House prices are rising in double digits on several coasts. “Areas where prices have risen the most include Malaga, Mallorca, Ibiza, Lanzarote, Fuerteventura, and certain municipalities of Huelva, Alicantea,” says Soria.
The recovery is driven by foreign demand, which started growing again years before local demand, the article reports. “The British are still the main buyers but other nationalities like people from Nordic countries and Belgians are gaining ground,” explains Samuel Población, residential and land director at CBRE, a consultancy. “All of them have had to focus on resales, but now they are starting to buy new builds.”
End user demand amongst locals for holiday homes on the Spanish coast has not yet recovered because of worries about job security and salaries, the article explains. Local investors, on the other hand, are buying again, claims Beatriz Toribio, head of research at the Fotocasa property portal. “34% of second-home buyers plan to do short term rentals, compared to 7% thinking of residential rents,” she says. The increasing restriction of holiday lettings in tourist hotspots could cause problems for this demand.
Despite attention-grabbing annual price increases on some coasts, second homes are still 46% cheaper on average than they were in 2007, according to Tinsa’s data.
Though you can find holiday homes in Torrevieja for €50,000 or less, the bulk of buyers spend between €100,000 and €200,000, with Germans, Russians, and buyers from Nordic countries spending the most, according to trade sources. Foreign buyers prefer villas and semi-detached homes, whilst 75% of Spanish buyers prefer apartments with terraces.
Some areas like Castellón still have a large stock of unsold homes left over from the last building boom, whilst other areas like Ibiza, South Tenerife, and parts of the Costa de la Luz, new home inventories are almost nonexistent.
But some worry that things may be getting out of hand again. El Pais asked me for my opinion, and I said that, although we are still a long way from the madness of the boom years, I’m starting to hear voices like Campbell Ferguson of Survey Spain wondering how sustainable the latest building boom is.
The following map, prepared by the Spanish daily El Pais using data from the property portal pisos.com shows the average asking price, and latest annual increase, for all the main coasts, I assume based on asking prices in the portals data-base (which have to be take with a pinch of salt).
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