IT should be a good year for Spanish property.
There was already a strong demand when the Covid travel restrictions started to ease over the last few months.
This will only get stronger with demand coming from all Northern European countries, with America, the Middle East and even the Far East providing buyers.
Much of this is to do with the ‘Golden visa’ scheme, which is becoming increasingly popular and creating more demand for the higher end of the market.
The Spanish have also become strong buyers on the costas over the last year.
The main issue ahead is going to be a shortage of supply of all property types and in all price ranges in most areas.
It has meant seeing prices start to creep up already and this will accelerate if the supply shortage continues.
One good thing is the continuing growth in new build properties, which are getting higher than average prices.
That said, discounts are still possible and it is always worth asking, although there are far fewer distressed properties now than there were two years ago.
The key points
- Covid and the travel restrictions have continued to be a major influence on the market. There have been relaxations followed by tightening on an irregular basis, that has added to the general uncertainty and resultant caution of buyers and sellers. However, with vaccination levels high both in Spain and in the principal market sources, there is returning optimism and this year, we should reach a stage where we ‘just live with it’, as we do with seasonal flu
- The strengthening of demand has taken up much of the surplus of new properties built over recent years. While a concern, construction is still strong, and the key will be to get more resale properties out on the market. There have been increasing reports of shortage of supply, which is likely to push up prices
- The considerable increase in building material costs will lead to higher prices of new build properties and conversions, and therefore make resale properties more attractive to the price sensitive buyer
- There has been much talk of drought and plans for better use of water and the expansion of water storage are being seen throughout the country, as the long term changes of the Climate Crisis are beginning to be felt, and its reality accepted
Other key things to look out for
- Official Property Descriptions: A law that came into force in 2015 requiring all property titles to be identical to the Catastral and Nota simple. This law effectively requires a topographical survey of all properties for which there is a difference between the Catastral and Nota Simple. It is an obligation that the seller should have to comply with, and we are informed that more notaries are requesting it before agreeing sales. As organising the change can take many months, owners are advised to have the process carried out well before starting to market a property
- Possible new Rental Law on the horizon: In November 2021, a more restrictive law on renting and of greater benefit to occupiers was proposed. This means that regional governments can increase taxes; impose rent controls on prices and increase the difficulty of repossession due to non-payment or squatters. There are a number of flaws and complaints that means it will need much more work before going to vote. In Andalucia, the Junta has stated it will not bring in the law, meaning more foreign investment is likely, spurring job creation and wealth, but perhaps endangering the environment and climate change targets.
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