Pressures on Spanish Housing
Spain does not have enough accommodation for its own population nor to meet the high demand created by the boom in ‘residential tourism’; the result of this will be to make good property in Spain a valuable investment.
Spain may well be one of the best places in the world for a European to live; it has the sun, a rich economy, a wonderful and welcoming host population and all of the benefits of being part of Europe. Every year tens of thousands of Europeans leave their home countries and come to Spain to live, work and/or retire. Online working is now a reality and we see lots of new residents here earning a living in their own country from fibre optic connected Spanish homes. As the largest and richest generation ever (the baby boomers) retire, many have no wish to stay in the cold north. Additionally 400 million people in the Americas speak Spanish as their first language, many aspire to live in their ‘ancestral home’ and many succeed. The Spanish birth rate is low, and the net Spanish population decreases every year, but there are more than enough new arrivals for an increasing population.
The Spanish economy is back in full flight, confidence is high, banks have money to lend and are offering a range of financial products to entice a reluctant (and after that last crisis, cynical) market with offers that are hard to refuse. The recently published Spanish Mortgage Association (AHE) ‘Quarterly Statistical Bulletin‘ describes a buyers market of low interest rates designed to meet clients need for greater security from rate rises. In the days of high interest rates, mortgages paid for the running of a large banking complex, now these are trimmed down, to reflect the low interest rates charged to home buyers. In the last year low rates of less than 2% were given on 12,799 new mortgages (11% more than the year before) of those 64.6% were lent at a fixed rate. The Spanish Mortgage Association has described how greater access to financing for those with income and a good record is bringing house prices up.
All of this creates pressure to build more homes to accommodate the increasing need for housing of the Spanish and incoming populations. The Spanish Ministry of Development indicates growth of just 4.4% in the last nine years from 24.5 million homes in 2008 to 25.6 million in 2017 just a slight year on year increase. The number of homes in Spain for the whole population is in short supply with an increasing demand. The future promises people living longer and more people realising the advantages of living in Spain to make more demand. There are no guarantees that prices will not go down again but history shows that they come back up higher than before. For those who select a good Spanish property investment the long term will always have an upside.
If you want to know more about the Spanish property market, My Lawyer in Spain have significant expertise in every aspect of Spanish property and can give valuable information about how to get the very best that Spain has to offer. We offer a free first 30 minute consultation.