Here I publish a selection of comments from respondents to my survey of opinions on the impact of the coronavirus crisis on the Spanish property market.
I ran a survey of opinions amongst my readers when the Coronavirus crisis first erupted, with 607 responses including people looking to buy, owners, people hoping to sell, professional investors, and professionals in the Spanish property business.
More than 600 responses is a very good result for a niche covering foreign interest in Spanish property. I think it gives us a reliable picture of foreign opinions on the Spanish property market, in particular British opinions, because my biggest group of readers come from the UK.
Unsurprisingly, many people think the Covid-19 crisis will be very bad news for the Spanish property market, though I was also surprised by how much buyer interest remains, so long as the price is right. Expect a wave of bargain-hunters once travel restrictions are eased, which could take months.
You can read my analysis of the results of the coronavirus and the Spanish property market survey part I and part II:
I should add that I expect opinions to change over time, depending on how the crisis plays out. If the economic crisis turns out to be more serious than expected, that will have an impact on potential demand and opinions. It’s still too early to tell, and perhaps I should run this survey again in a few months time, but this is a good starting point.
Of the 607 respondents, more than 150 left comments, some of them quite long and thoughtful, explaining their views on the market. I can’t use them all as that would go on too long, so here is a selection of comments broadly classified as more positive / seeing the opportunity or more negative / downbeat, though I can’t promise I’ve got the classification right in every case. Bear in mind that English is not the first language of some respondents. My thanks to everyone who responded and commented. It’s been an education.
More positive / upbeat about the future
|I have private family plans and I had already started the buying process|
|It is all depends how long it take to resolve the problem and if the treatment would be found for virus. If we have the treatment, then people would not afraid to fly and communicate. If the virus diy because of the quarantine, then people would be afraid to fly for sometime|
|I admire your weekly column – a breath of fresh air and realistic. It pains me to see what Spain and Barcelona in particular is going through but remain optimistic that something like normality will return before the end of the year…|
|Covid-19 targets the elderly and the survival rates are not very good.
This could trigger an increase of overseas buyers, as well as increase of available properties in Spain, after the dust has settled.
|It will depend a lot of how long this will take and whether it also results in project developers going bankrupt and potential buyers or sellers getting into financial problems. In the end, people have been going to Spain for many decades and they will continue doing so in the short, mid and long term. Demand for property will probably drop on the short term as people feel more insecure about their financial capabilities and/or are banned from traveling to Spain. I think it is an issue on the short term, but if you’re not looking to sell on the short term I wouldn’t panic.|
|This crisis will have a dramatic short term shock effect. Recovery will take a while, but as a mid term effect interest rates will remain low and people may be more aware of the fact that they have to enjoy life (and therefore buy a second home in Spain).|
|THIS TOO, WILL PASS.|
|By the time this ends the appetite for a home in the sun will remain strong but the economy will have taken such a hit during the crisis there won’t be much spare cash for buying property. Long term it will recover, the same driving forces remain & so does the bad weather in other countries and memories do fade. All depends on two things – cash flow after the crisis & climate change. Climate change is the big imponderable.|
|We were in Lanzarote in early February & seriously considered investing in a holiday apartment for our retirement. With the impact of the CVirus in Europe I can honestly say we are 100% relieved to be at home in County Kerry, Ireland & will give serious consideration to buy or not to buy. The Irish Health System has a lot to recommend it presently.|
|Demand from foreign buyers I expect will take time to recover. However, local demand I expect to come back after an initial period of slump in prices. At same time the volumes will be low at these temporarily reduced prices, because attractive units will still be attractive and young people in work will want to secure a modern home. Jobs will come back after a period of rebuild. Jobs dictate the confidence in the housing market. This follows the pattern of shock.|
|The recession caused by this pandemic will be deep and recovery may not be as fast as the previous ones. Like all well run businesses, nothing has changed the fundamentals. If a company was good value over the last 5 years, it is still a good company despite the market panic and devaluation of it’s share price. Spain is a quality destination for many second home buyers. Once the emergency has passed, no matter when, it will remain a top attraction for foreign buyers.|
|We saw a downturn in British buyers prior to Brexit, Europeans were still buying. Prior to COVID 19 we had a number of enquiries for new builds and these prospective buyers have all said that they will still proceed. Time will tell…|
|Balearic Islands have a proven track record of price stability during previous crisis. I do not expect an overall price decrease, but individual adjustments on a lower scale.|
|The virus is not going to go away. Even if this lockdown works, it will re-emerge. Since it’s RNA based, mutations are likely, meaning we could well see different strains that might render vaccines less effective. Lockdowns and social distancing are a new fact of life.
Aspects of Spanish culture such as “dos besos”, crowded fiestas, carnivals, sharing food are going to diminish considerably. It’s no accident that the virus has spread so easily in Spain and Italy.
The economic downturn is going to be massive and this will see property prices decrease dramatically.
Estate agents are paralyzed during lockdown and many will go under.
There is also the demographic of expat property owners to consider, many of whom fall into the “High risk” category. As grim as it may be, this will mean more properties come onto the market adding to the supply side and putting further downward pressure on prices.
If summer sees a reduction in virus numbers as it does it with similar viruses, Spain may become more popular than before, because it will be seen as less risky. People will favour independent properties over properties with shared entrances and lifts.
