Residential property sales are continuing to fall in Spain and are now just a third of what they were in 2007 before the economic downturn kicked in, according to figures from notaires. On a year on year basis sales as of the end of June were down 26.9%, the figures from Spain’s Council of Notaires shows that prices are down 13.3%. The average price of a home in Spain is now €1,206 per square meter.
There are regional variations and some types of homes are doing better than others. For example, while overall sales of apartments fell by 23% in June, new apartment sales fell even more, by 46% and re-sale apartment sales were down 14% with single family home sales down 23%. Popular locations with overseas buyers have been seeing better sales figures. In particular new homes are being snapped up since the regional government in the Costa Blanca made it more expensive to buy resale property.
‘The regional government of Valencia, home to the Costa Blanca, raised transfer tax (ITP) on resale property to 10% from 8% at the start of this month. The region’s northern neighbour, Catalonia, has made the same change,’ said Richard Way, editor of The Overseas Guides Company. ‘ITP isn’t levied on new build property, but VAT (IVA) is applicable, also currently at 10%, as well as stamp duty. Reports from estate agents are of new projects beginning to come on line in the Costa Blanca, so with resale becoming dearer, brand new key ready properties will be on the radar of foreign buyers,’ he explained.
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‘At the same time, recent statistics from Valencia’s regional government showed that almost half of all property sales in the first three months of 2013 were to foreigners, an unprecedented level and an indication of how valuable the international market is to Spain’s property market along its Costas,’ he added.
Buying a second home and renting it out to holidaymakers has long been a popular option for overseas buyers in Spain but the key to success is location. The most up to data analysis form Rentalia, an online holiday rental site covering Spain, Portugal, Italy and Andorra, shows that the best occupancy rates for rental homes on the Spanish coast this summer are to be found in Menorca, Huelva in Andalusia, and Asturias on the north coast. Based on bookings done through the company, occupancy rates in Menorca were 92.9% this August, 92% in Huelva, and 92% in Asturias.
The lowers occupancy rates in August were Pontevedra at 78.6%, Granada at 79% and Cantabria at 81.8% while Murcia, Ibiza and Malaga are the areas where occupancy rates have increased the most compared to last year. Overall, holiday homes within 15 kilometres of the Spanish coast are enjoying an occupancy rate of 87.4% this August, an increase of 2.5% compared to last year.
‘This has been one of the best summers in recent years for the holiday lettings business thanks to the increase in tourists visiting Spain. Many tourists choose to stay in rented homes because of the freedom and privacy they offer, plus the possibility of saving as much as 50% compared to a hotel,’ said Almudena Ucha, director of Rentalia.