The Spanish Housing Market post-Covid-19: Our in-depth analysis.

This article is the fourth one, and the core of our analysis, of our dedicated reports on the Coronavirus, here is our introduction paper: What are the impacts of Coronavirus on the Spanish real estate?

Prices will come down as the economy slows. We should switch from a strong seller’s market, which means a market where sellers have the last word, to a buyer’s market, where the buyers will have the last word.

A lot of changes will take place in the Spanish real estate market in a post-Covid-19 era, here is a quick summary of our insights:

• Fewer transactions for 1.5 years, around -20% in 2020
• The Path to recovery will be economy dependent
• Spaniards will be more “picky” when looking for housing
• New criteria will become more important for house searching: space (inside and outside) and light, two scare attributes in city centres
• Madrid, Barcelona, Bilbao, and Santander should remain the strongest markets
• Spanish coasts and tourist areas could suffer more short term due to lower demand and higher supply
• Some foreigners could decide to relocate in Spain

Of course, an important question remains for many of our international readers: when will the travel ban be removed?

In this article, we will review the impacts of the Coronavirus on the Spanish Housing Market and analyse in detail:

• Expectations for the Spanish real estate market in a post-Covid-19 world?
• What are hot properties for Spaniards in a post-Covid-19 world?
• What are the ideal Spanish properties for foreigners in a post-Covid-19 world? Market update on foreigners activity. How can you seize potential real estate opportunities in Spain? Is it easy for a foreigner to buy while being abroad?
• Are distressed sales back in Spain due to Covid-19 as in 2008?
• Mortgage financing conditions update in a post-Covid-19 world

So let’s start.

What are experts’ expectations for the Spanish housing market in 2020 and 2021?

Is the real estate market in Spain back to “business as usual”?

Our understanding is that real estate agents will reopen doors on the 11th of May for general business.

What real estate business changes will be due to Covid-19?

Of course, one of the first impacts was that all house viewings were cancelled as the real estate market was frozen for two months in Spain.
A backlog of pending transactions has to be resorbed as well.

Two big trends will be seen midterm in the real estate industry

1. The digitalisation of the industry will accelerate. We are happy to be part of this as we facilitate the purchase of Spanish properties with our network of local partners. Of course, we are strong believers in this trend of online business facilitating transactions: real estate agents will create 3D showings, electronic signing of documents will become more common, and many other possible changes

2. To keep business running, the industry will have to put sellers and buyers at ease by taking measures to increase safety:
   • Precautions should be taken during any interaction with people: this means, in the office or during viewings: social distancing, wearing masks, and of course regular sanitising…

• • Meetings will be organised on an individual basis to eliminate groups of people coming into contact
  • Viewings should be well prepared: unoccupied homes, masks and hand gel provided, lights already turned on, doors all open (even for closets) so that no touching is needed
  • Signing meetings could place clients and employees in separate rooms and connect them via a video meeting
  • Sellers could have a difficult time with strangers coming into their home if they are still living in it

In short, this means that the industry will have to invest more into IT tools, and people as sales will evolve and be more challenging. The estate agent will need confidence from the sellers and the potential buyers. It will take much more time than before Covid-19, and in the beginning it will require more resources.

To conclude on the real estate business changes due to Covid-19: easy times are done for the industry: it will take more time to get a seller, to get buyers, and to make it happen. While there is a lot of uncertainty in the present world, one thing that is certain is that any step will be much more time consuming now, than before.

Experts’ expectations for Spanish housing market in 2020 and 2021

In 2019, 501.085 residential transactions took place in Spain.

Unsold new homes

A quick look at the supply side of new homes to the market as this was the main issue in the 2008 crisis. The number of unsold new homes in Spain is 460,000 as of the end of 2018. (most recent data available). Read more here: Where are the new build properties available in Spain?

As 25 million homes exist in Spain, it means that about 1.8% of all the properties are unsold newly built properties. Find this statistic always updated in our “real estate Returns and Mortgages in Spain” table.

Experts expect 25% fewer transactions in 2020 and see prices decreasing up to 15% as written by eleconomista.es. Bankinter’s analyst, Juan Moreno, published on the 27th of April an article in which he estimates that the price of housing in Spain will fall by around 6%.

Our insights on the Spanish real estate market

On the demand side

The housing market will not go unscathed, as consumer confidence and a strong labour market are the two essential elements in the decision to purchase a home.