Where would you rather be locked down or socially isolated? Sunny Spain or somewhere where the weather is shite and therefore the chance of getting infected increased.
When the Islamic terrorists flew planes into the twin towers in New York, I was sat in the sales room of what was the largest Spanish property sales company. After the first plane hit we set up a TV and watched in huddled horror as the second one hit. I remember the sales manager saying that it was “game over” for the business. 3 weeks later, we put more people on planes to buy property in Spain than ever before. Disasters make people reassess their lives and the “I might get run over by a bus tomorrow”, philosophy kicks in and people make decisions to do what they have dreamt of doing.
|Buyers and sellers need to remain positive. This situation is out of our control and it will affect us all. As a business owner of a local Estate Agents this is a time for being there for our clients to reassure them that all will go back to normal, whatever that may be!|
|It will be tough, but we have been here before and certainly the desire to own a home in Mallorca may be even stronger for our British clients.|
|Thankfully, we actually still have requests and interest in buying, but naturally both vendors and buyers are calling to ask what we think will happen. Your survey comes at a good point, thanks. I think people will still want to have a property abroad, or in our case in Mallorca, and to live and enjoy life! Maybe even more than before! But of course, travelling and health issues are still to be solved, as well as how this will affect people’s financial possibilities and power to invest. I think there will absolutely be good opportunities for bargains, when some have to sell, but over all I don’t think prices will drop more than 10%.|
|Hi Mark, I’m an autonomo property consultant based in Marbella. My clientele are primarily Scandinavians and Spanish nationals. My main focus is normally on sales, but this is now on hold. I’ve had several viewings cancelled and my focus will shift to the national market when this storm passes.
I think the travel market and state of airlines will have an impact on how quickly the foreigners react and resume interest.
I also have several holiday rental properties that we manage for the owners. Already, receiving cancellations due to the uncertainty. Bookings in July and August remain strong, but expect the mix of holidaymakers to change, with fewer foreigners coming.
I’m the eternal optimist and plan to give my website a makeover and take advantage of this time. Although viewings are frozen, I’m still in touch with the big developers who are still active behind the scenes!
Stay safe in Barcelona!
|This crisis is world wide…so effects on Spain will be mirrored everywhere. Hardship will be felt for a long time, but families will still want to go on holiday….eventually..so this market will recover fairly quickly. Prices though may have to drop to reflect the loss of jobs or income that people have experienced during this time.|
|Short term we will see a sharp negative impact on transactions, but over time the Costa USP (sunshine) will attract homebuyers back. We are living the new NORM. I believe this is a dress rehearsal to permanent partial home office culture. Longer term, there could be an upside, if people, particularly Spanish, choose to have their principal residences away from densely populated cities, and secondary residence where they came from. Family would remain where ever principal residence may be located, and income earner may travel as required to the “office ” wherever that may be. Obviously this will not apply to all, but possibly many.|
|I had a scheduled ‘arras’ signing this week, with go signs all around, (available cash and approved mortgage) however I am now taking the chance to renegotiate price at the risk of losing the deal entirely. Not too concerned though, will take my money elsewhere in a few months when sellers begin to look for liquidity and bargains begin popping up. That’s my take on the situation. Curious to hear other points of view.|
|Short term it will affect the property market but, like the price crash ten or so years ago, it will recover eventually..|
|As all countries are affected to the same extent it’s a different situation to the independence issue that solely affected the barcelona housing market I believe with time things will return to normal with small adjustments in price.|
|People will realize being locked down in a home with a garden in a great climate is better than more northerly countries which are more densely populated too.|
|This first 6 months and the rest of the year will be vey bad , but if they develop a vaccine, then I believe Spain will continue as before . Northern Europeans need Sun to function and so long as Spain maintains sensible pricing, then by nature of its location, the market will return .. But so much depends on the damage to the economy over the next 6 months in Spain and Northern Europe and how well the government support works .|
|The good and the bad of this: The bad; no country or industry will be spared (except grocery chains and some IT/Web), finance and cheap interest rates cannot pull us out, it will be up to governments to act big and fast (with mistakes). The good, we’re all going to go through this fast (as in the whole world). It will not be like the finance unwind, slow train wreck. If governments get it partially correct with easy salaries, then there will be a lot of pent up demand for vacations (get out of their houses for a few weeks but stay in Spain, etc). I think people will spend their money in the local economy a little more too. As for reclaiming the money, that will never happen, it will just be added to the pile.|
|The economy in Ibiza is at a standstill with the prospect of a missed summer season. It’s bad news for the locals. Property prices have been falling here for a year or more. They were over-inflated and the bubble has burst. Longer term I hope the mega-rich will move on to the next hot spot and leave the island to settle back into relative obscurity. I have owned property here since 2010.|
