The property market in Spain is in the throes of a long awaited recovery and the forecasts made by Servihabitat, the real estate arm of the Spanish bank La Caixa, reflect this. The company predicts that sales will hit 440,000 in 2016, a 10% increase on 2015 total sales, while prices will rise by 3.8%.
The market is in good shape according to Servihabitat, being driven by an increase in demand particularly from investors as well as a rise in the concession of mortgages, low interest rates and a recovery in the Spanish economy with unemployment in Spain dropping below the 4 million mark for the first time in 6 years in May.
Another positive sign is that property is becoming more affordable in Spain. At the height of the property boom the average price of a Spanish property was 9 times the country’s average wage, this has since dropped to just over 6 times the average wage today.
There is also a prediction for the stock of new-build properties up for sale to drop by 25% in 2016 from 492,000 in 2015 to 367,500 at the end of 2016. The reduction in stock is also helping reignite new-build development in Spain, the number of building licences granted in the first quarter of 2016 was the highest since 2011.
Rental property has gained some ground during the crisis but is still very much a second choice option for Spaniards with just 21% of property in Spain being rented. 13.9% of rented property is inhabited by foreigners and the nations from which the majority of tenants come from are Marocco, the UK, Romania, Italy and Latin American countries.
Main image: A photo of the Arenales Playa Phase 8 development on the Costa Blanca © TM Grupo Inmobiliario