“Foreign investment in real estate is accelerating and the upward pressure that is starting to been seen in the price of real estate assets like hotels, offices, and commercial centers will make itself felt on the quality residential market in the coming quarters,” says Bankinter.
The bank expects a notable recovery in some prime segments, though the overall recovery will start slow. According to Bankinter the “first improvements will not break the 4 per cent level in overall terms, but they will be significant in certain prime locations.” Barcelona and Madrid will be among the first markets to recover, the bank forecasts.
Whilst I think economies are recovering generally even for Spain and Club Med, and, property market is improving from a real low, IMO I really cannot see who will buy what Acuna says are 1.72 million homes still for sale. Many of these are now old, or lesser build quality than newer homes, and many of these need to be either knocked down or sold off dirt cheap with Government incentives just to remove this huge backlog.
Then there are many, many people in negative equity who either cannot reduce their prices, or just don’t list them. Any perceived property pick-up will no doubt bring a lot more of these on to the market for the very people katy talks of, so to sell at current rates just the existing stock could still take best part of 7 years let alone those waiting to come to market.
All this doesn’t take into account currency fluctuations, transaction costs remaining as they are at least, nor any other Euro problems as well as the latest worry of Eurozone deflation which could impact on sales.
One big problem for individuals who may be interested in buying something in Spain is the lack of badly needed legal reforms. There have been so many opportunities to create these since the crash and yet not much has been done.
As someone who is a homeowner in Spain and who loves Spain, I can’t recommend purchasing property in Spain without the disclaimer that it is often a gamble, that there are multiple layers of things that can go wrong at any point during the purchase process, that what is presented as fact one day is considered nonsense the next day and that seeking remedy in the judicial system is usually a waste of time.
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