Joanna Styles
As the well-known tourist slogan says, “Spain is different”, and that applies to features of its property market as well. Read on to discover three things about the Spanish property market that will help you navigate its waters.
Spain has been a perennial favourite with foreign buyers since the early 1960s but in 2022, this love affair with Spanish real estate went up a notch. International buyers flocked to buy up homes, and in some areas such as the Costa del Sol, their market share reached levels not seen for several years. But as is the case in every country, the Spanish property market has its own characteristics and quirks, some of which may sound familiar while others are completely alien.
To help you navigate it, we’ve put together a trio of things worth bearing in mind when looking at the Spanish property market.
1. Official price figures are hard to come by
Unlike countries such as the US, whose property statistics couldn’t be more transparent, Spain makes it difficult to obtain official price figures. The Ministry of Housing publishes valuations only in its housing data, much in the same vein as the country’s top valuation companies such as Tinsa and Gesvalt. While these figures are usually reasonably accurate, they are still only someone’s estimate of what a property is worth, not a market price.
Notaries and Registrars also publish statistics based on selling prices declared in title deeds. This data gives you a good idea of prices generally, but they are only averages for a city, province or region. In Spain, it’s almost impossible to track the history of a property’s selling prices unless you have access to the title deeds for each transaction.
House Market Data Hub
Spanish Property Insight’s Data Hub brings together all the public Spanish housing market-data in one place with useful interactive charts to help you makes sense of it. This Data Hub is premium content for SPI subscribers but you can also buy a day pass.
2. The underlying trend is always up
In this respect, Spain is not different. All property markets run in cycles and the Spanish one is no exception. Like many markets worldwide, Spanish real estate has had a rollercoaster ride since 2000. In the last 23 years, it has had time to soar to its highest ever in mid-2007 before plummeting in 2015 and then making its way up again. According to Tinsa, prices are currently 20.7% below their 2007 peak.
However, regardless of each property cycle, the underlying trend is property prices is always up. The graphic below, compiled with data from the OECD and The Economist, clearly illustrates the upward trajectory. For example, property prices now are 54% higher than those in 2020 and 195% higher than in 1985.
3. Sellers tend to aim high
We all love our homes and tend to overlook their faults. Or maybe we no longer notice them. As a result, sellers often believe their property is worth more than its market value. This tendency applies universally.
However, from what estate agents have told me over the years and from what I’ve seen for myself, Spanish sellers tend to be especially blind to the true worth of their homes. More often than not, they name a price that’s higher than a valuation or others on the market. Even if the estate agent tells them it’s overpriced.
What does that mean for you, the buyer? If you’re interested in buying a property with an obviously inflated price, be prepared for tough negotiations. By all means, make an offer, ideally at market value, but don’t expect the seller to jump on board.
You could find yourself in a waiting game while the seller comes to realise that they’ve overpriced. Or finds they need to sell and as a result, have no option but to accept your offer.
Purchase Your Guide to Buying Property in Spain here.
