Here is a selection of opinions from high-profile experts in the Spanish property market that I’ve gleaned from the Spanish press in the last few days (my translations). As industry insiders they will have their expertise and unique insights into the market, but also their biases.
Savills Aguirre Newman, international real estate consultants
“As things stand today, investors shouldn’t have any reasons to abandon their pre-crisis investment plans,” says Anna Gener, CEO of the Savills Aguirre Newman Barcelona office, mainly talking about commercial property, and pointing out that the Spanish economy was in a relatively healthy position before the crisis struck. “The experience of previous crises has forced us to learn many things, and perhaps the most relevant and common is that once the worst of the crisis has passed, the recovery of the sector has always been very intense, indeed more so than forecast. With the volatility we are seeing in financial markets, and with interest rates so low, we believe that the positioning of the real estate sector as an investment opportunity should be strengthened after this period.”
CBRE, international real estate consultants
CBRE are more downbeat about the impact of the crisis on European real estate markets. However, they point to low interest rates and fiscal easing by many governments in response to the crisis. “The combination of the two should support many economies over a period that might otherwise be a much bigger blow to economic growth.”
Cushman & Wakefield, international real estate consultants
C&W warn that there is a high probability of a global recession with a negative feedback impact on property with a “special emphasis on the crisis in the hotel and retail sectors, which will see the biggest decline in business.” Though they don’t mention the impact of the pandemic on the holiday home sector, I doubt that C&W would have many reassuring words to say about rental potential and the outlook for capital values in the Spanish holiday-home market. They do, however, point out that the great financial crisis of 2008, not so long ago, means that governments and central banks “know how to act in the face of uncertainty, and are moving quickly to introduce measures to fight this economic situation.”
FIABCI, real estate industry federation
Ramón Riera, presidente de FIABCI Spain and Europe is convinced that “Coronavirus will pass, and the real estate market recovery will be rapid.” He points out that, compared to the Spanish property crash that started in 2008, when “nobody took any care of us real estate companies or SMEs,” this time “the situation is completely different, in which all we have suffered is a temporary halt in our activity.”
Lucas Fox, estate agents
Alexander Vaughan, founder of Barcelona-based Lucas Fox, says they “expect the impact on mid and high market segments to be short to mid term.” Looking further out, and considering the carnage in financial markets combined with unprecedented fall in interest rates, the people at Lucas Fox are “convinced that real estate will continue to be one of the most interesting assets for investors.”
Barnes International in Spain, estate agents
According to Thibault de Saint-Vincent, President of Barnes, “our activity has declined by 60%, but we are not completely paralysed, as there is still a lot we can do to continue offering solutions to our clients.” He argues that investors will look to armour plate their portfolios with prime property and gold.
Engel & Völkers Spain, Portugal & Andorra, estate agents
Juan-Galo Macià, CEO of E&V for Spain, Portugal & Andorra gives three scenarios. 1) Optimist with house prices down less than 10% and sales down 12%. 2) Neutral scenarios with prices down 11.5% and sales down 16% and 3) A pessimistic scenario with prices down 14% and sales down 20% for the region as a whole. In all scenarios things will be better in the second half of the year, the recovery will continue in 2021 with economic growth of 3.5% forecast, and the “residential market will return to an expansive phase.”
Colliers España, estate agents
Mikel Echavarren, CEO Colliers in Spain, is optimistic about the longer-term outlook, arguing that unprecedented levels of liquidity resulting from quantitative easing looking for safe investments will “increase the flow of global liquidity destined in a very relevant percentage to real estate investment in leased assets.” He forecasts that institutional investors will focus more than ever on real estate in the next decade as a relatively safe haven.
None of the experts quoted above are contemplating the kind of Spanish property market crunch that many buyers, owners, and sellers with an interest in the market have indicated as likely in my recent Coronavirus and the Spanish property market survey.
