Spain rising: ailing property market now ranks top ten worldwide
Spain’s real estate market has become one of the world’s most popular real estate markets in just half a year. It made it to sixth place in CBRE’s ranking of the world’s most successful property markets after investments into residential and commercial real estate reached $9.3 billion between January and June 2015.
This astounding recovery, up from 16th place in 2013 and 11th in 2014, is yet another sign confirming growth forecasts over the next two years. A notable change is the return of foreign buyers to the marketplace: overseas investors made up 31% of the total investments during H1 2015.
A weakened euro against the British pound and the US dollar has attracted the interest of investors looking for new ways to maximise their capital. At the same time, turmoil in BRICS countries is also benefitting Spain. China’s slowing economy has seen its citizens’ investments into Spain increase almost five times over the last year according to Juwai.com. At the same time, a recession in Russia and easier access to mortgages has heightened interest in commercial property: Russian and CIS investors are currently overspending local budgets by 40% according to the forthcoming Tranio report on Russian and CIS property investment activity overseas 2015.
Tranio’s findings are corroborated by CBRE who reports investors are shifting their interest to commercial property. Furthermore, the office segment is losing popularity to accommodation property such as hotels, hostels and other types of
The local real estate market is benefitting from overall economic recovery, compounded by GDP growth, increased access to home loans and falling mortgage debt. According to Servihabitat, a Spanish real estate agency, price growth could reach 5.0% in 2016.
Our observations confirm the conclusions of the CBRE report: market recovery is still young and prices of property for sale in Spain are still relatively low, which is attracting more and more investors. Currently, commercial property is the most popular, namely retail premises and hotels as well as
income-generatingresidential property. The most popular locations for commercial property are, traditionally, Madrid and Barcelona.
Ivan Chepizhko, Tranio