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Spanish Coast Report 2014
02 July 2014 @ 14:21

The report ‘Spanish Coast 2014, prepared by the real estate appraisal company Tinsa, which analyses the current state of housing on the Spanish coast paying particular attention to residential tourism, shows that the property prices on the Mediterranean coast have accumulated an adjustment of 47.7% since their maximum values reached in 2007, compared to the overall average adjustment of 40%. In contrast, the Canary Islands, is the region that has best weathered the housing crisis. The study finds that prices continued to stabilise in the first quarter of 2014, compared to the same period of 2013, yet the appraisal company reflects that sales are still weak and are being maintained primarily by foreign demand.

According to the report, there are areas that have begun to show the first clear signs of stabilisation in the first quarter compared with the values of 2013, such as in Málaga, the east coast and the Catalan coast. In this sense, the lowest annual price declines were registered in A Coruña (-0.9%), Malaga (-1.1%), Mallorca (-3.4%), Almeria (-3.8%) and Ibiza and Formentera (-3.8%). At the other end, the highest annual price reductions on coastal properties were recorded in Lugo (-15.1%), Fuerteventura (-11.9%), Valencia (-11.8%), Huelva (-11.4%) and Castellón (-11.2%).

Another positive indication with regard to real estate on the coast is the timid recovery in the construction sector after the crisis resulted in works being left half-finished, and put the brakes on ambitious urban plans and leisure projects. Some areas, such as the Alicante coast, are experiencing positive changes in the numbers of new building permits. For example, in Alicante, the construction of 57% more homes began in 2013 than in 2012, and in the first quarter of 2014 this trend continued.

Housing demand on the coast usually comes from the domestic market, although it is continuing to lose ground to international buyers. Buyers often originate from the same region in which the property is located or from neighboring provinces, but the foreign client is gaining ground in some areas. The Russians and citizens of Central and Eastern Europe have emerged as the newest buyers in the market for a holiday home, often searching for a high-end product, mainly on the Catalan coast and Malaga.

Foreign residents accounted for more than 35% of the sales transactions carried out in the provinces of Alicante, Gerona, the Balearic Islands, Santa Cruz de Tenerife and Malaga during 2013. Moreover, in the first quarter of 2014, Tarragona, with 51% of total transactions, Santa Cruz de Tenerife (44%) and Malaga (38%) were the areas most attractive to foreign residents. However, El Mundo reported that those foreigners not resident in Spain accounted for a much smaller percentage which, according to the Ministry of Development’s data, did not exceed 6% of the transactions.

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