Real estate bells begin to sound the end of low property prices in Spain

After a huge drop in property prices, prices are again beginning to increase. In the third quarter of 2013, property prices in Spain rose by 0.7 %. This data comes from the Housing Price Index (Índice de Precios de la Vivienda). This is the very first price increase since the second quarter of 2010.

The price increase was driven primarily by new developments where growth of 2.3 % was achieved, while prices of second hand properties rose by 0.1 percent. This is a difference against the trends recorded during the fall in prices when both types of properties showed a very similar tendency. For new properties during that period, the year-on-year drop was 7.9 %, while for second hand properties the figure was 8 %.

Growth helped mainly by foreign investors

The positive trend began mainly thanks to foreign investors. Since the beginning of 2013, Spain has become the focus of interest of foremost foreign investment funds which have found unique investment opportunities in this country. The richest man on Earth, Bill Gates, has made dozens of investments here.

This means that the prognoses predicting stabilisation of prices in 2014 and growth in prices linked to appreciation of investments from 2015 have started to come true. So this year could be the right time for buying property in Spain.

The Spanish economy is traditionally closely linked to the economy of the United States of America. The same applies when the Spanish real estate market copies the situation in the USA.

Tourism, real estate and economy on the threshold of growth

A relaxed lifestyle, beautiful beaches and a wonderful climate. All this attracts investors to buy properties in Spain. Rising property prices can help start up the whole economy in the same way as tourism, which is also very important for Spain. Tourism takes second place only to the automotive industry as the most important branch of the Spanish economy.

A record number of tourists came to Spain in July 2013 – almost eight million of them, which means year-on-year growth of 2.9 %. Over the first two quarter, the increase was even greater at 3.9 %. That is good news for not only for the local economy, but also for investors who bought property in renowned Spanish tourist destinations.

The influx of tourists means increased demand for accommodation capacity. Thanks to an increase in bookings, those who use their apartments for their own use in combination with renting out to tourists can therefore look forward to interesting yields, as well as the potential of appreciation of their assets.

Considering buying property in Spain? Visit our range of Spanish properties on sale, or ask us for a no-obligation consultation.

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