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Brexit uncertainty changes the shape of Spanish property market


Brexit|Latest FX News|Properties Abroad
Published: Thursday 27 October 2016
Property sales have increased overall in Spain by 8.4% since the same time in 2015, with a total figure of 134,521 property transfers registered, although some previously popular regions have experienced a drop in sales. The latest figures from the Instituto Nacional de Estadística in Spain show particular growth in property transfers in areas popular with British expats and holiday homeowners, such as Andalucía, the Balearic Islands and Canary Islands. Surprisingly, Murcia has experienced a year-on-year drop of -7.8 percent.

These statistics may reflect a post-referendum trend with UK buyers, who have traditionally made up the largest proportion of overseas property buyers in Spain. In 2015, Brits bought 15,810 properties in Spain and were the largest group of non-Spanish nationals to invest in Spanish property. Next were French property buyers, who made up 8.8% of foreign property sales in Spain; German buyers, who accounted for 7.5%; Belgian property buyers at 5.7%, and then Spanish homebuyers from Italy at 5.3%. Romanian buyers were also joining the Italians in sixth place, making up 5.3% and representing 59% growth since 2014. Figures for US buyers in Spain remained much the same, with numbers of Russian buyers declining.

Figures released for August 2016 showed that property resales in Spain increased by 25% in the months post-referendum. New home sales, in contrast, increased by 3%. The most popular areas were Madrid, Catalonia, Asturias, Almeria and the Balearic Islands.

Total property sales August 2016, compared to the same period in 2015
 

Region Total Property Transfers Annual Variation (%)
Andalucia 23275 15.5
Aragón 6173 19.9
Asturias 2881 -0.7
Balearic Islands 4035 17.9
Canary Islands 5062 8.5
Cantabria 1891 8.2
Castilla y León 10080 -3.4
Castilla – La Mancha 7078 -1.9
Catalonia 20664 16.5
Valencia 17582 11.5
Galicia 6026 -4.5
Madrid 13199 6.9
Murcia 3770 -7.8
Navarra 2217 2
La Rioja 1492 -36
Source: Instituto Nacional de Estadística

This is borne out by the latest figures released by independent valuation firm, Tinsa, which showed a growth in the average price of Spanish homes throughout September 2016 of 2.4% year on year and growth of 2.9% from January to September 2016. The most significant growth was seen in the Balearic and Canary Islands, with growth of 4.4% since the same time last year; and appreciation of 6% since January 2016. The ever popular Mediterranean Coast saw price increases of 4.3%.

“Significant growth in the sales of properties in the Balearic and Canary Islands could represent a move toward buyers in ever-popular holiday destinations in the wake of the Brexit decision, as buyers view them as a safer investment,” comments David Johnson, Director at currency and overseas property specialists, Halo Financial.
“However, declining property sales in regions such as Murcia, a long-time favourite of UK buyers, with its popular golfing resorts, could reflect a trend for British homeowners in Spain selling their properties in the wake of the Brexit decision and a sense of caution while the uncertainty around Brexit continues.”

“There is also the matter of currency, of course,” adds Johnson. “The Pound has weakened since the referendum and continues to struggle in the face of uncertainty and ongoing negative sentiment about Brexit. Those who are selling Spanish property to UK buyers will get more for their money, so people who may have been on the fence about selling have made the most of the best EUR-GBP rate for six years and taken action. At the same time, Euro buyers and those from countries that are enjoying a good rate against the Euro are also capitalising on the opportunities presented by the current situation.”

The regions that typically attract overseas buyers are doing well. German buyers are particularly interested in the areas of Mallorca, Valencia, Catalonia and Murcia, and seem to be leading the way for overseas buyers, according to a recent report from Spanish property agents, Iberia Real Estate. The survey showed that German tourists made up a large percentage of tourists in Spain this year, which saw an overall increase of 6% compared with 2015, and of the tourists surveyed, 2 in 10 were thinking about buying a second home in Spain.

There has also been a noticeable increase in buyers from China and Scandinavia. Research in July from property agents, Knight Frank, also highlighted the increase in interest shown by property buyers from Latin America, specifically in Madrid; buyers from the Middle East, who favour Marbella; and Swiss buyers on the Balearic Island of Ibiza – this also points towards an evolving demographic of overseas buyers in Spain.

With the Euribor at a record low of -0.057%, this means low fixed mortgage rates, which are likely to remain low for the next couple of years at least, and provide another welcome boost to property sales in Spain.

About Halo Financial

Halo Financial is a leading UK foreign exchange brokerage, offering a comprehensive range of services to individuals and businesses since its inception in 2005. The business prides itself on offering a flexible and personalised approach for each of its clients, simplifying the seemingly complex foreign exchange market to maximise savings in currency transactions and make money go further.

Halo Financial specialises in managing currency risk by offering hedging strategies and best execution for B2B and B2C clients with vertical expertise in numerous industry sectors such as international trade, financial, education, migration and overseas property.  Staffed by qualified technical analysts, the company is authorized by the Financial Conduct Authority and HM Revenue and Customs.

Halo Financial also received the Gold award of Best Supporting Service at the OPP awards, the Gold Award for Financial Support and Innovation from Re:Locate Magazine and has 5 out 5 star customer gold merchant status rating via independent review website, Feefo.com.
 



Infographic: Brexit Reshaping Spanish Property Market


Infographic showing Brexit uncertainty changes 
the shape of Spanish property market
 

 
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