Fewer buyers will come to the market than before:

• Spaniards will be less active to buy homes due to the weak economy
• As prices have risen steadily for the last six years nearly everywhere in Spain, buyers are afraid to pay top prices, we think this fear will vanish quickly IF the economy recovers
• Some Spaniards will want to buy a new home fitting with their new priorities, which means most of the time either buying “higher quality” housing in the city centres (bigger with outside space) or outside the city centres if they can’t afford it (but within acceptable commuting time)
• Wealthy Spaniards will reassess their situation and will look for bigger properties or buy second homes outside the city centres.
• Fewer transactions by foreigners short-term due to the travel ban and midterm due to the slowing economy in their home country: buying a holiday home is not an “essential” economic decision and as such will be postponed
• Some foreigners could decide to relocate to Spain to enjoy a higher quality of life
• Cash-rich investors will take advantage of opportunities (Spaniards and foreigners)

Read our to dedicated papers on that subject:

• What are the ideal Spanish properties for foreigners in a post-Covid-19 world?
• What are the new dream homes for Spaniards in a post-Covid-19 world?

On the supply side

More sellers will come to the market than before:

• Sellers from victims’ family of the Coronavirus
• Forced sellers due to the slowing economy induced by the lockdown and the travel ban
• Some Spaniards will sell their existing home for a “better” home: more light, more inside space, more outside space (terrace, garden,…) which means most of the time sell “low quality” housing in the city centres
• Sellers who are waiting due to the lockdown will be keen to sell as soon as possible
• As seen above, the supply of new homes is more reasonable than in 2008 but remains important

Related: What are the impacts of Coronavirus on the Spanish Economy?

Price evolution

Sellers that have to sell quickly will need to change their mind regarding price, vs before the crisis, and what is going get deals done. Have a look at our next section: Which Spanish real estate markets will thrive in a post-Covid-19 world? for a detailed analysis by region.

Of course, this should give a negative short term bias to official property prices. Midterm, the economy will tell us in which direction the real estate prices will go. We think that the trend should remain negative up until the end of 2021.

Two strong positives to keep in mind:

• Low financing rates should continue to give support to the real estate market, as you can check in our paper: Find the best Spanish mortgages
• Spanish rental yields are interesting. If you want to have a longer-term outlook on Spanish real estate vs other European cities, it could be interesting to read our analysis written in January 2020: What return will you make on your Spanish Property in 2020?

Don’t miss our quarterly update on the Spanish property prices for all the top 20 Spanish cities.

Which Spanish real estate markets will thrive in a post-Covid-19 world?

Madrid, Barcelona, Valencia, Bilbao, Santander real estate markets

Yes, in the short term after the easing lockdown measures some people will be tight on cash or will need to move on and be willing to sell at a discount. For example we expect a maximum discount of 10% in Barcelona and Madrid city centres, and maybe a little more for other cities to get a quick deal done. Please remember that those markets were strong earlier on this year and benefited from a healthy (not crazy) rebound since the bottom of 2014.
There could be a real demand for rural properties outside cities with up to a 1-hour commute. They will benefit from people looking for more space while working in those 5 cities.

Prime residential real estate in Madrid, Barcelona, Valencia

We see a very minor impact for premium properties in those cities as supply is low and demand should remain high.

Interest from both wealthy Spaniards and foreigners.

Wealthy people are reassessing their life choices and going for more private spaces: Wealthy Spaniards will want to get more space as residential units are “small” even by their standards due to historic constructions in city centres.

Wealthy foreigners will reassess their life priorities as well and could decide to get more sun and buy a nice property in Spain.

Don’t forget as well, that the current prices remain very competitive in comparison to European international cities. Read our Spanish property analysis for more on that.

The specific case of the fast train “AVE” cities: Valencia, Alicante, Barcelona and Malaga

During our last two visits to these cities, we confirmed fast train accessibility with our local partners. Thanks to the fast Train accessibility, the “AVE”: 1h46 for Valencia, 2h21 for Alicante, 2h45 for Barcelona and 2h38 for Malaga; these three cities are gaining traction from people living in Madrid to buy second homes. This trend could be accelerated due to Covid-19 as wealthy people living in the capital may be looking for more space.

The Spanish Costas real estate market

Many negative cross currents are impacting those areas:

• Those regions heavily rely on tourism. Regarding 2020 we have a lot of uncertainties: will the travel ban be lifted? Will foreigners be allowed to come on holidays to Spain?
• The second one is that some Airbnb owners could be inclined to sell their properties, especially, the ‘mortgage financed ones’ which should bring more supply to the market.
• Last but not least, a lot of new build projects are foreseen in these regions.

We wouldn’t be surprised to see big discounts on resale, higher than 15% for some deals, and some discount for new buildings as more supply is coming to the market.

Read more on that with our newbuild section in two paragraphs.