|The questions are pertinent but the future is very uncertain. Selling has always relied on there being one potential purchaser with a special interest: I believe he is still out there!|
|I am writing an article on impact of Coronavirus at present, of course being an estate agent I am more positive in my outlook than most 😁. However, I do believe, subject to this crisis not widening to a sovereign and fiscal global crisis (in which case everyone is screwed), that in stark contrast to the market pre 2008 financial meltdown the market now is in much better shape – less construction, less leveraging by banks, wealthier healthier clients etc. These comments relate to the market in the Costa del Sol only. Obviously macro economic factors will impact the market, many clients will suffer bad debts, lose their jobs or suffer financial failure from being over leveraged in their business or by being invested heavily in the stock market for example. However, these will be the few and not the majority so I do expect a blip rather than a bump in the road to recovery. One thing this epidemic has taught everyone is live your life now, enjoy your time on this planet as events can change, the Costa del sol is a great and convenient place to practice this important lesson.|
|All my property finder & relocation clients have initially said they plan to continue with their relocation/ purchases as soon as things return to normal. However, who knows when that will be.|
|We have not been told by our clients to cancel or postpone contracts so we are still working for completions in April for both selling and buying properties. Cash buyers are still showing interest in buying as they see an opportunity to get a better deal in the near future and they think this is only a break. Also, first time buyers for off-plan properties are willing to continue with their purchase contract. Furthermore, some developers are now offering to defer next installments to help them out to stay. However, due to current restrictions and global uncertainty the number of transactions will inevitably decline within the coming weeks and most likely will last for months.|
|We are inland, on the Altiplano de Granada, not on the coast. We’re having a peaceful , safe time of it so far ,and I think there are people who know this. We think/hope people will see this as a safe haven for the future, once the crisis is over. Hopefully this is realistic and not a fantasy.|
|Country houses will be in greater demand. Especially fairly isolated with land, but within reach of amenities and a good road. Town houses and flats less so.|
|Short term property prices will fall, longer term once the crisis is over, I think folks will make those decisions they had been putting off. Like moving to the sun and buying property, as they will have realised just how fragile we all are and how we need to do what we want to do and follow our dreams, as time passes quickly and who knows how long anyone has left on the planet. Personally I would sell my current property and move to something bigger which was a plan we have. Even if this meant taking less for the sale, as prices are always relative, so you need to look at the purchase cost as well as the amount realised on the sale by seeing the bigger picture. There could be some real bargains to be had with a little bit of courage! From a U.K. aspect, the only dampener on this is Brexit, no deal which looks very likely will hamper U.K. purchases no doubt. But I see other countries buyers increasing slowly for the reasons outlined above.|
|I live in Extremadura where the ‘foreign’ housing market is quite different from most other regions of Spain. We know it’s slow here, always has been, but I don’t think the current crisis will worsen the housing market in this region long term, as people who want to buy, and live here, do so for very different reasons to the majority.|
|As a property professional our company has come through the 2008 financial crises, Brexit and now Corona-virus is upon us. I firmly believe when this comes to an end that there will still be interest in our way of life in Valencia. This will take some time. Prices will come back and currently some transactions are temporarily on hold. It will be interesting to see how the banks react and i foresee a slowdown in new developments as the quantity of resales coming back on the market will increase, even more so in the main cities.|
|Many people will be affected by the slower economic situation arising from this international crisis. People will be financially affected and mostly will need time to recover. Although it will be business, I am unsure that it will be business as usual. However the crisis may create a sense of urgency for serious buyers and sellers to stop procrastinating. Time will tell.|
|My plans won’t change to buy or sell. We own one property and have plans to buy another as soon as we can|
|Think of the market, in any sector, as two individuals. These two people both happen to have an illness at the same time. An illness potent enough to curtail all their activities, including the property market, but not potent enough to permanently disable them. They recover. Is there any logical reason why the hiatus in their activities should have, of itself, eliminated their plan to buy/sell a property? I believe not. In fact, there’s a case to be made to say that there will be pent-up demand. The one element that might make a difference is loss of income reducing available funds. However, credit is cheap a.t.mo and their may be an element of ‘catch-up’ by lenders who have had a spell of little or no new biz.
As for prices, one the one hand there will be a peak of properties available once the market kicks off again. In the other, buyer who were forced to sit on their hands will be joined by those who are now prepared to go shopping.
|We have had to postpone all our closings but the buyers still want to proceed when possible.|
|I think we will have 60% of the buyers back to Spain in about 6 months or so, then it will be more and more coming back.|
|I think this will be over faster then everyone says.
And it will not leave only bad things.
