According to the latest report from property valuation firm Tinsa, the Spanish property market is experiencing a widespread recovery. Average property prices were down by two per cent year-on-year in July, the lowest rate of decline since May 2008 but this masks growth areas along the Mediterranean coast in particular with some areas seeing price growth of 2.8 per cent over the same period.
The figures show that on the Mediterranean coast, where prices have fallen by an average of 47.6 per cent since the economic downturn, the average price of a home has increased by 3.8 per cent since the end of 2014. This is more than large cities and the Balearic and Canary Islands where average prices have risen by 0.2 per cent and 0.9 per cent respectively.
Meanwhile, Standard & Poor’s, the credit ratings agency, is predicting that the slump in the Spanish property market will be over by the end of the year and forecasts a 2.5 per cent increase in the average price of property. This is based on the perception that the general economic recovery in the country is gaining momentum, and the agency predicts that prices will continue to rise by another 2.5 per cent in 2016 and by 4 per cent in 2017.
More evidence of the recovery comes from the home building industry, which has also turned a corner after rising two per cent last year, the first increase in seven years. Planning approvals for flats increased by most, up by 36 per cent while single-family homes were up 13 per cent.
This might explain why Spain accounted for just under half (45 per cent) of enquiries we received in the second quarter of 2015, consolidating its performance in the first quarter of the year. Increasing levels of confidence among investors means that many people who have been putting their plans on hold are making a move in order to benefit from bargain prices and the fruits of a market recovery.
Even famous faces are tapping into the recovery. David Beckham has finally sold the Madrid mansion he put up for sale nearly ten years ago and pocketed £ 1 million profit in the process. David and wife Victoria’s hopes for a quick sale fell through when the Spanish property market crashed in the recession after David’s 2007 move to the USA, and the property lay empty for several years while the couple lived elsewhere. But the shrewd couple have taken advantage of the recovering market and reaped the benefits.