Are we going to see a drop in Spanish property prices in 2021? If so, when will it happen? In which areas of Spain will property prices drop?
These questions are being asked by potential Spanish property purchasers and also discussed by property experts around the globe.
Without sounding too cynical, paying attention to who has published the articles you read will give you an inclination as to the validity and reliability of their predictions. There is certainly no decline in interest in Spanish property (partly due I imagine to the extra amount of time many people now have) but, as expected, actual sales have reduced in many parts of Spain. I see this as only due to the current ongoing pandemic, not due to a decrease in demand.
Brexit may have put a dampener on many British purchaser’s plans but, thanks to the cosmopolitan makeup of the Costa del Sol, demand from other countries continues to increase. The pandemic, however, is affecting everyone!
So, if neither Brexit nor Coronavirus is going to drastically bring down the price of your ideal property in Spain, what is?
Before I continue, take a minute to stop and think about your own property search.
Think about your ideal property.
Think about exactly what you are looking for.
What are your property “needs”?
What are your “like to haves”?
What gives a property the WOW factor for you?
As a purchaser, you are an individual. You are unique.
Believe it or not, vendors are pretty unique too. Each vendor has a reason or motivation for selling their property. Understanding their reason is what may lead you to achieve your ideal property at a better price.
No need for Brexit nor coronavirus!
For more on this, read more in our articles 7 Tips for Negotiating the Best Price when Buying Property in Spain and Making an Offer on Property in Spain: How Low Can You Go?
So, back to my reason for writing about Spanish Property Prices in 2021 …
In an article I read this week, published by pisos.com, it was interesting to hear some statements made by industry experts, with their predictions on the Spanish property market in 2021 and beyond:
“During the first half of 2021, the Spanish residential market will continue to experience the trend observed in recent quarters. It has been characterized, according to Jorge Laguna, business intelligence director of Colliers International Spain, by a significant reduction in purchase demand and slight adjustments in sales prices. Similarly, they point out that there will continue to be an increase in interest in homes with larger spaces, with outdoor areas and that can better adapt to new forms of remote work.”
“In the third quarter, the real estate recovery will begin within the residential market. This will be slow, but progressive, and will be conditioned to the evolution of the economy.
Colliers International Spain indicate that the price of second-hand housing could hit bottom between the second and third quarters of 2021. It is from that moment, Laguna bets, that the “slow but progressive” recovery of the homeland residential sector would begin. In fact, this expert predicts that by 2023 the price and activity levels reached in 2019 could recover.”
Iñaki Unsain, president of Aepsi, “…the total fall in prices due to the impact of Covid-19 will not reach 10%“.
“Anna Puigdevall, treasurer of Fiabci Spain, considers that the value of new homes will not drop “much”, since the supply of this type of property continues to be lower than the demand.”
The economic crisis that has resulted from the coronavirus will accelerate the trend of access to housing through rent. This boom responds, in the opinion of Viçent Hernández Reche, CEO of Tecnotramit and president of the Association of Real Estate Agents of Catalonia (AIC), to the cultural habits of society, which are increasingly directed towards a flexible residence model, which facilitate the availability of liquidity, geographical mobility for work reasons and, especially, the limitation of access to credit for the purchase of a home. “It is a new generation that does not have the necessary resources to access property ownership”, he emphasizes.
I have read predictions like those made in the statements quoted above from various different sources. The consensus is that yes prices may come down in some areas but it is not a dead cert. Price reductions are not going to be as drastic as some purchasers have been led to believe. Unless your purchase is purely an investment, waiting too long may mean you miss out on what could be your ideal Spanish property, at the best price you can acquire it. Particularly if you are looking for a property designed for outdoor living.
So, what have we experienced with property prices in Malaga and the Costa del Sol?
Despite the continuing lockdown restrictions here in Spain, we have still been assisting our purchasers with their property searches. Despite the plethora of virtual visits and 360 tours being offered by many agents, our purchasers are eagerly awaiting the day when they can fly over and carry out their property visits, with us, in person.
Unless you are 100% certain of the location you desire or your purchase is solely an investment, we do not advise purchasing from virtual visits. You need to get a genuine “feel” for a property, particularly if it is to become your home.
Purchasers who are already residing in southern Spain and are currently looking for a property are finding that the majority of vendors are not prepared to accept silly offers on their properties. Many vendors are opting to rent out their properties until the market picks up again, which they know it will. It always does in this part of Spain. As we have said before, understand your needs, be certain of your budget and when you find your ideal property, be clear about how much you are prepared to pay for it.
Whether you are looking for a holiday home or a permanent home in southern Spain, let us know what you are looking for and when the time is right, we will help you find it!
If you are from the United Kingdom, please ensure you are fully aware of the new visa requirements before investing in Spanish property. We will be happy to guide you on all these decisions.