Spain and other countries that had been damaged hard will rise up and be more prepared for things like this🇪🇸🙏🏽
|Patience, then it will be fine|
|I live in Sweden and have an apt. in Barcelona. My friends in Sweden who want to buy in Bcn, are rather optimistic and hope the prices will go down. My friends in Barcelona, who are actively searching for an apt. to buy, are very nervous about the bank loan – will Spanish banks be willing to loan the same amount as before corona? This is important to know in order to answer your question about price going down or not.|
|This is life changing to some, and moving to the sun could appeal to a lot of people after all this fear. Time for fun and relaxing|
|Rural properties less likely to be affected. Already low prices. More densely populated areas will look less desirable. Relaxation in taxation laws affecting UK citizens would encourage more buyers. Particularly inheritance tax.|
|I think there will be people desperate to get away once things settle down and initially preferring the rental market.|
|Spain is easily accessible by road and rail. It will remain an attractive destination, given time.|
|People will need to get their lives back together, their finances straight and start to feel good again. Then the second home market can start again. Probably 12 months minimum. Always the possibility of bargain hunters ready to buy if prices drop significantly.|
|Normal service will resume eventually and demand from the UK may even increase as people realise life is short. The problem is the value of Sterling. Maybe there will be less ‘tourists go home’ banners flying from balconies in Barcelona. Thanks for your regular insights of the market Mark|
|Brexit and the transition period is putting putting more pressure in my plans rather than the virus|
|Over the longer term it will rebound.|
|The virus will affect everyone but Spain has a wonderful climate and many other positives. It will always be popular with buyers once the world returns to normal.|
|An unwelcome headwind but not a terminal blow.|
|These kind of responses are good for a snapshot of immediate thinking, but of course the eventual reality, as it pans out, will probably prove 95% of respondents to be wrong. However, it is valuable to get a ‘current’ thinking view. I have been involved in selling property since the late 80’s which saw a boom at the start of the decade to be followed by a bust at its end, given mainly due to the crisis in negative equity in the UK. So then I saw almost the entire 90’s be a wasteland in terms of no price increases (but yes some people bought – and they were exclusively end users). Then I saw 2000- 2006 explode out of all proportion, followed then as you reported by the Perfect Storm as it hit with is multiple and contributory factors. All hope then of a recovery hit by the Credit Crisis, the Greek Crisis, Brexit, and a varied range of other effects along the way, be they: Exchange Rate, downright moronic Spanish Legislation, Taxation and Regulation, there were dramatic price falls, but in fact limited selling, due in large part to a transition to interest only mortgages when banks were faced with keys on their counters, nobody wanted or would pay the banks money over and above their sale price to get out of of their mortgage. Well, just a ton of stuff had an effect, as it will now going forward. Stuff is going to change. People will inevitably take more than 6 months to take stock, but there will be some who like post 9/11 will think life is too short and will act early. But we have to see what is going to happen to the world economy over the period, will it be V shaped in terms of the inevitable recession? Or will it be prolonged? So you have to think longer than 6 months for buyers to return in any kind of numbers. Then the effect will likely be the same as the 90’s buyers will come as end users. The quantity of same might then be affected by the approach of the Spanish Government – does it want foreign residents on its Costa’s? Will it be welcoming or taxing? Do they have a clue how much revenue they once brought into the country in the early 2000’s from foreign buyers? Probably not, as so much it seems was siphoned off by corrupt officials, developers, lawyers et al ALL THE WAY UP THE CHAIN. So what is their policy going to be? I think Podemos might be a fly in the foreign buyer ointment that could be a salve for the Spanish economy going forward. But look, enough, these comments are all wild conjecture for now, and the view is going to change back and forward, along with events. Could be that if China is (if you can believe their stats) coming out of its first wave and might stabalise, then this whole affair might be a ‘phew that was close / scary’ event some three months from now, and life returning to normal by the year end. So… who knows, but… I have seen stuff come and go over 30 years, often in business terms has felt like going to hell and back several times over, but this… this looks like it will beat it all.|
|I think that the [Catalan independence] ‘process’ had obviously had a massive impact on the market prior to the Covid 19 pandemic . The market here in Barcelona city centre was ridiculously over-cooked and a combination of political uncertainty / MENAS and the crime wave associated with them / Over Tourism had already taken their toll . For those of us that live and have family here , kids at school in central Barcelona – this could be an interesting time to buy (forgive me for making this comment during a very serious health crisis … but it’s a survey about property so my heart is pure !) .|
More negative / downbeat about the future
|Mix this with the brexit effect, a likely depression which could last years and you have your reply in my humble view|
|Property market was already struggling. I think Corona will together with the economic back lash hit prices hard.|
|It will be tough times for the ones that haven’t learned from 2008 ie property developers without buyers on the coasts. Some projects are set to be abandoned again. And, which is good news, some won’t start.|
|In times of crisis cash is king, therefore, you will see a lot of people selling their second home.|
|THIS IS ONLY THE TIP OF THE ICEBERG THERE WILL BE REINFECTIONS FOR 18 MONTHS TILL A VACCINE IS FOUND GOD HELP US ALL. LIFE AS WE KNOW IT WILL NEVER BE THE SAME AGAIN|
|We have been traveling around spain the last 4 winters in a camper always looking in areas where we may like to buy. Luckily we decided not to travel this winter as there is camper chaos, with sites closing and people being put out on the road with nowhere to go. The area that we chose to perhaps buy was Calamares and have been watching the market there. But alas this virus has put things into perspective as there is no where safer than home. At least here in Ireland we are in lockdown but I have a large garden and can potter around. If we were in Spain I would probably have a balcony and feel very restricted as the garden, promenade, beach is closed. So yes look at bargains but probably abandon the idea for good.|
|Will be a global recession which will last for several years after coronavirus is past. This will have a negative impact on property prices and demand|
|Global crises all assets will be devaluated sharply, it’s still the tip of iceberg only!|
|Corona, Brexit, generally inevitable weakening European economy and negatively affected demand and strong Euro are among factors dragging the property market into a sinkhole|
