The past sixteen months have been exceptional for property sales within Spain, especially in Javea & Moraira. This demand has stimulated price increases of 6.3% during the first quarter for 2016 year on year, according to Eurostat, the European Union’s Statistics Institute. This is the largest increase since the third quarter of 2007 when we had the Spanish property boom!
After six years of price reductions we have now had eight consecutive quarters of price increases. Towards the end of 2015, data shows property price increases of over 8.5%. 2016 has continued with price increases. On the face of it, it would seem that prices have certainly recovered well from the price reductions throughout the crisis years.
We must be mindful that it was the low prices that attracted the buyers, especially UK buyers when sterling was stronger. This encouraged confidence and stimulated further growth and consequently prices have been increasing but for how long this will continue no one knows. Demand for property looks like it will continue as investors scramble to find safer investments. This means there is still some upside to price increases before it levels out.
Since Brexit happened business has been surprisingly good with UK buyers, however, the reality of the uncertainties we face leaving the EU are just about kicking in as investor confidence in the UK remains low, hence the value of the pound has recently plummeted. Whilst there are many eurozone countries still buying property in Spain, the UK has historically made up a massive 15% of total foreign property purchases and at least 20% of the local Moraira/Javea market, which has attracted many British investors for the past 30 years. I expect some UK buyers will be deterred by all the uncertainties surrounding them but there will always be many Brits buying in Spain regardless. This was proven during the 2008 crisis.