House prices on the Spanish coast have fallen significantly more than the national average, but prices in some areas are now stabilising thanks to foreign demand, argues the latest report on Spain’s coastal housing markets by Tinsa, an appraisal company.
The ‘Spanish Coast 2014’ report, just out, reveals that house prices on the coast have fallen 47.7 per cent peak-to-present, compared to a national average of 40 per cent down since 2007.
Coastal property prices are in the process of stabilising, though sales volumes are still low compared to normal market conditions, and the market is now heavily reliant on foreign demand, say Tinsa.
Coast-wise, the smallest annualised house price declines by province clocked up in the first quarter of this year were in Galicia’s La Coruña (-0.9%), Málaga (-1.1%), Mallorca (-3.4%), Almeria (-3.8%), Ibiza & Formentera (-3.8%).
The biggest falls were in Galicia’s Lugo province (-15.1%), Fuerteventura in the Canaries (-11.9%), Valencia province (-11.8%), Huelva / Costa de la Luz (-11.4%) and Castellón / Costa del Azahar (-11.2%).
One positive sign pointed out by Tinsa is the first sign of new construction on the coast after five years or more of crisis that has left the coast littered with the rustic hulks of half-built developments. On Alicante’s Costa Blanca, for example, planning approvals were up 57 per cent in 2013, and the trend is continuing in 2014.
Average sales times, however, are still longer than 12 months, though the time is compressing due to aggressive discounts by the banks dumping their stocks of repossessed homes.
Foreign buyers on the increase
Spaniards ares still the biggest buyers of holiday-homes on the coast despite the economic crisis (and 26 per cent unemployment), but foreign buyers are growing in importance, say Tinsa. Russians, and buyers from Eastern Europe, are now playing a leading role in upmarket segments of the Costa del Sol and Costa Brava.
In 2013 foreign buyers accounted for 35 per cent or more of all purchases in the provinces of Alicante (Costa Blanca), Girona (Costa Brava), the Balearics, Santa Cruz de Tenerife, and Malaga (Costa del Sol).
In the first quarter of 2014, foreign buyers were on the acquiring side of 51 per cent of transactions in Tarragona (Costa Dorada), 44 per cent in Santa Cruz de Tenerife, and 38 per cent in Malaga (Costa del Sol).
How many of the foreigners buying property in Spain are resident here, and how many are non-residents buying a second home? Tinsa cites Government figures according to which just 6 per cent of foreign buyers in Spain are non-resident. That is nonsense. The latest figures from the General Council of Notaries reveals that 47 per cent of foreign buyers are non-resident in Spain, and most estate agents in operating on the Spanish coast will tell you that 70 to 80 per cent of their foreign clients are non-residents buying holiday homes.
[link type=”link-dark” href=”http://www.tinsa.es/web/np-files/1/down/04_Extended_papers_especial_costas_espanolas_2014.pdf” target=”_blank”]Read the report in Spanish ‘Costa Española 2014’ (pdf)[/link]