|Re “the crisis passing” – I believe the crisis will be in two parts, there will be the more shall we say active part of the crisis, when the media and public focus is on corona, then there will be the latter part which will be in the markets. I believe the economic hangover will be massive and prolonged.|
|I am an owner of a small hotel which I have just rented out for 5 years. From March this year without government support My tenant will be bankrupt|
|We had only just put our property on the market and had three viewings postponed so now we will just have to wait.|
|It is hard to say what will happen as for today as it will depend mostly of how long will it take to be able to go back to our activity. I my view it will be a long process in Spain as we depend a lot on the International clients and tourists. So we do not know how it will impact the international traffic. What we do know that the coronavirus and freezing all the economy will have a huge impact on everyone and it looks quite pessimistic in my view as it effects almost every business and it is a vicious circle. I think that the national market will probably be able to recover sooner, but the international market might take a while.|
|While I believe the slowdown in demand will be temporary, I expect it to last 5-10 years. My concern is due to the global depression that is coming.|
|As a holiday rental specialist, I want stress the total loss of business for Easter and spring|
|This and Brexit will def drag down the prices for 2 years.|
|Hi Mark. I hope you and your family are keeping well. Enquiries for residential technical inspections and valuations have dropped off a cliff to zero. Portfolios of technical due diligence inspections for commercial property including office, warehouse/logistical and retail by large international investment funds are largely on hold until further notice. Although construction projects are allowed to continue at the moment, all but essential have now been stopped in Italy, and we can assume that we are behind the curve. Regards, Martin|
|I have a real estate business in the Costa Brava. Even when the Government lifts the state of emergency, it will be a further 3 months before foreign investors will consider buying again. Vendors will know that they will need to reduce their sale prices to attract buyers for the rest of 2020, so for the savvy investor there will be opportunities.|
|There are a number of other factors than the crisis affecting the market. It is at the upper end of the current growth cycle, interest only mortgages, weakness of Sterling, fees and closing costs, boom in new build at inflated prices, too many resales seeking a buyer, likely world downturn. availability of cheap rentals.|
|In Spain specifically and at this time, a lot of the impact of Covid19 will depend on how the Government decides to help the economy: workers, little businesses and autonomos especially. After Covid I think the return to normal for real estate and other expensive purchases (cars, big holiday trips, big loans, etc) will take longer. The rest (shopping, leisure, gastronomy, culture,…) will go back to normal quicker, in about 6 months I think.|
|I don’t expect to find a buyer anytime soon or holiday rentals for flats. May look into long term lets (reluctantly). May reduce price but am under no pressure for a quick sale.|
|I think the market will be driven by the one that are in need. And because in this equation it is usually the sell side that is in need, for money, I think it is inevitable that prices will plummet in the near short to medium term. This considering that we had a nice streak of good years after the crisis as well. Not only we were peaking in 2019, but developments were becoming very popular again because prices became overextended. When the margin between construction and sale are becoming too big, the reversal is coming. And right on this timea worldwide pandemic hit and freezed the economy. I expect a minimum 25% haircut on all properties this year. Outliers around 50-75%.|
|Spain front line beach must be the best place in the world to be in lock down. Until the banks or developers sell off all the empty apartments at massive discount prices (and I mean massive discounts), the property market will take a decade or more to get to where it should be!|
|If I were a buyer now, it would be good. I would expect prices to fall and would wait fro the drop in price to be palpable. However, as an owner, I am hoping that the prices will pick up in the next 2 – 3 years.|
|I was considering a sell and buy, to a bigger apartment .(This was after bailing out of a new build option in YUK )!!
Selling up my Apto would result in a significant loss , on top of that ….the frightful add ons for Agents Legals etc… makes it a non starterWhichever way you turn , yer ass is behind ya !!
|My problem now is that the value of my investments have gone down and I have less money to buy if I can buy at all.|
|We were planning to sell our house in Ecija and buy near Orihuela. this year. Plans postponed , possibly permanently|
|I live in NE Malaga. Only houses at rock bottom prices have sold since the crisis. The virus crissis can only make things worse. We are happy with our current house but would like something smaller. So taking it off the market is not a problem,|
|I think that their will be many people whose finances have been severely affected and will have to be careful to even manage their daily existence. This applies to all levels of the working population, therefore less money to invest.|
|The government, aided by the poorly educated & monoglot Hacienda, have worked tirelessly to destroy the holiday rental market over the last 5+ years and the Chinese virus is clearly finishing the job for them. The message is already out there that you should not own a house AND be a tax resident – one or the other is fine – otherwise they have you, and your descendants, by the goolies. Result of this will be a truly massive collapse in rentals and, therefore, tax generated therefrom. And that’ll take house prices down with it. Great place to live – but, sadly, run by corrupt (but not very clever) people.|
|A crisis on the horizon unlike any other, where basically every business on the market is affected and almost frozen. Consequences not to underestimate, to keep it short…|
|It’s the closing down of business worldwide that will have the biggest and long lasting effect. Substantial increase in personal, corporate and especially country debt could make the economic effects worse than 2007. That’s what will hit prices. In society, 4+ weeks (I reckon in Spain it will be until 10th May, with the borders being closed for longer – especially to UK where they are weeks behind Spain in its effect and their attitude to it) of little personal impact and working/playing on the internet will change people.|
|I thought your “Headwinds” article back in December was spot on, as after 33 years in real estate on the Costa del Sol I could see all the familiar signs of a market downturn(again) i.e. over supply of new builds, unrealistic prices and less buyers about. Our sales for 2019 were less in terms of numbers over 2018 but about the same in terms of revenue, the feeling was we´d peaked.In my experience property here on the Costa del Sol goes in approximately 7 year cycles and working from 2013, I was telling my vendors it was now time to get serious about selling, as usual no one was listening, then coronavirus comes along, making Brexit seem like the good old days.
