Residential property prices in Spain are expected to continue rising for the rest of the year, even if the current growth, slows, according to a new analysis report.
Property sales, prices and building activity have all increased in 2016 and the report from bank BBVA suggests that this will continue in the coming months.
The Spanish property market recovery is being fuelled in part by improving mortgage conditions and a sharp increase in tourism which has pushed up demand for holiday homes along the Spanish coast.
However, BBVA has suggested that the second half of the year might not be as good as the first half, as there are signs that growth in the Spanish economy could moderate.
‘Lower economic growth and what that does to consumer confidence is expected to knock some of the wind out of the sails of the housing market recovery,’ said Mark Stucklin of Spanish Property Insight.
‘Even so, BBVA expect new development to continue expanding on the back of stronger demand and the gradual disappearance of the new homes glut, at least in areas where there is demand, such as big cities and popular coastal regions such as the Costa del Sol and the Costa Blanca,’ he added.
The latest figures from the Association of Registrars show that average property prices in Spain rose by 7.5% in the second quarter of the year, compared to the same period of 2015, while sales climbed by 23.7%.
Compared with the first quarter of the year, home sales increased by 8.5% and prices rose by 2.2%, the data also shows and price growth is continuing to reduce the decline accumulated since the peak of the housing market in 2007 which has fallen to 26%.
New home sales are also rising, up 0.8% quarter on quarter, suggesting that this side of the housing market is recovering too.
Foreign buyers accounted for almost 14,000 of house purchases, representing 13.4% of all the housing transactions carried out, compared to 12.9% in the first quarter of the year while year on year foreign buyers were responsible for over 51,500 transactions, around 13.4% of the total housing transactions.
British buyers made the greatest number of purchases at 19.73% of the foreign sales, followed by Germans at 7.38%, French at 7.5%, Swedish at 6.95%, Italians 5.99% and Belgians 5.63%.
Separate research has named Hernani Street in San Sebastián as the most expensive in Spain with property prices averaging €12,700 per square meter, a 6% increase over last year. Spacious apartments with large windows or terraces that open towards La Concha Bay are the most exclusive in the city.
In second place is Pearson Avenue in Barcelona reaching €12,000 per square meter, with Serrano Street and Plaza Independencia in Madrid third at €10,000 per square meter, according to the research from Engel & Völkers.
The firm points out that although properties in these streets are very different from each other, there are common elements among them. Indeed, the most sought after are modern and minimalist homes that retain their original structural elements with features including original pillars and beams that are incorporated into the overall design and modern decor. These properties are often located in historic buildings and have views of the most representative areas of the city.
It also says that luxury homes are still a scarce commodity in many of the most exclusive areas of Spain. This shortage of supply is ahead of the huge international demand that has led to an increase prices in Spain’s major cities, a situation that is expected to be maintained in the near future as the demand by European and American buyers seeking investment property continues.
Property prices in spain increases were between 4% and 6% in the majority of the locations researched and there was a double digit rise in the most exclusive addresses in San Sebastián, specifically Hernani Street and Valencia’s Colón Street. Article by propertywire