2016 a good year to invest in spanish property

Home \ Personal \ Overseas Properties

2016: A good year to invest inSpanish property?

Since the economic downturn of 2008, property prices in Spain have fallen around

30%.2016 looks set to be the year that the Spanish property market finally ‘bottoms’

out and sees a 2% rise according to the rating agency Standard and Poors. Central to

February 18th, 2016 Author: Natasha Wood RSS-Feed

ANALYSISNEWSLETTERSubscribe Now

Related Articles

Popular Articles

Dubai property market: 2016 set forsubstantial foreign investment

How foreign currency movements canaffect your overseas mortgage

How can I rent a property for long termabroad?

Tips for buying property in France

Sign Up Log In GET QUOTE PERSONAL BUSINESS TOOLS SUPPORT

PDFmyURL - online url to pdf conversion

this recovery, will be Spain's continuing robust economic recovery into 2017, which is

seeing steady improvements in the countries desperate unemployment levels and

rising middle-class household income. If 2015 will be remembered as the year when

the Spanish economy finally started to see some light at the end of the tunnel, then

2016 - 2017 could well be the year that nation emerges from that tunnel, and finds

itself on the path to stable economic growth. Before we get too optimistic though,

we should be under no illusions that the Spanish economy still has significant

structural problems, public debt remains stubbornly high and while market reforms

and investment in innovation are increasing, there is still a long way to go before

Spain’s economy can really declare itself on the road back to health. This being said,

foreign investors, who once shunned the Iberian nation for its toxic mix of free falling

real estate values, debilitating unemployment levels, and troubled banking sector,

appear to be staging a return!

Good signs from International buyers

The Spanish property market has always been heavily influenced by international

buyers, with an estimated 18% of the market believed to be from overseas

investment. In some regions such as Marbella and Alicante the figure is over 50%.

Spain's recent economic woes have been compounded by a reduction in overseas

investment in recent years, but 2015 saw transaction numbers, mortgage approvals

and prices all move in the right direction. While certainly, there is now room for

optimism, the market does remain fragile, as a reduction in mortgage approvals and

transaction towards the end of 2015 revealed. Even the most pessimistic of analysts

City Guides: Vancouver

Dubai property market: 2016 set forsubstantial foreign investment


out there though, are likely to concede, that in all likelihood, the property market has

at the very least, bottomed out.

Regional Variation

Clearly breaking down the regional variations provides more of an insight into exactly

what’s going on within the Spanish property market. Last year the majority of

property transactions in Spain occurred on the Mediterranean coastal regions, the

Canaries, and the Balearics with overseas buyers accounting for 30% to 60% of all

purchases. Even within these regions there is significant variation in terms of the

pace in price change. For those looking for an investment opportunity with a slightly

smaller budget though, and a greater degree of flexibility on location, areas to the

north and south of Valencia are proving an increasingly attractive option. Along with

being located near three stunning coastal locations, the recent opening of Castellón

airport makes this region all the more accessible. Should more airlines connect with

this airport (and there is no conceivable reason why they wouldn’t!), its well within

the realm of possibility that prices in the region will rise.

Spanish property still a good investment?

When looking at the Spanish property market from an investment point of view. The

fact prices have finally ‘bottomed’ out and are on the rise again after all those years,

should be weighed up against the price fall from peak of 30%. Assuming Spain

remains a desirable destination for tourists and foreign investment, and assuming the


Spanish economy can maintain a stable growth rate, there is real potential for capital

growth in the market. 2015 proved an impressively strong year for rental yields,

particularly in high end, furnished properties located on prime coastal locations,

where seasonal occupancy was at 100%. It’s worth remembering, that while the

property and location is of course important, it should not be the sole focus of your

thought process when considering investment opportunities. Assessing whether long

term or short term lets will present more opportunity in terms of higher yields, will

also be influenced by the region. It may well be, that the best option for optimizing

returns on your investment, is short term holiday lets, which take advantage of strong

seasonal demand. However, some regions have now legislated against short term

holiday letting (Barcelona) due to pressure from hotel lobby groups and unhappy

locals. With region like Andalusia (where returns on investment have traditionally

been impressive), potentially set to follow, be advised to do all your research on this

issue beforehand!

Forex volatility set to continue in 2016

The pound has been up and down like a yoyo against the Euro since the start of the

year, complicating life for all those would be British buyers of Spanish property. So

dramatic has this volatility been, that Sterling has already surrendered the gains that

it enjoyed last year against the Euro. There is a number of reasons behind the

volatility we are seeing, with an increasing spectrum of global pressures continuing

to dominate the markets. Falling commodity prices, the collapse in the price oil and

the Chinese stock markets crashing all in the first few weeks of 2016 have sent the


currency markets into turmoil. With the uncertainty of the UK’s European Union

referendum coming up this year as well, expect a sluggish performance from Sterling,

at the very least over the short term.

Overall, the tide does appear to be turning for Spain's real estate market. The

encouraging signs of recovery appear to be instilling confidence once again in those

all-important foreign buyers. How long this confidence lasts though, will depend on

how long the recovery lasts, and while there is plenty room for optimism, the

challenges that lay ahead for Spain, should not be underestimated.

About the Author

Natasha WoodContent Marketing Executive

Share

FACEBOOK LINKEDIN TWITTER GOOGLE+

FCA and HMRC authorisedand regulated


POPULAR

Currency Converter

IBAN Checker

SWIFT Checker

Sanctions Checker

Exchange Rates

Save Money on Large Currency

Transfers

Bank Beating Exchange Rates

Save Money on Large Currency

Transfers

Great Foreign Exchange Rates for

Large Transfers

How Currency Transfers work

CONTACT US

Hobbs Court, 2 Jacob Street, London SE1 2BG

+44 (0)20 7740 0000

Disclaimer Privacy Policy Security of Funds Sitemap Cookies About Us Currency News © Currency Solutions


2016 a good year to invest in spanish property

Travel