Foreign demand fuels spanish property price rises

Photo credi: Kevin Poh

Spain's market has come a long way in 2014. "Spain may offer one of the strongest recoveries within the Eurozone," PwC highlighted in an investment report in January. Since then, the country has done just that, with its improving economy out of recession, property prices beginning to climb and demand from buyers soaring.

Indeed, according to property portal Kyero, values have risen 7 per cent across the country, which is attributed to the rising number of foreign buyers from an increasingly diverse range of locations.

Homebuilder Taylor Wimpey España has observed increasing confidence in popular coastal areas and sporting hotspots.

Sales Manager Marc Pritchard observes: "Coastal areas and those offering top class sporting experiences such as the golf courses of the Costa del Sol have seen a definite upturn in terms of enquiries and sales during 2014. High quality developments with communal pools have attracted particular interest, with both property investors and second home owners keen to take advantage of Spanish bargains. There has been a fresh optimism in the market this year."

Kyero's Martin Dell agrees: "Confidence is up and the market is improving in an increasing number of locations. Foreign buyers have contributed hugely, accounting for a record proportion of overall sales, which has helped to stimulate the market and move it away from stagnation."
 
Figures from the General Council of Notaries back up Kyero's observations. During Q2 2014 foreign buyers accounted for 11.9 per cent more private housing acquisitions than during the same period a year earlier, representing more than one in five (20.4 per cent) of all purchases made during the period.
 
Both Kyero and Taylor Wimpey España are agreed that this sets Spain in good stead for a strong 2015.

"With this newly optimistic market, we expect to see domestic demand pick up during 2015," says Pritchard.

"With general economic improvements in Spain, as well as increasing employment and better access to credit, 2015 should see the Spanish domestic market given room to grow again," agrees Dell.

Nonetheless, overseas interest is the biggest drive force in the market.

"Price recovery in 2015 is going to be strongest in those areas that have been attracting foreign buyers during 2014," says Dell. "Our data has shown a clear correlation between asking prices and the areas in which foreign buyers are active. Investors and those picking up second homes are turning prices around."