What implications will the Coronavirus have on the Spanish property market? It goes without saying that, once this is all over, there will be those that gain and those that lose. However, how long will this take? And will you be one of those who gain?
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First, we had Brexit and now the Coronavirus. 2020 sure is having a major impact on many people’s lives. Our thoughts are with everybody at this difficult time and we look forward to helping you with your plans as soon as it is safe to do so.
Buying property in Spain may seem like a crazy subject to write about today, however, despite all the obstacles being thrown at us, owning a property in Spain is still at the forefront of many people’s minds. After all, this will eventually come to an end…
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Many of you have asked what we think the effects of the Coronavirus outbreak will have on the prices in the Spanish property market.
Mark Stucklin from Spanish Property Insight recently carried out a survey, asking for opinions on the effect of the coronavirus COVID-19 on the Spanish property market, in particular the second-home market driven by foreign demand.
Here is a summary of some findings from this survey:
Coronavirus crisis and the Spanish property market survey – key findings
Coronavirus crisis: How long will the Spanish property market stay frozen?
The market is currently frozen in lockdown with no buyers. SPI asked how long people think the market will remain frozen with no meaningful number of buyers around, and
- 57% said more than six months,
- 30% said three to six months.
- 12% said less than three months.
So 88% of market actors expect the Spanish second-home market to be frozen for more than three months. If they are right, the industry will be purged as hard or more so than the Spanish property crash between 2008 and 2010. The majority of agents and developers in the holiday-home market could go out of business.
Coronavirus crisis: What will happen to Spanish second-home prices?
Some respondents rightly pointed out that price changes depend on where you are talking about. A luxury villa in Ibiza is not the same as a small flat in Benidorm. Without denying that, it’s also true that people have a general opinion regarding prices, even if there are big regional differences like there were last time the market crashed.
- 57% think that house prices will be dragged down a lot by this situation
- 37% say prices will fall a little.
- 6% expect no impact on prices.
Given that almost everyone is expecting Spanish second-home prices to fall either a lot or a little, we can be confident that’s exactly what will happen. Falling house prices trigger all sorts of related dynamics, but that’s a discussion for another day.
Coronavirus crisis: What will be the impact on foreign demand for Spanish property?
- More than three quarters expect the impact to be temporary lasting no longer than a year or two (75%)
- 17% expect the impact to be limited to a few months.
- 7% expect permanent damage to demand.
Coronavirus crisis: What will buyers do?
- 52% expect buyers to wait for prices to go down and bargains to appear.
- 20% say buyers will go ahead with their plans to buy as soon as it is safe to do so,
- 26% expect buyers to abandon their plan to buy this year.
- 5% to throw in the towel forever.
Coronavirus crisis: What will sellers do?
- 41% of sellers are expected to carry on as before, with no change in asking price.
- 16% are expected to reduce their price expectations immediately to try and find a buyer.
- 43% are expected to take their property off the market, either permanently (5%) or until the outlook is better (38%). So there might be far fewer properties on the market for a while.
As you can see from the figures, we do expect property prices to drop, however it really does depend on what you are looking for and where you are looking. Purchasers in a strong position to move forward as soon as the light turns to green will be the ones to gain.
There are property owners desperate to sell right now. We can find them for you if you tell us what you are looking for.
Due to the coronavirus, in many parts of the world, physical viewings of properties have become basically impossible with neither seller nor buyer wanting to face the risk of infection. It is also not advisable to take flights not travel if at all avoidable.
With our VIP video service, this is not an obstacle to purchasing a property in the Malaga and Costa del Sol region. I will visit suitable properties on your behalf and send unbiased photographs and videos, allowing you to make a decision from the comfort of your own home.
Remember, I am not an estate agent. I work only for you, the purchaser. I will ensure you purchase the property that is right for you.