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The financial crisis and the housing market in Spain

How does it affect your decision to buy a property in Spain?
Lisa Nilsson, Åsa Pettersson Real Estate, Fuengirola Published june 5th 2012

Since the financial crisis started in 2007, property prices in Spain in general have dropped by about 25-30%. As usual, the market regulates itself, and in large cities and in popular coastal areas, such as the Costa del Sol, the price haven't dropped as musch as elsewhere in Spain.

Spain is one of the countries in Europe that have been hardest hit by the financial crisis and particularly hard has it been out of the building and property industry. The building boom since 2000 has resulted in a large variety of newer homes that are empty because the real estate developers have not managed to sell them. The generous loan policy of the banks has also meant that many people today are forced to sell their homes because they can no longer afford to pay the mortgage. The range of properties for sale in Spain is now huge and you can really talk about a buyer's market.

Åsa Pettersson Real Estate

Phone:(+34) 952 59 31 32
Contact: Lisa Nilsson/ Stefan Brolin

With extensive experience in providing properties on the Costa del Sol, we have over the years helped many buyers and sellers. We can also offer help with tax returns, applications for NIE number, declaration of moving loads etc.

Buyer's market

If you are planning to buy a property in Spain it is the right time now. The low prices and great selection of homes creates good conditions for you to find your dream home at a reasonable price. The times of easy money is past, but it is possible to do good business if you are looking at purchasing property as a long term investment.

Although there are opportunities to make a good business that tempts you should be careful that you buy the home you want and that best meets your needs. Looking at different types of housing in different areas to come up with which one suits you best is a good idea. The main thing is that you enjoy and can use the property for your needs whether it is a holiday or a more permanent settlement. To buy a home now and then rent it out while waiting for of better times and a price increase can be seen as a good investment. In such cases, it is important to research the market and see what is attractive in the rental market. The range of rental properties has increased as it has been sold fewer homes.

Large selection of homes

The Spanish housing market may seem like a jungle with lots of items for sale and several different actors as individuals, real estate agencies and now even the banks that offer to sell their homes in Spain. Many real estate agents are also in contact with the banks and can offer homes that have been taken over by the bank. Although you can buy privately there may be a comfort to contact a real estate agent with good market knowledge, particularly for language's sake if you do not speak fluent Spanish.

Benalmadena PuebloThe question many are asking now is how the immediate future looks like in Spain. Will the prices to fall further or have we reached bottom? The prices announced are called the desired price. The way the Spanish property market works nowadays is that you as a buyer can bargain and put a bid in the seller's desired price. In this situation, the buyer often has an advantage in the discussion and the seller is forced to fall further in price to the sold property.

The financial crisis has for better or worse created a strong buying mode for interested speculators. What happens to the Spanish economy in the near future is an unanswered question but it is expected to increase gradually. For many British people Spain, and especially the coastal areas, will continue to attract both tourists and those wishing to stay more permanently in Spain thanks to its pleasant climate. The relatively short flight between UK and Spain are also an important factor in that it retains its appeal. A dream home in the sun no longer just a dream.


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