The Spanish property market is likely to recover faster from the debt crisis than its wider economy, with low rents increasingly attracting demand, according to a new report.
Research from German property group IVG said that although the real estate market usually follows in the steps of the wider economy, with a delay of around 18 months, it expects the reverse to happen in Spain.
‘With Spain it is likely that we will see a case of reverse psychology. Although rents will likely continue to fall in early 2011, they will soon pick up,’ said Thomas Beyerle, IVG’s head of corporate social responsibility and research.
There are undoubtedly mixed reports about where the property market in Spain is going, but some developers are also optimistic. Taylor Wimpey de España, the largest British developer in Spain, says that in 2010 Taylor it sold 25% more properties than in 2009, which has resulted in nearly 100% of completed and built property stock being sold.
Looking at the third quarter specifically in 2010 there was a 27% increase in customer enquiries compared to the previous year. These enquiries are primarily for clients seeking holiday and retirement homes in the areas of Marbella, Mallorca and Alicante.
Due to growing high demand and reduced stock available Taylor Wimpey de España has recently launched three new developments in key popular areas in Spain. And despite the off plan market having reportedly gone out of favour, 30% of these properties have already been sold off plan.
‘Undoubtedly the Spanish property market has been hugely affected by the global downturn but fortunes seem to be turning around now for the quality builders with some upward movement in the market. Spain is still one of the most popular holiday and second home destinations in the world for the British and a combination of property price reductions, decreased supply of property in the prime locations and a steady flow of serious purchasers has enticed home buyers,’ said Ignacio Osle, sales and marketing director of Taylor Wimpey de España.
‘Sadly there are areas in Spain which are and will continue to be negatively affected by a mass over supply of homes, however in prime locations such as Marbella in the Costa del Sol or Mallorca, popularity with the British to own holiday homes or even live overseas, will maintain a steady flow of interest and ultimately sales,’ he added.
And Spanish developers are suggesting that the glut of unsold homes on the market is much less than Government estimates. Official figures suggest there are around a million unsold properties. According to David Taguas, president of Seopan, the builder’s organisation, it is just about 350,000 units.