Spanish Property Market Recovery Slows

The Spanish property market recovery has slowed slightly according to the latest figures for February released by Spanish property valuation company Tinsa.

The figures show that the recovery slowed to an annual increase of 4.1 per cent last month, representing the lowest annual rise since April 2018, and the company reports that after dropping by one per cent during the month their index is now 13.8 per cent higher than when the market bottomed out in February 2015.

However, the recovery has been strong, with Spain’s regional capitals and other large cities seeing market values rise by 23 per cent over the last three and a half years.

Elsewhere over the same period there have been rises of 18.4 per cent in the Balearic and Canary Islands and 13.6 per cent in Mediterranean coastal areas. Only the catch-all category of ‘other municipalities’ has somewhat let the recovery down with a rise of just 5 per cent.

During 2018 the areas showing the strongest recovery over the year were regional capitals and other large cities at 7.2 per cent, followed by metropolitan areas at 4 per cent and Mediterranean coastal areas up by 2.9 per cent.

Lagging slightly behind during 2018 were the Balearic and Canary Islands at just 0.3 per cent and other municipalities rising by only 0.6 per cent.

2018 ended with a year-on-year increase in sales of 5 per cent nationally during the recovery, while the accumulated rise during 2018 was 10.9 per cent according to Tinsa.

The number of Building licences granted showed a rise of 24.7 per cent over the year, and mortgages granted were up by 11.3 per cent over 2018.

Part of the reason for the slowdown in the rate of recovery in the Spanish property market could be that the number of overseas property investors slowed in the final quarter of 2018.

It is the first time for several years that the number of foreign buyers has not increased in a quarter on an annual basis. However, even though growth has fallen to zero, overseas property investors still account for around 13 per cent of the Spanish property market, where it has been since 2014, having risen from a low of 4 per cent in 2009.