Spain Spectacular Turn Around!
31st October 2014
Despite being one of the countries hardest hit by the financial crisis, Spain has made a spectacular turn-around, dazzling financial markets across Europe.
As former economic powerhouse Germany continues on a downward spiral, Spain has reduced unemployment (albeit modestly), seen GDP growth for the last few quarters and now the Spanish property market is bouncing from the bottom.
Spain has had a booming summer, seeing growth in property prices for the first time in more than 6 years and also enjoying a record-breaking year for its tourism sector. The huge increase in visitor numbers has positively impacted property investment, encouraging buyers to seek properties in the most popular coastal areas to capitalise on the yield growth potential in those markets.
In some regions, transaction volumes increased by almost 9% during June, compared with the same month of last year. There was also 19% growth in lending in June 2014 compared with June 2013 indicating improved confidence in Spain's economic recovery.
There has been a shift in investor sentiment since 2007: from speculative buying to make quick profits to investing for the long-haul, seeking returns from both capital growth and rental income.
With house prices at staggering discounts to 2007 levels, foreign investors are now able to get a lot more for their money in Spain, increasing rental yield expectations over the long-term. Before the crisis, Spain's property sector was a sellers' market with little room for price-negotiation, providing less flexibility for investors in terms of margins.
Marc Pritchard, sales and marketing director of Spanish home builders Taylor Wimpey España considers Spanish property to be one of the best value markets in Europe:
"Buyers from across the globe are taking an interest in what Spain can offer both as an investment choice and for the lifestyle benefits. We've found that our buyers include a mixture of those looking for an escape pad for long weekends, those chasing the winter sun and then summering in their country of origin and those looking to move full-time to Spain and settle here for the long term".