positive recovery, they’re still below those considered normal before the financial meltdown. One major real estate agency notes Barcelona’s prices in 2018 were 20 per cent lower than in 2008, and rural property prices were down by 24 per cent. In 2019, real estate values are now being badly affected by the confusion and chaos of Brexit and the resulting fall in the value of sterling.
Would-be British buyers have seen their buying power reduced by around 25 per cent, and their numbers have been diminished by the seemingly unending uncertainty. The risk of a no-deal exit from the EU isn’t exactly encouraging buyers, with would-be expats sitting on their wallets until some kind of economic stability returns. For Britons selling up in order to repatriate it’s a different story as, should they be able to sell their Spanish property or have enough spare cash to buy in the UK, they’re in a far better position due to the strength of the euro against the pound.
According to Bloomberg, the Spanish real estate market is now split into two halves: a boom in expat and tourism hubs and a further falls in rural areas. For those needing a mortgage, interest rates are refreshingly low and the Spanish banking sector is finally cleaning up its act. For 2019, property values in prime locations such as the Costas, the Balearics and the Canaries are expected to rise in value, but for buyers not averse to the British obsession with do-it-yourself, rural properties are now at bargain basement levels and likely to stay there for the foreseeable future. All it needs now is an end to the pointless Brexit negotiations and a positive stand on behalf of the Spanish government in favour of allowing potential British expatriate property purchasers a free hand.
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