According to recent Spanish government figures, just over 226,000 newly built and existing homes were sold in the first half of 2010, about half the number in pre-crisis years. More important, the rate of housing starts has slowed sharply: on current activity, the total will be fewer than 100,000 this year, compared with 800,000 in 2006.
Prices have fallen a nominal 20 per cent in the past three years, according to the central government, compared with year-on-year rises of about 17 per cent at the bonanza’s high point.
But official statistics do not fully reflect the pressure on banks and developers to sell stock at whatever price. Agents regularly talk of discounts of up to 50 per cent in some areas.
However, the ongoing lack of Spanish property sales suggest that Spain property prices need to fall further, despite the fact that values have plummeted in the past three years, mainly due to an oversupply of homes in the country.
The greatest prices falls were recorded in Catalonia (-2.4 per cent), Murcia (-2 per cent), and La Rioja (-1.6 per cent).
Despite the general residential price decline, asking property prices did rise in four autonomies. Resale properties in the Balearics increased by 2.3 per cent, followed by Navarre and The Basque Country (up 0.2 per cent), and Andalusia (up 0.1%).
This discounting, and the current weakness of the euro against sterling and other European currencies, is beginning to reawaken interest in the holiday home market.
UK interest in buying international property is up 138% on this time last year according to research by Primelocation International
The survey also discovered that;
– 32% were looking to emigrate from the UK permanently.
– 23.7% are interested in buying a holiday home,
– 12.4% are looking for an investment property overseas
“The truth is that foreign buyer interest never really went away,” says Victor Sagué, head of marketing and sales at Taylor Wimpey Spain. “There has always been a steady flow of enquiries.”
He says Taylor Wimpey has sold 150 properties so far this year, compared with 175 last year, 212 in 2008 and an average of 400 – or more than one a day – during the good times. “Spain as a whole is a very fragmented market and good locations and quality property will always sell well whatever the market conditions.”
So convinced is Taylor Wimpey of the nascent pick-up in demand, that the company recently pushed ahead with plans for a 54-unit residential development near Marbella, on the Costa del Sol.
