Spain’s real estate recovery hinges on 5 local markets
The revival of Spain’s property market has been confirmed by continued transaction and price growth. However, local property markets are not all equal: 70% of all transactions were made in five major destinations and over 75% of all sales were for existing property. Experts largely agree that the country’s real estate is back on track but there are still obstacles to be overcome. Geographical disparities on a regional level, the lack of
Prices are growing
The average price per square metre in Spain was €1,619 in December 2015 according to fotocasa.es, a major property portal. At the same time, prices grew 6.62% by Q3 2015
Data by Eurostat, the statistics office of the European Union, confirms the positive trend. According to their most recent report, prices grew 4.5% in Q3 2015
The general consensus on market growth is a positive sign for stakeholders and property owners, even if 2016 forecasts diverge.
Apartments show the most promise for Spain’s residential property market. Prices for new flats gained 5.9%
Price growth for
Existing home sales hit record high
Transactions are also on the rise, mainly to the benefit of secondary market property. The proportion of existing homes in the annual sales total hit a record high according to the Colegio de Registradores, thus marking an inevitable historical low for the sale of
Existing homes composed 76.39% of all transactions over the year while new-builds attracted less than one in four buyers (21.17%).
Apartment sales grew by 6.2%
More hope than growth for most markets
Andalusia, Catalonia, Valencia, Madrid and the Canary Islands attracted the most buyers last year: 70% of all transactions happened there between Q3 2014 and Q3 2015.
However, market segregation runs even deeper. Take Andalusia for example. This autonomous community attracted the most buyers, selling
Some regions are bigger than others
The breakdown of sales by region sheds better light on the major differences between regions: only a handful of real estate markets are rallying but peripheral regions are not on the same trajectory.
Regional markets capture most buyers
|Las Palmas (Canary Islands)||10,184||1,319|
For example, Soria (region
All this points to a simple fact: the most expensive regions have the highest prices, suggesting that their dominant position in the market place is particularly important for Spain’s positive growth trend. In fact, only four regions have prices above the national average: Madrid, Barcelona, Malaga and the Balearic Islands.
Where is the money going?
The overwhelming reality is that, with the exception of landlocked Madrid and Seville, most growth is concentrated along the Mediterranean coast and the Atlantic regions of Asturias and A Coruña.
The country’s top two local markets in terms of prices and transactions are real estate in Madrid and property for sale in Barcelona. With nationwide joblessness still hovering around 20% and economic growth still well under
Foreign buyers, tourism and popular markets
Tourism has left a distinct imprint on the distribution of growth in Spain. It is one of the country’s biggest industries, attracting over 60.8 million visitors between January and October 2015. One quarter of them were British.
The hottest real estate markets in Spain are also home to the country’s biggest airports in terms of tourist traffic. According to AENA, the Spanish Aviation Authority, 14 tourist airports received 95.1 million passengers in 2014 — ten of them were located in the country’s 5 dominant real estate markets (Andalusia, Catalonia, Valencia and the Canary Islands), the remaining four on the Balearic Islands. Hub airports, Madrid and Barcelona, received 79.4 million passengers between them.
Top foreign buyer nationalities
|Rank||Nationality||Share of foreign
|Share of total
British buyers in particular are important to price dynamics because they are the biggest foreign buyer group, but also because they have higher income, a good exchange rate against the euro and strong price growth at home is forcing many second home buyers to explore foreign alternatives that are better value for money.
Britons bought one in every five Spanish homes sold to foreign nationals between Q3 2014 and Q3 2015.
The capital Madrid, one of the most expensive destinations per square metre, is particularly popular with Chinese investors looking to benefit from the country’s “golden visa” programme.
At the same time, Russian investors are moving in on Spain’s commercial property amid economic turmoil at home. In 2015, they spent 40% more than the average budget on
Real estate experts are not worried: the pick up in house prices and transactions has stimulated the country’s