Spanish Real Estate Market is showing Signs of Stability
According to the latest data published by the Ministry of Public Works, Spain's real estate market is finally showing signs of stability. In the first quarter of this year, the housing market saw transactions to the value of 10,540.6 million euros, 0.8% more than in quarter one of 2014. It is a first sign that anyone currently thinking of investing at the Costa del Sol or perhaps buying a retirement home or holiday apartment in Marbella should do so sooner rather than later, when prices are on the up again.
New housing, however, is still not performing well. Here a total of 1,489.1 million euros was registered for the first quarter of 2015, which represents a fall of 17.7% over the same three months in 2014.
The second-hand housing sector, on the other hand, was doing far better. With second-hand apartments available at the Costa del Sol for less than 100,000 euros, it is not surprising foreign buyers want to dip a toe in the real estate market without committing to a large investment. Prices are still bottoming out in many parts of the country. The second-hand housing market saw transactions to the value of 9,051.5 million euros, a 3.8% increase year-on-year with 2014.
While Andalusia region registered house sales to the tune of 1,901.8 million, Madrid is the undisputed winner in the real estate market so far with transaction to the total value of 2,075.8 million euros having been registered for the first quarter. Losers were Ceuta and Melilla, regions which only managed 25.6 million euros together in house sales. This suggests that house purchases in the capital are made ahead of a full recovery in the employment sector.
Second-hand Homes Market still more buoyant
The increase in sales of second-hand homes is, to some extent, explained by increased offerings of seats on low-cost airlines. Budget carriers transported 12.15 million passengers in the first five months of this year, a 10.7% increase over the same period in 2014. Budget air travel accounted for 48.6% of all air traffic passengers, according to the Ministry of Industry, Energy and Tourism's own data.
Budget travellers who fall in love with the Malaga Province and dream of owning a holiday home in Marbella, Malaga itself or Estepona don't have to dig too deep into their savings at the moment to buy their first holiday home at the Costa del Sol.
With a little research it is possible to find even a one-bed, one-bath apartment in Marbella for less than 100,000 euros. Such a second-hand home may need a little upgrading, as they have usually served time as a holiday rental. However, mostly it is cosmetic changes like giving the walls a lick of fresh paint and putting in new furnishings. It's a good long-term investment vehicle that can be rented out to holidaymakers for part of the year, paying for expenses like electricity, maintenance and taxes.
In Marbella's high-end property market wealthy buyers often purchase second-hand homes only to have them demolished. This is not reflected elsewhere at the Costa del Sol, but then , Marbella attracts the super rich who can afford to buy a villa for 2.5 million euros only to tear it down and build a brand new, super-luxurious home to their own specifications.
Spain's Employment Market improves
One cannot quite see budget airline customers doing the same - in May this year the number of passengers arriving with low cost airlines grew by 8.5%, reaching more than 3.5 million, representing 35% of the total number of international air travellers welcomed in Spain. House buyers among such air passengers are more likely to opt for second-hand homes at the Costa del Sol that are ready for use, which isn't always the case with newly built homes.
Coupled with more promising reports on the employment sector front, Spain's housing market is clearly on the brink of a recovery. The number of people in employment in Spain rose by 0.8% in the first three months of 2015, compared with the previous quarter. This is the biggest rise recorded in the Eurozone and the fourth largest in the European Union, according to Eurostat (European Commission Statistical Office).