22 Feb, 2019 @ 13:05
7 mins read

What has 2019 got in store for Spain’s property market?

Sotogrande villa

Sotogrande villa

IT’S early February and I am beginning to see more half finished developments finished.

There are finally curtains in the windows, cars in the garage and generally more activity around the costas, all of which is reassuring.

There is no doubt the pie is getting bigger and while some agents and lenders might still be feeling the pinch it is because there is a lot of competition out there.

There are continuing reports of large, principally American funds, purchasing portfolios of mortgage debt and recovered property. And they will be pushing these on the market as soon as possible in order to get an immediate return for their investment.

Many are concentrating on creating rental portfolios, indicating that Spain has one of the lowest rental and social housing percentages in Europe.

But perhaps that can be countered by the ambition of most Spaniards to actually own their homes.

What is certain is that 2019 and 2020 are going to be interesting years, especially as the effects of Brexit are felt not just in the UK but throughout Europe.

The economies of the UK and EU are borderline in recession, as are a number of significant economies around the world.

Even China has seen a serious downtown, so we could be seeing a slowdown worldwide, which is bound to have a spin off on all countries, including Spain.

Considering that the second home market tends to be the one hit hardest if there is a downturn, as people concentrate on their first home and business, the market here could be more volatile over the next two years.

However, one should not forget the basic reasons for buying in Spain: As the sun has begun to shine again and the temperatures have risen, so this place becomes one of the world’s best places to live or take a holiday.

Analysis of Prices and Valuations


As always, there is a substantial range of prices around Spain. The highest valuation – €11,343 per m2 for an apartment in Marbella – was closely followed by a property in Cancelada, near Estepona at €10,900 per m2. Strangely, the lowest valuation was also in Estepona – €545 per m2 – nicely illustrating that average rates per sq m don’t relate to individual properties.



Analysis of asking prices, buying price and valuations since the start of our records in 2014 show a decrease in the differences, as follows:


  • The % difference between Asking Prices and actual Buying Prices –
  • 3rd Quarter 2014 -15.80%
  • 4th Quarter 2014 -11.41%
  • 1st Quarter 2015 -18.64%
  • 2nd Quarter 2015 -10.73%
  • 3rd Quarter 2015 – 8.72%
  • 4th Quarter 2015 – 9.38%
  • 1st Quarter 2016 – 11.68%
  • 2nd Quarter 2016 – 5.69%
  • 3rd Quarter 2016 – 11.97%
  • 4th Quarter 2016 – 13.48%
  • 1st Quarter 2017 – 6.94%
  • 2nd Quarter 2017 – 6.76%
  • 3rd Quarter 2017 – 12.01%
  • 4th Quarter 2017 – 9.56%
  • 1st Quarter 2018 – 7.05%
  • 2nd Quarter 2018 – 9.79%
  • 3rd Quarter 2018 – 5.37%
  • 4th Quarter 2018 – 7.38%


There has been a slight rise from the last quarter. But as the general range of up to, say, 10% discount for negotiation is to be expected, there should be few surprises with these averages.

Breakdown by region for 2019


The number of resale venders is increasing. Many are senior and perhaps they have accepted that they will sell even if the market is not the most buoyant because their circumstances require it.

There are indications that Spanish buyers are coming back, but principally at the lower end of the market.

There is some new build but when added to the existing resale properties, the demand will have to increase for them all to be occupied. There must be a slight danger of a bubble.

There are few Gibraltar buyers or sellers, who are waiting to see how Brexit will turn out. A recent sale of an apartment saw a drop of 7.4% between asking and actual sale price, which is standard now.

Casares and Manilva

The infrastructure of the area is getting better all the time and the development of the hospital in Estepona is another boost.

People see Sabinillas/Manilva as Estepona 10-12 years ago and consider that it will continue to grow.

Sabinillas has improved greatly in the last three years, with new developments and especially older shell developments being completed. However, the prices for new are all well above the current resale market and it will be interesting to see what happens in 2020, when most are predicted to be completed.

The resale market is strong and increasing. More are buying or renting to live and work in the area, perhaps from Gibraltar but also from home.

Buyers are Belgian, Nordic and German. There is good French interest, but principally in renting.

As for the Brits, both sellers and buyers are hesitant, waiting to see what happens with Brexit and exchange rates.


There is plenty of activity, but looking at stats for a number of offices along the coast, the last quarter has seen a 20% drop in enquiries from Swedish buyers.

Perhaps this is related to the drop in value of the kroner which has gone down more than


Another reason could be the great summer weather in northern Europe last year, which made many delay thoughts of a home in the sun. Perhaps they are considering it will be a permanent change due to global warming.

The sterling changes due to Brexit has seen some Brits rushing to sell and take a gamble on that particular outcome.

There is great interest in new build, with Nordic buyers looking for winter homes to rent out over the summer. That rent is important to help them cover costs, rather than as an investment return.

Generally optimistic for the future.

Marbella and Benahavis

In the higher value properties, both have had a good year and there is little sign of that stopping. There is good demand from local and international developers.

