Bargin prices of Spanish property are proving attractive to investors
British buyers may no longer be buying property in Spain but the Swedish are increasingly interested in bargain prices in the country.
According to The Real Estate Agency, the Spanish division of Fastighetsbyrån, Sweden’s leading real estate firm, requests increased 58% in the first quarter of 2012 and June is set to be the second best month for 2012 so far.
Daniel Nilsson, regional manager of The Real Estate Agency, said that Swedes are the biggest buyers at the moment.
‘Strong European nations such as Sweden are really beginning to push hard into the Spanish real estate market. Given Sweden’s healthy economy and strong krona, Swedes are extremely realistic about the current economic climate in Spain and recognise that they can buy at a good price,’ he explained.
In 2011, the agency sold almost one in four of all resale properties in Spain to Swedes.
‘Swedes are happy to tap into the somewhat neglected resale market which affords more variety than the new build sector,’ he added.
Bargain prices are also proving attractive. In the first three months of the year Spanish house prices fell 12.6% year on year, their sharpest decline since current records began.
The figures from the national statistics institute, INE, marks the biggest fall since it began collecting data in 2007, easily beating the previous trough of 7.7% in the second quarter of 2009.
In a report earlier this month, the International Monetary Fund (IMF) said Spanish house prices could drop by almost 20% this year under an adverse scenario.
The INE data shows how prices are faring in different regions. Andalucia saw price falls of just 9.8% whereas the Balearic Islands were down 14.9%, as were prices in Aragon and Catalonia.
The latest house price index published by Tinsa, a leading appraisal company, showed a decline of 11% in May compared to the same time last year, with house prices on the Mediterranean coast, where most holiday homes are located, and from the peak of the market to present are down 14%, with the Balearic and Canary islands down 24%.
All these figures are too rosy, according to Mark Stucklin, of Spanish Property Insight.
‘It seems the measures recently introduced by the government to bring down house prices are having some effect. Or maybe we are just reaching the point where official figures can no longer keep up the pretence that house prices haven’t fallen as much as they have,’ he said.
He believes that in reality the prices at which properties actually sell are down by between 30 and 50%.
‘Rosy official figures are no laughing matter. They cause people to wait for price falls that have already happened, which just drives the price down further, and drives away foreign investors,’ he explained.
‘And the problem is that all the most influential organisations take official figures at face value. One of the best things the Spanish government could do right now is produce some reliable house price data, and fast,’ he added.