PROPERTY prices in Spain’s tourist areas of the Costa Blanca and Costa del Sol could crash by over 20 per cent over the next year due to the pandemic.
The prediction comes in a real estate report from Barcelona University and consulting firm, Forcadell, which suggests a bounce back will start in 2022.
In contrast, big city areas like Barcelona and Madrid are projected to see a more modest price drop of around 12 to 13 per cent.
Report author, Professor Gonzalo Bernardos, said:
“The big cities always have a high demand for property, but prices will still fall, especially in poorer neighbourhoods.”
Bernardos added that he was very hopeful of Spain’s economy recovering next year, but that it would take until 2022 for property prices to resume climbing.
Rental prices will show an even more dramatic fall, as Professor Bernardos explained:
“The rental market always suffers more during any economic crisis and with more properties available due to a drop in tourism, prices are inevitably falling.”
However, the report says that the commercial property sector gives the greatest cause for concern.
It predicts that a third of all retail premises will close and rents will drop by 50 per cent.
“The commercial market has been destroyed as if a tsunami has engulfed it,” Gonzalo Bernardos commented.
He also expected many hotels to change hands, especially when sellers drop their demands for ‘very high prices’.