Property prices on the Spanish Costas after the Corona crisis: a forecast
1.How will house prices in Spain be affected?
The extent of the pandemic has taken most of us by surprise. However, we are now seeing a glimmer of hope in the newsreels. Some countries are looking towards relaxing their measures and after this current period of lockdown we expect that Spain will soon follow suit. So what can we expect from the Spanish real estate market when this is over and will house prices in Spain go up or down?
The property site Idealista suggests that in the short and medium-term there could be a drop in house prices in Spain from anything between 9% to 20%. However, the predictions are that the impact will not continue for as long as that following the recession of 2008.
It’s also a fact that even in the years after the financial crisis of 2008 not all real estate segments were affected in the decreasing prices tendence. The figures in percentages are global figures all over the country and are not applicable on privileged emplacements like there are residential areas and coastal areas. The fine properties with a good pricing and a good location won’t drop in value.
Of course there will probably be deals to make, but those deals will almost always occur on less-selling properties and/or bad locations, and of course on some bank seizures that are probably coming up.
However, it is also a proven fact, investing in real estate during uncertain times is a better alternative than trusting in some other investment options that can be more prone to fluctuation. Real estate was, is and will always be a a safe and performant investment.
Sublicasa follows the fluctuations in market prices on a daily basis and we offer you the guarantee to take advantage of every opportunity on the market, at any time.
2.A retrospective look
Throughout this pandemic, references have been made to the crash in 2008. There are, of course, many differences. However, the impact on the economy, we are pretty, sure will be significant in most countries and Spain is no exception. The months after we creep back into shared spaces will see people having to dig deep into their reserves financially. That, of course, is if they have them.
The Spanish government is keen to ensure that no one is left destitute as a result of the measures they have had to take. Numerous plans are in place to provide a minimum income for everyone and to enable businesses to stay afloat. This aside, however well these measures work we can expect to see a drop in confidence and some businesses will find it impossible to recover. As such, we can expect the construction industry to have a set back and house prices in Spain could fall because of this too. For those who are wanting to sell, this is not perhaps the best timing do it. Sellers will have to drop their asking price if the demand is decreased.
For sure we will be confronted with this phenomenon in the first months after the crisis.
As mentioned earlier, we must nevertheless take into account some factors that positively influence the value of real estate properties on the long-term basis:
- The figures in percentages are global figures all over the country and are not applicable on privileged emplacements like there are residential areas and coastal areas. The fine properties with a good pricing and a good location won’t drop in value.
- Of course, there will probably be deals to make, but those deals will almost always occur on less-selling properties and/or bad locations, and of course on some bank seizures that are probably coming up.
- However, it is also a proven fact, investing in real estate during uncertain times is a better alternative than trusting in some other investment options that can be more prone to fluctuation. Real estate was, is and will always be a a safe and performant investment.
3.A good time to buy
However, it’s a proven fact that the prices before the Corona crisis were already 30% cheaper than at their top in 2007, before the financial crisis. If the prices would decrease like forecasted, the first months once the Corona lockdown passed. The second half of 2020 could be an optimal timing for the purchase your Spanish dream.
It can also be a good time to change property in Spain. The price of your existing property may be down, if house prices in Spain have fallen, but at least you will be able to buy for a reduced amount too. Of course, this is dependent on offer and demand. This applies whether you are considering upsizing or downsizing.
If you are a potential investor, looking for something that will give you a return in the future, then buying a Spanish property while house prices are low should be on your list of possibilities. It is likely that there will be low interest rates for some time and anyone who does have money to invest should consider alternative means of investing it, purchasing a Spanish property could be a very good option.
This added to all the reasons already explained before in this document.
4.Our advice
At the moment we advise our customers to keep safe and at home, following the guidelines your country is giving you. However, there is no harm on being proactive and check the possible opportunities. Our customer care department, working safely at home, will be more than happy to answer to all your questions ,either online or by phone.
At some point this tragic and challenging period in our lives will be over.
There has always been sunshine after the rain. 😊Bovenkant formulier
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