The Spanish property market was always going to be impacted by Brexit, but the added pressure of the COVID-19 pandemic has made forecasting the situation even trickier.
Fortunately, Spanish Property Insight’s Mark Stücklin has carried out a survey of key players in the Spanish property market – buyers, sellers, owners and professionals – and analysed their responses.
Here’s Eco Vida Homes’ take on the report, as well as our own predictions for the Spanish property market post-pandemic…
What are people saying about the Spanish property market?
With so much misinformation flying around social media, it’s important to begin by noting that Spanish Property Insight (and Mark Stücklin himself) is a trustworthy source.
Mark is a well-respected, long-term commentator on the Spanish property market and is adept at analysing statistics.
The survey asked a series of questions about how people think the market will change as a result of the coronavirus, lockdown, and economic downturn. A number of responses stood out:
“The majority of agents and developers in the holiday homes market could go out of business…”
“Spanish second-home prices will fall – either a lot or a little…”
“Most people expect demand to recover fully in a few years…”
It’s also important to recognise that this particular survey is reporting on people’s opinions, which is made very clear by the author.
But they are the opinions of a reasonably large sample of people actively involved in the Spanish property market and worth at least taking into consideration.
Eco Vida Homes’ take on the Spanish property market
Our own experience of the Spanish property market at Eco Vida Homes is that it’s highly localised (like all property markets).
In the last economic crisis, asking prices for prime property in Marbella, either on the seafront or in gated communities like El Madroñal, La Zagaleta and other areas around Nueva Andalucia, didn’t fall. Activity dried up, valuations fell, but asking prices were very robust.
By and large, this is because private sellers didn’t need to sell and instead chose to wait for the market prices to catch up with their unchanged asking prices.
Property owned by commercial investors may have changed hands in remote offices and been labelled as debt restructuring.
And prime property is, well… prime. It’s all about location and if you want the best, you will probably have to pay for it regardless of financial crises and pandemics.
Distressed sellers, meaning those who had no choice but to sell, perhaps because of personal circumstances or a new job, are taken to the cleaners in a downturn.
In our experience, these bargains are typically mopped up by the local community, lawyers, or estate agents, who know about the opportunity before anyone else and have cash on hand to take action. It’s almost impossible for foreigners to parachute in, find a distressed seller and pick up an absolute bargain.
It may be possible for an expat to spend some time on the ground nurturing contacts to find a deal they can share with local players. It’s important to research and understand the local market thoroughly in order to be able to recognise the bargain for what it is. And this takes time.
The future of the Spanish property market as a result of COVID-19
Firstly, I would caution against believing anyone’s opinion – including ours – at the moment.
Again, the Spanish property market is highly localised. General market numbers for Spain are of interest, but they contribute only background information to your purchase decision, which should be taken according to local market conditions. This is the exciting part of buying property and property investment in Spain (and in general).
Currently, this situation doesn’t feel the same as the 2008 financial crisis and we can be confident of a surge in demand in most economic sectors as restrictions are lifted. It’s still far too early to say what might happen, but the 2008 crisis is probably not a playbook for what might happen with this one.
Of course, many people and industries will have struggled, so there will be a possible supply problem for home builders, which may affect the cost to build a house in Spain. But if there is demand, the market should correct itself quickly.
And those looking to build an eco-home in Spain can take advantage of Spanish solar energy to offset any turbulence in the pricing.
Special note from the author: My heart goes out to those who don’t have savings, whose income has disappeared and also, of course, to those who have lost friends and family members.
In an uncertain Spanish property market, inexperienced home builders need a trustworthy guide to help them through the endless bureaucracy and cultural nuances. Give Eco Vida Homes a call today and discover what we can do to make the process stress free!
Author: John Wolfendale
Bio: John is a founder of Eco Vida Homes and is passionate about bringing modern design and construction practices to Spain. He believes a home that is warm in winter and cool in summer is largely a matter of design and selective use of materials. He is British and a Chartered Surveyor with over 24 years experience living and working in Spain.
Author: Eco Vida Homes is a team of Architects, Technical Architects, Builders, an Engineer, and a Chartered Surveyor. We help people design and build a beautiful energy-efficient home, designed for Mediterranean living, in Marbella and Southern Spain. There are two things that make us stand out: a sharp focus on our clients’ needs and everything we build is comfortable and energy-efficient. It’s like Grand Designs, only without the drama.