Are you ready to pay property tax in Spain? Know this: the Spanish market is recovering
The state of affairs in the Spanish housing market is certainly of interest to anyone who is going to invest in Spanish real estate in the near future and start paying state-imposed taxes on real estate in Spain. Buying a house or apartment at a time when prices have already started to rise, but have increased slightly so far, allows you to count on a good profit in the future. However, provided that the market growth continues. What is the current situation in Spain?
Last year ended with an indicator of concluded transactions at the level of 465 thousand. According to experts, this is the highest level of sales since 2008. And such a result can hardly be surprising, given that last year was a year of pronounced economic recovery for Spain. Last year, buyers concluded 15% more deals in the Spanish market than in the previous year. And this is despite the fact that the recovery from the crisis that hit Spain in 2008 actually began only in 2014, when the recession ended in the country.
Simultaneously with the growth of demand, real estate prices are also increasing. According to statistics, last year they increased by 7.6% compared to the previous year. Nevertheless, the pre-crisis level has not yet been reached: today’s real estate value is still 21% lower than it was at the peak of the real estate boom in 2007. This indicates that there are still opportunities for growth. It is quite possible to expect that the rise in real estate prices will continue this year.
Economic growth in Spain in 2017 amounted to 3.1%, which could not but have a positive impact on the state of the real estate market. The situation on it was recently commented on by Moody’s agency. Its experts note that low interest rates, along with a decrease in the unemployment rate, which now stands at 17% (10% lower than in 2013), are factors that positively affect the possibility of Spaniards purchasing real estate. Therefore, the agency is positive in its forecasts: according to its experts, the number of sales this year will exceed half a million. If this is indeed the case, then this figure will be reached for the first time in ten years. However, the pre–crisis level of about one million sales per year will not be reached soon. This is partly due to the fact that the construction sector has not yet recovered: activity here is only 40% of the 2007 level. However, the slowdown in the pace of construction has a positive effect on the number of unsold housing, of which there are still a lot in the country.
Foreigners are also ready to pay property taxes in Spain
According to the Spanish Property Registry, 13% of real estate transactions concluded last year were carried out by foreigners. The British and French are showing the greatest interest in buying houses and apartments in the country. In some regions of Spain, which are enjoying increased interest from tourists and investors, the share of foreign buyers in the housing market turned out to be significantly higher. So, in the Balearic Islands it was 35%, in the Canary Archipelago – 29%.
Currently, the busiest market in the country is Madrid and its surroundings. The real estate company Lucas Fox notes that the number of sales it made in Madrid last year was 92% higher than in the previous year. At the same time, the average value of real estate sold was 1.4 million, which is more than twice as much as in 2016. Prices in various areas of Madrid increased by 19-20% in 2017. Experts believe that this trend will continue this year, and prices may increase by another 11%.
