We just closed exercise. The real estate market – in the absence of knowing the data for the last quarter – registered an increase in home purchase and sale transactions. From October 2015 to September 2016 444,276 real estate had been sold, 11.5% more than in the previous twelve months. This upward trend has to be valued modestly, as last year was marked by events and news whose consequences will manifest in 2017 … Yes, Brexit is one of the most important.
The situation makes it necessary for those people who are thinking about investing here to be aware of a number of factors to achieve profitability.
1.Return the ‘sanity’ to financial institutions. Credit and mortgage loans start to circulate again as long as the applicant demonstrates solvency and presents guarantees. This makes acquiring properties to sell when better times arrive is a good option. The circle is simple: banks grant mortgages, citizens are likely to become homeowners and those with attractive real estate assets can do business.
2. Significant improvement of the Spanish economy. The government of the nation has just advanced that it grew 3.3% in 2016, which means an acceleration of growth compared to 2015. By 2017 the movement is expected to continue upward, with an expected rise of 2.5 %. This has repercussions in many economic and social aspects that make the country even more attractive to enter into business and investment relations.
3. Yes there is residential stock … and a lot. What does that mean? That there are still interesting investment opportunities in the construction sector. It will take several years for the market to digest the ‘unsold’: Spain has 400,000 houses and flats with the ‘Sold’ sign. Of these, 100,000 are considered very difficult to sell. These are marketed at lower prices, so the profit margin may be higher. Where are they located? Fundamentally in the two Castillas, in La Mancha and Castile and Leon.
4. The cranes return to the ‘skyline’ of the cities. In the first 10 months of 2016, almost 30% more visas were authorized for new residential use than the previous year. We speak of a total of 53,111 units. Another obvious sign that this is going … and very well.
5. More than one outlet: sell or rent, that’s the question. When you think of buying real estate the first intentionality is usually to resell at the best price to obtain return on investment. However, the rules of the residential game are changing and the Spanish citizens are betting on rent more and more, which makes the lease a more than interesting exit to obtain high returns in these operations. 2016 said goodbye with a rise in rental prices of 6.7% and is already the option chosen by 21% of residents in the country. Forecasts for 2017 indicate year-on-year average increases of more than 10%. As expected, more demand, higher prices. The accounts are out for sure.
6. Regions potentially more profitable than others: vacation housing. In the boom of the lease is powerfully influencing the vitality that demonstrates the segment of houses and flats for tourism. Communities such as the Balearic and Canary Islands and coastal areas, such as Cadiz, the Costa del Sol, the Valencian coastline, among others – are life insurance, so to speak, as they attract potential renters virtually all year round, Rent temporarily.
7. Foreigners are still betting on a second residence in Spain. We will not go into how the Brexit may or may not affect the foreign intention of acquiring real estate – a note: an important part of home buyers in our country are British. What all seems to indicate is that many non-national buyers will continue to be identified: one in five real estate sales on Spanish land was signed by a foreigner. The coasts of Almeria, Alicante, Tenerife and Ibiza will be the most demanded.