Real Estate Market in Spain
In a nutshell
The construction industry in Spain contributes about 5.6% to the GDP, which can fluctuate in times of crisis or economic boom. With the economic recovery that Spain has experienced in the last two years, in 2016, 13% more homes were sold than in the previous period, with a total of 458,781 sales carried out. Given the job creation forecasts along with the economic growth and stability forecasts, the construction industry increased its work by 28.9%, with the approval of 64,038 new construction projects, specifically in cities such as Madrid, Barcelona, Alicante, Málaga, and Vizcaya. Likewise, for 2017 there is an increase of 24% in residential construction with the approval of 80,000 new projects.
All of these figures suggest that 2018 will be the first year to exceed 500,000 homes sold since the housing bubble burst in 2008, with an estimated sales growth of 10%. In regards to land value, 2016 saw an increase of 5.3% in year-over-year growth and 2017 began its first half with an increase of 1.2% on the average appraised value of homes.
Rental and Housing market insights
As for the rental market in Spain, while property ownership remains at around 78%, the past few years have seen an increased tenden-cy to rent. The average rent in Spain in the first quarter of 2017 closed at €7.92 per square meter, a 9.5% increase over the same period the previous year. It is predicted that the price of rent will con-tinue to rise in the coming years.
Foreign buyers represented 17.2% of the total buyers in 2016. In some provinces, such as Málaga, the purchase of homes by foreign-ers has declined, while in others, such as Castellón, Alicante, and Tenerife, foreign demand represents 39% of the local real estate market. As a result of Brexit, British buyers have reduced their de-mand in the Spanish real estate market, even though they continue to be the principal investors. This has given way to an increase in the presence of French, Italian, Belgian, and German buyers. As a whole, the buying and selling of homes by foreigners increased by 15% in the first quarter of 2017.