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29 June, 2016
It has now been confirmed that Spain's residential property prices displayed average growth of almost 2% over the course of 2015. This modest yet noticeable increase in prices represents an important milestone for the recovering Spanish market, as it makes 2015 the first year in which prices have grown since before the financial crisis.
The last year in which Spanish residential prices showed average growth was 2007. In 2008, the market was especially hard-hit by the financial crisis and prices continued falling until some of the country's key areas began to show the first signs of recovery in late 2014. In this time, Spanish properties lost much of their value and consequently much of their appeal to international investors. Since the recovery began, however, it has since continued to strengthen and spread to a wider spectrum of regions. The market's first annual increase in nearly ten years has been taken as a significant milestone for the recovery and a strong positive indicator for the progress and future direction of the country's property prices.
The increase is good news for buyers and sellers alike. Buyers, in particular, are likely to be stimulated into greater levels of activity by price growth. Since the recovery started homebuyers and, especially, investors on an international scale have renewed their interest in buying Spanish houses. This interest which was diminished massively when prices were still on their downward spiral, but now the Spanish market seems to present an opportunity to pick up properties at bargain basement prices thanks to years of depreciation and then benefit from growth as the recovery proceeds. This situation will only be strengthened by 2015's landmark price increase, which serves as a strong indicator that properties purchased now will continue to accrue value on the back of the market's continuing recovery.
For sellers, meanwhile, aside from the fact that their properties are now worth more there is the fact that almost anything that stimulates buyer activity and demand is inherently good news. Those who are selling properties in regions where prices are growing will see more and more interest, and as a result will be able to sell properties more quickly and for values that are closer to their asking prices.
Spain has long been a popular market for international property investment. This is especially, but by no means exclusively, true for property investors based in Britain. Much like their compatriot holidaymakers, British property investors have a particular affinity for the attractions of Spain. International buyers, British or otherwise, represent one of the key groups which is increasingly resuming buying activity as the market for Spanish properties for sale continues to recover. As such, the recovery and associated demand growth is primarily – though again not exclusively – focussed in the areas that are of greatest interest to these investors. Key coastal regions and the major cities are therefore leading growth, particularly in tourist hotspots, with demand in such locations coming from institutional investors as well as from individual buyers.
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