Steady Increase in Spanish Property Sales and Prices During 1st Quarter 2017
The first quarter data for 2017 is looking positive on all fronts so far. Sales are on target for a 5% increase.
Prices are also predicted to show a regional average of 5% increase (though the large cities do skew those figures upwards).
Mortgage demand is healthy, particularly on new homes.
The most eye-catching figure is the dramatic surge in building permits – up by almost 33%! This is driven not so much by demand, but by developers who are keen to take advantage of zero interest rates (at an all-time low) to get their projects started.
This is a chicken and egg scenario. What triggers a booming market, availability or demand? I've always believed in demand-driven markets, but then again, a large selection of competitively priced, attractive property in good locations can also start a demand given the correct amount of marketing.
New-build projects have always attracted investor markets as well as individual home buyers, so with this amount of building permits issued, I would expect there to be a welcome return of investors to the Spanish property market in Murcia region in the very near future.
Current Market Conditions.
One of the most important factors in our business, apart from the above mentioned 'demand' and 'availability' is the prevailing 'market conditions' – there are so many variables that can come together to help and conversely some that can totally disturb it. We saw for example how Brexit disrupted the market last year, sending exchange rates and buyer confidence down for several months! This time last year the exchange rate was; 1.29€ to £1. At present we are 1.18€ to £1 – making Spanish property around 10% more expensive than a year ago.
In the coming months we expect to see the availability and demand for Spanish property increase. Virtually all of the institutions agree with this – a stronger pound would certainly help put the extra fizz back into the market.
Fuente Alamo Real Estate/Murcia Coast & Country
Tel 0034 968 598 173