Spanish property: the story of 2014

The story of 2014 has been supremely encouraging for Spain’s property market

As the last few weeks of 2014 draw upon us, it is pretty clear that this year has proven quite a pivotal one for the Spanish property market.

Whereas 2013 was characterised by the promise of economic recovery, 2014 has been decidedly bold in comparison. Property prices have stabilised and even begun to rise in some regions, while the number of buyers – both foreign and domestic – has grown steadily every month…

It hasn’t been a spectacular turnaround, and that’s the point – analysts and experts have been impressed by Spain’s steady, consistent performance.  Few things are more encouraging than a sustainable recovery.

Economic growth, which is so imperative to the state of the property market, has moved slowly through the gears as the months have ticked by. In January, news came through that Spain’s household wealth was finally returning to normal levels, rising 20.8 per cent in the space of a year and prompting Spain’s Economy Minister Luis de Guindos to upgrade the country’s recovery forecast to “more than one per cent” in 2014.

A rising confidence
It seems strange now, looking back, at how much relief these good news stories generated at the beginning of the year. In February, Spain’s property market took centre stage with the news that sales in the Costa del Sol were up for the first time in seven years.

February brought news that Spanish property sales had risen for the first time in seven years

Analyst data revealed a 5.3 per cent increase in the space of a year, with more than 18,000 transactions recorded in Málaga province in 2013. The arrival of March – which is usually when the Costa del Sol begins to warm up nicely – heralded the onset of Spain’s own ‘Property Spring’. Billionaire real estate tycoons George Soros and John Paulson ploughed more than $250 million into a real estate investment trust fund in Madrid – a decision that heaped further credence on to the notion that confidence was flooding back to the Spanish property market.

By April, it was time for the Brits to shine. Reports that month revealed that British homebuyers and holidaymakers had helped push flight bookings and property enquiries on the Costa del Sol to a nine-year high. Sales of property to foreign buyers leapt 16 per cent in 2013, with figures released in April showing that Brits were once again the largest single group of investors.

As summer arrived, Brits’ passion for Spanish property also heated up, too. May brought news that a combination of the strong sterling and the affordability of homes on the Costa del Sol was attracting British retirees in record numbers, while June revealed that foreign investors had snapped up 27 per cent of all properties bought in the first four months of the year.

SOLD! 27% of all homes sold in Spain in the first four months of the year went to foreign buyers

July and August – traditionally the busiest time on the Costa del Sol – further confirmed just how well the Spanish property market, and economy, had turned a corner in 2014. As the pound continued to soar, more and more British buyers had their head turned by the opportunities of the Spanish property market, with August bringing news that mortgage approvals in June rose by 19 per cent when compared to 2013 – the fastest rise in eight years. The trend, by now, was confirmed: 2014 was on course to be the best year for Spanish property since 2008.

Tide has truly turned
By September, even the Daily Mail had begun to notice. The UK newspaper published a glowing report on how Spain’s previous woes – an overheated property market, poor employment prospects and a failing economy – had all but been nursed back to health. It was great to see, and a real shot-in-the-arm for the hardworking professionals in Spain that had quietly engineered this turnaround (yes, VIVA included!).

The slide into autumn saw the pace of good news stories quicken. Spain’s glut of unsold homes – stacked up during the difficult years between 2008-2010 – began to subside, with foreign buyers leading the charge. Encouragingly, too, came the news that domestic demand was also picking up, buoyed by economists suggesting that Spain’s GDP growth would top 1.3 per cent this year – better than France, Italy and – perhaps – Germany.

November taught us that the British love affair with Spanish property was well and truly in full swing, with statistics revealing that sales to British buyers had increased 25 per cent when compared to 2013 – the lure of top-quality property at affordable prices proving exceptionally strong.

The steady mortgage sector spells great news for Spanish property moving forward

By December, mortgage lending had increased for the fourth month in a row, creating the perfect conditions for the Spanish property market to slingshot into 2015 cruising along in the fast lane.

So what will next year hold? It is usually difficult to make confident predictions, but if 2014 saw Spain’s recovering economy thrust out a helping hand to the property sector, next year will see Spanish real estate play a leading role in helping the economy strengthen even further. This is an encouraging sign of strength, stability and confidence that was a mere speck on the horizon this time last year.

Twelve months is a long time, but 2014 really couldn’t have gone much better for Spain’s property market. The only way to improve it next year? Well, why not play your part and join the thousands of buyers sure to sign on the dotted line in 2015 and make that dream of a Spanish home a reality? You won’t regret it!