The crucial factor is how quick normality returns in terms of the Northern European economies, lifting of travel restrictions, flights etc. Obviously the quicker the better, which would mean less damage to all the economies and the many clients that have already paid deposits on both the new builds and resales and would be less likely to cancel.
The short term impact will be a significant price correction in resale properties and probably we´ll see the first discounts on the new builds in the coming months. On the long term, the virus has highlighted the fragility of the world economies and so there will be a lot of purchasers who will have second thoughts and this will reduce demand for a property abroad.That´s the best case scenario.
The weather and the quality of life here in Spain has always been a big plus for potential purchasers, just how highly these factors are valued we’re about to find out.Stay safe and keep up the good work!
|I think this is going to be an even bigger shock to the market more than the crisis, it is going to slow demand because people confidence is going ro be knocked but more importantly the economic impact I believe is going to take a lot of liquidity out of the market , people had only just really started building up their reserves after the last market knock and this is again going to be a factor in the future of the market for us in Spain , as always we will have our buyers but the ones that had saved hard for the dream it has moved their goal posts again even wider for them , of course depending upon how long this COVID-19 situation lasts.
My fear is if it last too long confidence is really going to be shaken in terms of making those big purchases and never before have we seen a situation where people cannot get to the property that they have purchased and this is going to a factor in the future .
Also I believe flight costs are going to go up as less airlines are going to be flying and I think the days of really low cost flights could be gone , unless there are major subsidies put into place by the European governments , now the ability / desire for subsidies is going to depend on how hard they are hit having to support their own economies during this crisis.
The Spain / the whole overseas property market is going to see a tightening / contraction and we will see a number of players no longer being able to sustain the size of their current operations through the lower demand levels.
My planning already is looking at massively reducing out marketing costs and looking at new ways to move us forward using different mediums , I think the some of the portals has lost the plot in terms of their support of their clients and some have taken the right actions Kyro for example have stepped in with positive actions , Idealista are sitting on a high horse , they will lose clients because of this.
The industry has another mountain to climb but this time bigger than the last 2007 / 2008 correction, but again we will come out of it , how long that will take only time will tell.
Those that have not addressed all expenses today and taken out every single bit of cost are I am afraid not going to make it .John Goldacre
|If hyper inflation comes it might still be an option to invest in property|
|Real estate agencies will close in mass as in 2008. With the collapse of the money markets people’s finances have been drastically reduced so holiday properties will not be a priority.|
|We are mortgage brokers based in the Marbella area (The Finance Bureau) and new enquiries/referrals have almost completely dried up in the last 10 days.|
|Think that prices will drop up to 30 % in Costa del Sol area|
|Owners living outside Spain will not dare to come this summer and they want to sell their property in Spain as soon as possible if their home country is in Europe, America or Canada etc. Sell orders of Spanish property will soon start. Remember that the world stock markets has lost more than 30 percent since late february until now and has another 10 to 20 percent to go before calming down. Only spaniards are interested in buying property in Spain this year, I think. Cash will be the king now, not property.|
|This crisis will take lots of money out of people’s pockets due to reduced earnings, loss of jobs, companies folding and net assets reduction due to stock market declines. Combined with the further hit to sterling v the Euro, this will affect all potential second home purchasers, with the possible exception of the Swiss. As with all crises, the people who suffer are those who must sell assets in the trough, in order to meet commitments elsewhere. So, there will be some distress sales and price reductions. Trepidation due to travel & lack of social distancing on vacation will restrict second home purchases in the short term, but I believe the financial hit to many will be a bigger headwind. Spain will need to do something special to support the tourism and hospitality industry, like guaranteeing salaries to stop closures and bankruptcies or rent/debt support. A temporary reduction in the ridiculously high stamp duty (purchase) might also be needed.|
|I feel very sorry for the Sellers in Spain The market just on the brink of recovery then this problem. But it affects all of the world. I cannot sell my property in Thailand either!|
|The Spanish market like all others was over inflated and was heading for another bust before this happened. This will only make it worse. The UK market will dry up due to a mixture of this crisis and Brexit in general and will take a long time to recover. People have had a wake up call with the worldwide strandings and will want to be closer to home|
|As UK house prices are forecast to come down between 12-20% during the course of 2020, it can only be reflected to Spanish property market.
