2014 has seen lots of positive news surrounding Spanish property with improvements in Spain’s general economic outlook, increasing sales to foreigners and signs that prices may now be at the bottom and already starting to rise in certain locations. This has led to a mood of optimism in the Spanish real estate sector with Solvia, the estate agency of Banco Sabadell, going as far as to raise the prices on 450 of its properties and its likely other banks will follow.
Here we list 12 factors why it might be the right time to buy in Spain:
1. Attractive prices: Prices have dropped around 40% on average and in some areas up to 70%.. The low prices decrease the risk when buying a property as potential downside is low to non-existent in most cases.
2. Choice: Oversupply has been one of the main factors forcing down property prices in Spain but it does have an advantage in that it provides a potential buyer with ample choice when choosing a property, with homes of all types available in all locations.
3. Positive economic data: Many economists are now pointing to signs that Spain’s economy is on the road to recovery with the Spanish stock market making impressive gains, unemployment dropping and government tax revenue increasing. This eases concerns of instability and insecurity.
4. Buyers’ market: Buyers are in a strong position in today’s market and can use this to bargain for lower prices although signs of prices having bottomed out could mean that this will not be the case for much longer.
5. Banks lending again: It is becoming easier to obtain a mortgage in Spain as banks regain their willingness to lend to consumers. High interest rates have been one of the factors driving customers away from mortgages over the past few years but new deals being advertised by banks include much more attractive rates of interest.
6. Rental yields: Annual rental yields are currently at an average of 4.7% and are rising. Many investors are starting to look at buy-to-let as a better investment than other financial products.
7. Bank bargains: Many banks have slashed prices aggressively to sell their real estate assets with discounts of up to 70% available. This situation will stay the same in the short term with banks still holding vast portfolios but will not last forever.
8. Cheaper to buy than rent: At the moment the average monthly payment of interest on mortgages is around ?250 which is less than the average cost per month of renting.
9. Entry of investment funds: This provides a sign of confidence returning to the Spanish real estate sector as investment funds have started buying up the country’s real estate assets and taking advantage of the current low prices. This is leading many individuals to plan on following these funds in securing a bargain property.
10. Benefits of ownership: Many people still see property ownership as preferable to renting. Buying a property is an investment in a saleable asset whereas rental is not and many see greater security in ownership for themselves and their family.
11. Prices already increasing in certain areas, especially prime locations such as Marbella, Puerto Banus, Mallorca and Ibiza.
12. Banks actually starting to increase the prices of their properties in the areas where there is huge demand
If you would like advice about how Spanish Hot Properties can help you take advantage of the property market in Spain then we would love to help you so please contact us directly.