What does 2020 hold for the Spanish property market?

Since the 2016 UK referendum on membership of the European Union, many UK investors have been holding back on overseas property investment. The Conservative party’s historic win in last week’s general election is likely to see significant movement on the Brexit front and more visibility going forward. As UK expats have been significant investors in Spanish property in years gone by, what does the release of the Brexit paralysis mean for Spanish property in 2020?

Ongoing recovery in Spanish property prices

Over the last two years there has been growth in Spanish real estate prices which many experts believe will continue into 2020. It is no secret that the construction sector together with the tourism industry, are the heart and soul of the Spanish economy. So, the ongoing recovery in these two sectors will assist Spanish economic growth in the short to medium term and attract more investors and tourists to the country.

Property developments brought back to life

In light of the 2008/9 economic downturn, as a consequence of the US mortgage crisis, we saw many property developments across Spain mothballed as developers experienced a financial crisis. The recent recovery in the property market has seen many of these property developments brought back to life. Renewed interest in these developments has created buoyant local economies with additional retail capacity coming online to satisfy local demand. In many areas this momentum will continue in 2020 and beyond.

Renewed interest in coastal developments

While the likes of Barcelona and Madrid will always remain a core element of the Spanish property market, many overseas investors are now looking towards coastal regions. For example, La Cala in the province of Malaga is attracting significant interest from property investors. Indeed, La Cala is where the TOWIE stars came to fame!! Olivia’s is a big draw for the Essex crowd! Check out this great value property in the region:-

Property Features

Climate: Air Conditioning
Condition: Good
Features: Lift, Near Transport, Paddle Tennis, Utility Room, Ensuite Bathroom, Marble Flooring, Double Glazing
Furniture: Not Furnished
Garden: Communal
Kitchen: Fully Fitted
Orientation: South, West
Parking: Underground
Pool: Communal
Security: Gated Complex, Entry Phone
Setting: Frontline Golf, Close To Golf, Close To Shops
View: Garden, Pool
Utilities: Electricity, Drinkable Water

More details: https://www.rightmove.co.uk/overseas-property/property-66639084.html

La Cala is where TOWIE stars came to fame!!

Situated on the Costa del Sol there is renewed interest right across this prominent tourist region which is likely to continue for some time to come. Even though UK expats have been significant investors in Spanish coastal properties, this type of property is now also the preferred choice of Scandinavians, French, Belgian and Dutch investors.

Brexit uncertainty lifting

It may sound bizarre but UK investors will have greater visibility now that the Conservative party has a working majority in the House of Commons. Gone is the Brexit paralysis of recent months replaced by a strong majority and one which will allow Boris Johnson to enter “real” negotiations with his EU counterparts. Markets and investors fear uncertainty more than anything else therefore the lifting of the short term Brexit uncertainty has been welcomed. Whatever type of challenging scenarios lay ahead there is now some visibility going forward and investors/market will react accordingly, discounting a worst-case scenario.

Spanish mortgage rates

Reflecting European Central Bank interest rates, Spanish mortgage rates are near record lows although there are some issues to consider. Outstanding debt in Spain has reached historic highs and many expect the Spanish government to implement policies in 2020 to address this issue. This may include additional taxes on Spanish banks which could be reflected in higher mortgage rates to cover any additional costs. Therefore, we could see investors looking to take advantage of current low mortgage rates in early 2020 – while they last.


The Spanish property market has been fairly strong over the last three years and many experts believe this will continue in the short to medium term. There is also a definite change in direction away from leading markets such as Barcelona and Madrid back towards the Costa del Sol and other tourist regions. As the Brexit situation becomes clearer, in light of Boris Johnson’s healthy Parliamentary majority, sterling has strengthened on the exchange rates. This will encourage more UK expats to revisit the Spanish property market.

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