How is that going to impact on the developers taking deposits.
|I just managed to sell two town houses I bought in 2013. I put a 20K (10%) deposit on a house that needs a lot of work doing, but is in a nice location in Nerja. I am prepared to let it go and loose the 20k unless the owner reduces the sale price substantially.|
|I was thinking about selling before the Coronavirus but there is probably little chance now of putting my property on the market|
|Coronavirus combined with Brexit and the 90 day in 180 rule will now stop UK people buying holiday homes. They will rent for 90 days during the winter at best. Existing owners who do not have residencia will probably look to sell or rent out if they can, otherwise lots more properties will be empty for 6 months of the year or longer.|
|I fear that this pandemic will have a terrible effect on the Spanish economy with many job losses and many people will have to sell their properties either to cover mortgage and other debt or create capital to provide income. This will force values down. Many non Spanish owners and holiday renters will look to sell because they could not keep up either mortgage repayments or the upkeep due to loss of holiday rentals income. Recovery will not be for 2 to 3 years. I hope to be wrong.|
|We have put down the deposit, but everything has now come to a halt. Worried the property will be empty and uncared for during this period.|
|Isn’t just the effect on the Spanish Market but the knock on effect from other countries. The sellers market has also collapsed in the UK and however much we want to make a permanent move to Spain we need both markets to recover otherwise we won’t be in a position to buy|
|This is bad news for the Spanish property market, coming as it has on top of Brexit.
With demand already falling, it is going to be tough for prices to remain as they are.
I have noticed that the price of new builds in some areas have risen substantially and paying upwards of 300,000 euros is not sustainable in my opinion, for a chunk of reinforced concrete.
I will be unlikely to buy anything unless the prices come down substantially.
New builds worry me, as on past experience, when there is a downturn, you are likely to be left with an uncompleted development and also, on past experience, the Spanish Government are unlikely to help in any way if this happens.
I will be biding my time and if an opportunity arises I may well consider purchasing a property again, although, this time with my eyes completely open.
|This should make the Spanish government wake up and treat Overseas owners with more respect/less restrictions, I have a property in Portugal and if Spain does not change things we will concentrate on the Algarve.|
|The coronavirus epidemic is extremely challenging but it will pass. My personal view is that the far left Spanish government (if it lasts) will do far more damage to the property market than the coronavirus outbreak.
There will be a lot of demand for property in southern Europe when the crisis is over because people will be stir crazy and desperate for change but Spain must be more like Portugal and actively encourage inward investment.
|Mark, we were hoping to move to a larger apartment, but I see no realistic prospect of this happening anytime soon (this is why I have answered both buyer and seller questions by the way). It was already slow and we had two buyers pull out late last year -we may simply give up, stick with what we’ve got, and invest a bit of money in the place. This all relates to Port D’Andratx, Mallorca.|
|I was looking to retire in Spain, but have second thoughts seriously especially regarding the Spanish Government’s attitude towards non-citizens|
|Dear Mark, I have followed you for many many years as we have wanted to buy a permanent home in Mallorca where we lived and rented many years ago. We returned to the UK in 2002 and we started our plan to work hard and save every single penny we could to buy a property outright. Although Mallorca prices are extremely high we have never given up sight of trying to find somewhere and back in January we found a house in San Agustine, Mallorca where we previously lived, but we rented back then. Anyway, our offer was accepted, but 48 hours later the sale fell through as the chain fell down. Onwards we went and we had travel plans to fly back to Spain on the 17th March for 17 nights to continue looking for our permanent home. We have (had!) a cash budget of €450,000 (to include all buying costs) and we were due to look at a selection of homes both near the city of Malaga, right on the coast and also in the Costa Blanca north as well as a possible home in San Agustine, Mallorca. I can’t begin to tell you the deep shock that we feel what has happened to the world, and although we are still in sock and trying to remain focused on our dream of buying a home in Spain, we are not sure anymore if it’s a good idea. I believe that once this crisis shows signs of abating and slowing down, we will start to see the beginnings of further worry that I feel will include bitted in fighting between governments and world leaders and I think this will further slow down and frustrate any ambitions of seeing a sooner recovery and a return to confidence with investments. Although we are specifically looking at Spain here, lets remember that the fall out will be world wide and no country will escape from the financial impact that will hit hard in the pockets of those that had previously sought to invest, or in our case create a brand new life back in the country that we once called home many years ago. I’m not as informed as you are in your specialist area, but I want to tell you that myself and my partner have travelled extensively all across Spain from Cadaques to Cadiz travelling to many distant pueblos inland and we absolutely adore the country, but we have never been naïve to the corruption that Spain has a problem with, especially when it comes to property transactions and the unclear charges that buyers pay for to purchase a property, so we have also been talking further about this added concern on top of this crisis that has caused us to rethink our entire dream of ever owning a home in Spain. We both hope and pray that after 35 years of visiting Spain that it can recover and at the same time modernise it’s governmental behaviour because I sincerely worry that if the kingdom of Spain does not show a new uprising then I feel that it could be one of many countries around the globe that suffers further and falls into a depression and as the coming days, weeks and months unfold we will both be hoping that our dream remains in full tact and once things start to settle back down we will be there as planned to spend our hard earned money and live back in Spain for the rest of our lives. You do a great job and we have followed you for many years, recommending your weekly bulletins and updates to friends and family. Please keep the good work going. Thank you.|
|The economic and social consequences are unprecedented in peacetime and will have a profound impact on all economic activity.|
|I bought my Spanish apartment in 2015 for 65,000 euros at the advertised price , paid all taxes etc. Complied with all new money laundering regulations . Last year I was hit by a Re Valuation of 85,000 and had to pay the “extra ” tax , which I did as did not want a problem if and when I found a buyer.
This was blatant tax grab by the Spanish Government, quite disgusting.
I love Spain it’s people and culture however I will never invest in Spain again once and if I can sell my property.
