Housing Update August 2017

Spanish Property sales are Booming! – But not evenly.

Researching this month's column I have found many headlines praising the continued upturn in the Spanish property market.

It appears that indigenous and foreign property buyers in Spain are out in force, devouring homes at the greatest rate since the economic crash, but dig a little deeper and you will uncover the truth behind these joyful headlines.

Primarily, you have to check the source of these upbeat assertions; many of them are dubious press releases and skewed analysis from organisations that have a vested interest in selling or investing in Spanish real estate. Such headlines can send share prices and their egos soaring into the stratosphere, whilst the official bodies such as Tinsa (Spain's largest official valuation company), or the government agencies for Notaries, Land Registry and Euro statistics are lagging indicators; sometimes up to 6 months behind the current trends. To find out what is really happening in today's market, we often have to wait a whole quarter.

So, are those positive headlines "Fake News"?
Well not really, but they do relate to a different segment of the real estate industry here in Spain. There are hundreds of millions of Euros being invested in Spanish property, but it isn't all coming from individual foreign buyers!

US investment funds, wealthy global conglomerates from the Middle East and Asia are buying up business parks, large empty apartment complexes, international 5 star holiday resorts and hotels and building new retail parks in the big cities like Barcelona and Madrid and the hyper-tourist areas of Costa del Sol and the Balearics.

Let's face it, our region of Murcia and the Costa Cálida is in none of those categories. We all love and enjoy our secret paradise here, well away from the brash mass tourist areas described above. We can drive on quiet scenic roads, get a game of golf when we want and don't really have to queue for anything except in July and August. Conversely, when it comes to investment and speculation, the real money goes elsewhere. As a result, our properties don't really see major increases in value compared to Barcelona (up 22% in the past year), nor do we see hordes of buyers with half a million in their pockets.

Also in those fanciful headlines were claims of massive increases in holiday rental prices and large demand from holiday home buyers. Yes we are seeing that too, but in a much diluted version.

In summary, our comfy little region of Murcia is - little by little - still growing, but in a more controlled and manageable way. We're not booming, not producing sensational headlines to attract the Spanish property media like a plague of locusts, so as a result and most importantly of all, we're still one of Spain's best kept secrets.

Kenneth Whettall
Commercial Director
Fuente Alamo Real Estate/Murcia Coast & Country
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