Property in prime Spanish regions delivering returns, reports FT

Property in Barcelona, Valencia, Madrid, Málaga and most parts of the Costa del Sol is beginning to deliver returns to investors.

Homes in many of Spain’s more popular areas have begun to generate good returns for investors who gambled on Spanish property during the lean years, reports UK newspaper the Financial Times.

Barcelona, Madrid, Valencia and parts of the Costa del Sol are those Spanish regions where recovery has been most pronounced. Pent-up demand for affordable housing is now slowly being met as mortgage lenders have begun to loosen their belts and grease the wheels of the market…

What used to be one of the most trying markets in which to access credit – particularly during the recessions of 2009 and 2012 – is now possibly the most attractive real estate market in the EU.

“Prime Spain is recovering,” Spanish property expert Mark Stucklin told the Financial Times. “We’ve missed the very bottom of the market. It’s not such a red carpet for buyers any more. Supply is starting to tighten up and prices are rising.”

Stucklin observed that the recovery in Spain’s strongest regions has been notably steady, with caution the name of the game – and rightly so. “There’s a sense that unless we’re back to boom times it’s a failure,” he said. “But that’s not the case.”

The strength of the pound is serving to attract British buyers, who have comprised one fifth of all transactions with foreign buyers so far this year. “Property in Spain is attractive now, both in yield terms and for potential capital appreciation,” said former banker Dominic Parker, who is looking on the Costa del Sol for a sun and golf property. Parker expects returns of around eight per cent on whichever property he purchases.

Prices nationwide have risen 2.65% this year, according to the General Council of Notaries, and will continue to rise in 2016 and into 2017. Sales are also up, by around 21%, and this recovery is expected to accelerate next year.

Marc Pritchard, Taylor Wimpey de España Sales Director, told the Financial Times that tourism continues to be the main driver for many regions – especially the Costa del Sol. 

“Obviously with a higher number of visitors it has a knock-on effect,” Pritchard said. “It is helping us with sales figures we have not seen for a long time.”

With prices still low in many parts of the country, this upturn is expected to continue to attract foreign interest, which is increasing among Chinese and Middle Eastern buyers, recent data has showed.