Contrary to expectations, the asking prices listed at Spain’s biggest property portal have risen by 0.5% since last April, reveals Idealista.
I was one of those who expected the coronavirus pandemic to crunch house prices with economic distress and travel restrictions, especially on the Spanish coast.
I wasn’t the only one. A survey of reader opinions on the likely impact of the coronavirus pandemic on the Spanish second-home market I did back in March 2020 found that 57% expected second-home prices to fall ‘a lot’ (>10%), whilst 37% said ‘ a little’ (<10%), and 76% expected the virus to reduce foreign demand for a year or two.
But, according to Idealista, Spain’s biggest property portal, asking prices on the coast have actually risen since last April, by 0.5% to 1,751 €/m2, with the biggest increase in the Balearics, up 4.4%, followed by Malaga/Costa del Sol (+3.1%) and Alicante/Costa Blanca (+2.6%).
Not all coasts posted an increase in asking prices. There were declines led by Granada/Costa Tropical (-6.5%), Almeria and its costa (-5%), Las Palmas / Canaries (-4.6%), and Girona/Costa Brava (-1.6%).
I assume it is true that the asking prices in the Idealista database have risen as declared, but asking prices are not the same as sales prices, and in Spain there is no reliable source of data on the latter. So it is possible that sales prices are falling even as asking prices rise, though it wouldn’t make a lot of sense.
Agents on the Costa del Sol are reporting strong demand and sales activity, especially higher up the market, as I reported here last week.
And, if it is true that the pandemic is changing demand for housing in favour of areas with more space like the countryside and coast, at the expense of densely-populated cities, the Spanish coast could benefit from that trend.
Whether or not house prices are actually rising on the Spanish coast, it seems that expectations worldwide have been confounded by the pandemic. CNN Business reports that “in an unexpected twist, the pandemic has benefited house prices.”
Kate Everett-Allen, the head of international residential research at real estate consultancy Knight Frank told CNN that “this time last year we thought it was going to be 2008 all over again,” with a price collapse, bankruptcies, unemployment, and the forced sale of second-homes. “Actually, none of that happened.”