I know a number of ex pats who feel the same.
Good luck Spain !
|Been on market for 5 years. House in Valencia region 45 kilometers inland. Recently reduced asking price substantially. Received 2 offers of intent the week before shut down. Both offers now withdrawn.|
|The Spanish Property market to overseas buyers will be over for next 12 months.|
|I think the exchange rate will have a big influence on whether we buy another property in Spain, together with the outcome of negotiations between UK & EU on health cover. We were looking at price range upto 350,000 euros. I think Spain along with UK and other countries will take a long time to recover from this.|
|It will feel like any other crisis as people will feel poorer because of the stock market crash,loss of job,income etc.hence the property market will suffer badly.Depending on how well covid19 can be controlled,it will be a few years before the property market recovers.The next bounce is likely to be a spectacular recovery,in say 10 years,because of all the money governments have been or will be pumping into the economy which will no doubt produce inflation.|
|There will be a drop-off of foreigners coming to Spain, not because of Covid 19 itself, but because of its awakening in people of the fragility of the planet, e.g. the suddenly-clean waters around Venice with dolphins appearing there. So northern Europeans will stay more at home, where their climate, in any case, is warming up.|
|The impact on Spanish house prices from Coronavirus on top of all the other factors such as Brexit, possible over supply of new build property at increased price and drop in foreign buyers I would imagine would force prices down|
|This will have a much greater impact than the downturn in 2008.|
|Have already seen property prices fall in Huelva province where we a looking to retire|
|I wonder if there might be a possibility, that the Spanish government will commandeer all foreign-owned properties, either as convalescent homes or “mini-hospitals”. I would obviously support that – whatever I could do as a holiday home owner. But would we receive any compensation for that? Currently, my property stands empty (small studio flat) and I am having to cover the running costs with no income now, as I have lost my job in the UK due to the Coronavirus crisis. I was expecting a long term tenant to arrive from the UK last week, to view the property but his flights got cancelled. I have a mortgage on the property and I contacted the Bank (Bankia) to inform them, I will not be able to pay the monthly payment due next week. I have had an email from them, stating they are looking at ways of trying to support their customers in this crisis and they will be in touch with me.|
|I think the market in Spain will crash completely. I’ve thought that for months, even before this ludicrous situation. When you see the number of new builds for sale and realise how long they’ve been on the market, you realise that there simply aren’t enough people with the inclination or money to buy them. So unless the builders have huge cash reserves to fall back on, I think another crash will now come sooner rather than later.|
|Not only the virus, but the politics of the country are a cause for concern, particularly in Barcelona.|
|Tenants unable to pay rent will have a big impact on foreign and native owners and their ability to pay mortgages.|
|The ‘suppression’ strategy will almost certainly result in a limited second round of infections. That will mean that over the next year or so buyers will find it difficult to view properties. Also the financial impact of this will be severe in affecting savings that could otherwise be applied to prospective purchases. The government (especially this one) will come down hard on anybody deemed ‘rich’ so I expect foreign home owners will have their taxes increased significantly making ownership even less attractive.|
|Already own a second home and very worried about the future. I am unable to travel to Spain to do basic maintenance, pool etc. I fear a double whammy on the property market with Coronavirus combining with Brexit, particularly when I lose my EHIC. I love Spain and the Spanish people and don’t want to lose it all.|
|Devastating times I was looking to spend more time in Spain|
|Was going to further invest but not any more|
|Instability caused by pandemic will ricochet for at least a decade, creating the worst global recession ever when uncontrollable inflation decimates the property market.Half a generation will have to pay for governments quantitative easing when they print money and try to spend their way out of this crisis in order to retain political control.|
|We expect residential properties in UK to fall by 20% in value, and for most other European Countries to suffer similar outcomes.|
|Looking at the slow recovery from the financial crisis in 2008 and similar slowness in the 90’s crisis I don’t think market prices will recover any sooner. Demand may grow for opportunity buyers but will not close operations sooner than 3-6 months after crisis to verify prices’ behaviour|
|I agree with your previous comment that the situation is likely to attract bottom feeders where owners have a compulsion to sell. This will likely put downward pressure on values as such transactions form the majority of market evidence. The process of valuation will be very difficult therefore during the crisis due to the lack of transactional evidence. There will be a strong reliance on professional judgement of valuers at this time although valuers can only reflect the market and cannot set the market.|
|Having just sold (at a substantial loss) my villa in Marbella prior to Christmas 2019, due to unbelievable demands from the Spanish tax authorities. Amounts running into hundreds of thousands of euro have been demanded yet I have been retired for over 13 years with no income apart from bank interest which is very little. My Spanish accountant is trying to recover the tax paid and does not know why or for what reason I am getting these demands. To date he has recovered around 40% but warns me that it could take years and several court appearances to recover the the balance. So I have a Spanish tax system that is trying it’s hardest to cripple me financially and driven me out of the country after 13 years. Now the Corona virus (2nd highest in Europe as I type) that will have a drag on the property market in the medium term. Given my age (73) I can see no reason or prospect to re-enter the Spanish property market again, (although I would like to), even if my accountant manages to get some sense out of the tax authorities.|
|I was planning on moving to Barcelona for the bulk of my retirement years but have put everything on hold even though I found the perfect property three weeks ago.|