It looks like the Spanish property market hit rock bottom during the first half of 2010, but now it is starting to show signs of improvement in terms of property trading and prices.
Official and non-official figures show a slight improvement in property trading, and the academic institution IPE (Instituto de Prácticas Empresariales) dares to forecast that starting in January 2011 prices will start picking up at a 4% yearly rate.
It was a brave statement… God bless the IPE if they are right.
The rise of internal demand is very acceptable but the demand from foreign investors is still punishing a market that once upon a time was a reference of business and money making in the sun.
The internal demand rose in May and June by 11% and 7% respectively, in comparison with the same months in 2009. Far away from this improvement, the figures are quite poor regarding foreign buyers: during the first half of 2010 just a few more that 500 units were sold to private foreign investors.
The market will never be as it was before, when it offered spectacular ROIs. But it has probably reached a point of stability, which is a good re-starting point.
Maybe it is an illusion and we need to wait a few more months to see the evolution of the market performance. Or, potentially, it may be a good time to buy. Euribor is still low, the rental market is getting stronger (buy-to-let investors keep an eye out) and prices seem to be stable with more room for improvement.
ADVICE: If you are ready to invest now, get a reputable agent to help you. The crisis has slapped “property cowboys” out of the market, but you will still need the right help to buy in a good location. Otherwise you are going to fail in Spain.