There is little additional hesitation by the Belgian and Scandinavian buyers but the Brits are undoubtedly playing the Brexit waiting game.

The urban planning situation in Marbella is improving, with the town hall making speedier decisions, which will assist development.

Mijas, Fuengirola and Benalmádena

Many Scandinavians buying for second homes and many Brits selling up.

There is little Spanish activity.

Costa del Sol East and ‘Inland Spain’.

The market has been better than last year with strong demand for new build.

Values are increasing as the market grows.

The British are hesitant, both regarding purchase and sale.

Strong buying from Nordic countries and Belgium.

As Spanish banks are beginning to lend more – though demanding a large % as deposit – there is an increase in interest from Spanish buyers.

Almería, Murcia and Alicante South

The yearly statistics of a Spanish ‘tasador’ show that the number of sales in the area have increased significantly, as have their valuations.

The first new development in Mojácar (Almería) for many years, has been started. The prices are high but in line with predictions for the completion date if values continue to rise.

Costa Blanca North

Agents report that after the encouraging market at the beginning of the year, 2018 did not see the improvement expected. Whilst the number of enquiries and viewings remain high, purchasers are not following through with offers.

Anecdotally, purchasers of all nationalities are concerned about the economic outlook (both as a result of Brexit and internationally) and are delaying making large financial commitments.

Conversely, the possibility of a no deal Brexit has ‘panicked’ some UK buyers into making fast purchases, in case the buying process becomes more complicated and the exchange rate falls significantly.

In these cases, desirable properties in good locations at the right price are receiving offers close to the asking price.

Agents are not expecting the market to improve in the first quarter of 2019, with continuing uncertainty over Brexit and international economists pessimistic over the prospects for the future.


Pre-Christmas business was good, but not spectacular. It’s seasonally quiet at the moment, but with more professional work than usual.

Brits are holding firm for now but Italians bought more property than Brits in 2018, with a lot of focus on Formentera and Ibiza. The Swedish seem to have fallen back too. Germans remain the principal purchasers.


All indices show that the national and regional market prices continue to rise. However, these grouped statistics are made up of many different individual purchases and estimates, portfolios, new property and resale, and so are of little assistance in gauging the current market value of a particular property. Our research for individual valuations still shows that some property values are reducing, whilst others are increasing significantly.


Off-plan values are still consistently above equivalent resale values. This will give purchasers cause for concern if resale market values have not caught up by the time they take possession of their new build. Indeed, with so much demand being taken up by new build, resales may be coming down in price to attract buyers.


Despite all this activity, and the concerns we have, based on reports of potential over development in many popular coastal areas, the Bank of Spain is stating that there are no signs of overvaluation creating a new property bubble in Spain.

Statistics are often stated as being lower than those of the peak before the bubble burst in 2007/8, but it should be remembered that those values were shown to be unrealistic.

The country should be using lower values as the measure of a stable, sustainable market.


British buyers continue to purchase more homes in Spain than any other foreign buyers. According to data from the Association of Registrars, 15% of properties bought by foreigners were purchased by Brits between the last quarter of 2017 and the first three quarters of 2018. But this is almost 6% below 2015 figures when Brits accounted for 21.34% of home purchases by non-Spaniards – perhaps an indication of the slide after the Brexit vote in 2016.

A number of markets are seeing increasing hesitation from British potential buyers related to Brexit – should they buy ahead of Brexit, wait to see what the terms are or even if it happens at all?

The reducing value of the pound to the euro is also making purchases more expensive. But it does encourage potential sellers to drop their prices as they will get the same in sterling as expected previously.

If, as expected, sterling drops further, it would be better for owners intending to buy in the UK to wait until that happens, thus having more sterling from their sale.

Residents staying and living off UK income have seen their buying power reduced by at least 25% over the last couple of years.

In addition, the potential for higher taxes as non-EU citizens, and movement restrictions, are persuading some UK residents who have not integrated to consider selling up and going ‘home’.


On non-economic matters, geologists have reported an interesting effect in some areas of the costas. Where there has been substantial new building of apartments, the weight of those combined with the extraction of water from the aquifers below has led to the steady lowering of the land. This has affected services and infrastructure, with pipes breaking and cracks opening for what was previously thought to be no apparent reason. When that is combined with the rising sea levels due to climate change, it means that beach-front properties need to be looked at more carefully for how they will change in the next 30, 20 or even 10 years.


2019? I am not holding my breath. Brexit or no-Brexit, it’s going to be bad in the short/mid-term for business, but once through the other side, I anticipate a big lift, whenever that will be!

Evidence of new developments are everywhere. Mostly upmarket new built apartments.  I don’t see many selling, though.

Campbell Ferguson (OP Columnist)

Campbell Ferguson, FRICS, working from Estepona since 2001 plus three years in Madrid, is at the heart of the Survey Spain Network, which links 15 RICS qualified chartered surveyors located all round Spain and the Canary and Balearic Islands. Tel: 34 952 923 520 Fax: 34 951 239 216 Email: info@surveyspain.com From UK Direct: 0870 800 3520

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