Spanish housing market hit in the face by gale-force Coronavirus headwind

spanish property market coronavirus impact

Gaudi’s Casa Mila (La Pedrera) in Barcelona today, without a single tourist thanks to the Coronavirus pandemic

The Coronavirus situation in Spain has become extremely serious with one of the fastest rising contagion rates in the world, prompting the Government to decreed a countrywide lockdown lasting 15 days from tomorrow. This is the beginning of a shock that I expect will paralyse the Spanish housing market, in particular the second home market, for at least the next three months.

According to an article in the New York Times this weekend, Spain has become the latest epicenter of Coronavirus after a faltering response. Personally, I think the USA is going to be the biggest problem before long, and that should worry us all.

A particular blunder by the Spanish government was allowing massive rallies like the International Women’s Day rally in Madrid last Sunday, March 8, at a time when the Coronavirus was raging in Italy, and there were already 589 confirmed cases in Spain. Partly as a result, contagions in Madrid exploded.

Just a week ago today, the left wing coalition partners of the Spanish government were bickering over who was more feminist, and posturing as leaders of the fight against the patriarchy. These are the kind of people who think that ‘ecofeminism’ is the answer to the world’s problems. Let’s see how they learn from contact with reality, if at all.

So the government has declared a ‘State of Alarm’ (or State of Alert, depending on translation) lasting fifteen days from tomorrow, with people expected to stay at home and self-isolate as the whole country gets put in a cordon sanitaire. All tourism and leisure businesses will close. I doubt this will be over in fifteen days. This is going to hammer the Spanish economy, which relies heavily on tourism and services. I worry the politics will get even uglier.

This is all terrible news for the Spanish housing market, especially the second-home market, which relies so heavily on tourism. I expect sales activity will be paralysed for three months at least, possibly longer. It looks like 2020 could be a write off.

This Coronavirus shock to the market will probably create an opportunity for buyers when the dust settles, but it’s obviously bad news for sellers. Anyone not in a hurry to sell should consider taking their property off the market until buyers and confidence come back. Any buyers in the market today will be bottom-fishers.

If you want to know what you can and can’t do in Spain under the State of Alarm there is a good summary at The Local here: Coronavirus: What you can and can’t do during Spain’s state of alert

Finally, I’ve seen some scenes of people panic buying loo roll and other basic items in the UK, but in my local supermarket in Barcelona, though very busy all day Friday, there was no sense of panic, and the staff did a heroic job of keep all the shelves stocked.

spain coronavirus supermarket shopping and hoarding

No shortage of loo roll or anything else despite heavy demand on the day of peak Coronavirus panic in Spain

 

 

About Mark Stücklin

Mark Stücklin is a Barcelona-based Spanish property market analyst, and author of the 'Spanish Property Doctor' column in the Sunday Times (2005 - 2008).

3 thoughts on “Spanish housing market hit in the face by gale-force Coronavirus headwind”

  1. markirlanda

    just paid a deposit and signed arras on a property outside Barcelona. It is to be our new home. Now deciding whether to walk away and lose the money or else continue and risk holding an asset that might drop 30-40% in the next few months ….

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