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Thursday, January 15, 2015

What makes the Spanish property market different to the rest?

Spanish real estate market
Spanish rental and ownership trends differ from the greater European market

By Michael Liggan

When it comes to the Spanish property market, there are many factors which set it apart from those in other countries. The recent rate of growth in house prices across Spain, with official figures showing average annual growth is only a small part of the story.

Depending on the culture and demographic nature of the population, many countries will have very different attitudes to the domestic property market; resulting in wildly differing realities when it comes to the way in which people view their homes.
Here’s an overview of what makes the Spanish property market stand out in the current economic environment:

Renting versus ownership

Attitudes to renting versus ownership are one of the main things that separate the Spanish property market from some of its EU neighbours.

This in some part led to a national obsession with homeownership and the value of a property in Spain. This in turn resulted in Spain’s property market being quite separate from many other countries in the EU in the way that it works today.

However, recent years have seen the ratio of ownership and rentals changing once again as the fallout from the banking crisis limits access for first-time buyers in particular.

First timers

The current problems faced by first-time buyers in Spain are a result of the fallout from the banking crisis and also the overhang of the previous boom years in 2000 to 2004 where property prices peaked and then fell dramatically.

Recent moves to help people get a first foothold on the property ladder include the Spanish government's help-to-buy scheme. This has made properties available to those with only a small deposit, thus recognising the difference between earnings and the value of deposits needed.

However, the scheme has also led to criticism that it is increasing demand without encouraging builders to provide new homes and increase the supply needed, thereby giving potential for yet another round of rises in asking prices.

EU differences

The state of the Spanish property market stands in stark contrast to fellow EU members such as France or the UK, where spain's property prices are still a long way off their mid-2000s peaks but are showing some real signs of recovery in the long term.

It seems that that, once again, Spain homeowners and Spanish Property Investors will be talking about property prices for some months to come.

Although the average price of a property in Spain has been falling since the highs of the mid 2000’s, house prices in Spain are showing remarkable improvement, with some areas seeing an increase in housing value” Commented Michael Liggan from AltaVista Property Investment.

For both Spanish and overseas investors this is a great time to start building an international property portfolio, as house price decline is falling and some areas seeing a rise in property values it is inevitable that Spanish property will start to increase in the distant future making it the perfect potential investment to buy property while its value is 'low' as it will surely advance to a 'high' again like was seen ten years ago.

About the author: Michael Liggan has been working in the property market for over 30 years and commands a vast knowledge of international markets having visited over 30 countries worldwide. You can find out more by visiting his social profile twitter, facebook, linkedin and Google Plus.

 License:el Buho nÂș30, "El Parto Solo", CC BY-SA 2.0