Find all our best Spanish Costas infographics: Costa Brava, Costa del Sol, Costa Blanca, Costa Barcelona, Balearic Islands, Canary Islands,…

For people who have known us for a while, they will be happy if they followed our advice and invested in cities with “real” economic activity rather than pure “touristic” cities. As we can see today, this was very important advice to follow.

If you understand Spanish and want to read further on the Spanish Costas property prices, here is another article published in the Expansion paper on the 10th of May.

Rest of Spain

We think that second-tier cities will suffer more than Madrid, Barcelona and Valencia and smaller cities will suffer even more. So, we wouldn’t be surprised to see deals with discounts higher than 15% in the rest of Spain as the economic situation is bad.

Newbuild

More supply is coming to the market as the industry rebounded from the 2008 crisis for a few years up to 2019, which was the best year since then in terms of units sold. A few interesting facts:

• The industry is in a much better place than in 2008: less leverage, better financing, less supply and strong players remaining
• 85% of units to be finished in 2020 are sold according to the president of the Spanish promoters’ association, APCEspaña, Antonio Gómez-Pintado, in the article of eleconomista.es
• 50% of units to be finished in 2021 are sold

This concludes our in-depth analysis of the Spanish Housing Market post-Covid-19. To end our analysis, we will cover those topics:

• What are hot properties for Spaniards in a post-Covid-19 world?
• What are the ideal Spanish properties for foreigners in a post-Covid-19 world? Market update on foreigners activity. How can you seize potential real estate opportunities in Spain? Is it easy for a foreigner to buy while being abroad?
• Are distressed sales back in Spain due to Covid-19 as in 2008?
• Financing conditions update in a post-Covid-19 world

Don’t neglect the basic recommendations to keep yourself and others safe:

• maintaining a social distance of 2 m,

• regular hand washing,

• cover your mouth when you cough or sneeze,

• avoid touching your face after touching hard surfaces where the virus can live.

Looking for a mortgage or a local expert in Alicante, Malaga, Valencia, Madrid, Barcelona,…? Ask us directly!

Stéphane

Senior analyst and strategist at HTBIS

Check the full HTBIS team here

The post The Spanish Housing Market post-Covid-19 appeared first on How to buy in Spain.

Valladolid wants to be more open to the outside

Valladolid was the capital of Spain during 5 years in the XVII century. Although it was the capital for a very short time, this city has always been the city of the kings! Most of the Catholic Kings married there, and many of the Spanish Kings were born in Valladolid like Enrique IV, Felipe II, Felipe IV and Ana of Austria, who was the queen of France.

Today, Valladolid, the capital of the autonomous community of Castile and Leon, is a city known for its culture thanks to its museums (such as the Oriental or the Contemporary Art) or its house-museum of José Zorrilla, Colón and Cervantes.

Why Valladolid?

Located in the Iberian plateau, it has a continental climate, with relatively cold winters (its average temperature is about 6-7 degrees) and hot summers, with maximums above 30 degrees in the months of July and August, although with nights are colder and the temperatures can drop to 15 degrees.

The city has more than 60 days of rain (with some snow) and over 2,600 hours of sunshine a year. Valladolid is very well located: Madrid is about 200 km, the border with Portugal is very close and at about 100 km and in about two and a half hours you can reach the Cantabrian Sea and enjoy its beaches.

How is the real estate market?

The price per square meter in Valladolid is just above € 1,100. Although prices are at 2002 levels, the recovery of the sector continues. For example, in the last quarter of 2016 7 houses per day (both new and second-hand) were sold, which meant the sixth consecutive quarter of growth and the third best data since 2012.

The average value of housing in 2016 was € 162,000 for newly constructed free houses and € 100,000 for second-hand houses.

Chart comparing Valladolid to the Spanish Real Estate Market

Where to live in Valladolid?

In total there are a little more than 300,000 people living in Valladolid. It is a medium city that is easy to get to anywhere walking.

The centre is the best area to live if you like to live in the hustle and bustle of the city. In addition, most museums and other cultural sites are located in this area. This area also has supermarkets, restaurants, bars, hospitals, schools and shops.

If what you are looking for is a quiet area, Parquesol is a neighbourhood on the outskirts of the relatively new city with all basic services covered and connections to the city centre.

The southern part of the city is ideal for families with children, with numerous schools and parks that children can enjoy. In addition, this area is connected to the centre with numerous bus lines.

Getting around in Valladolid

The city has more than 20 urban and intercity bus lines. The airport of Valladolid has 5 regular services to Barcelona, Lanzarote, Gran Canaria, Mallorca and Tenerife. If you are looking for more destinations, Madrid Barajas Airport is 200 km away.

The capital of Spain and other cities of the country can be reached by road or motorway. Valladolid also connects with Madrid via the AVE, the Spanish high-speed train.

If you want to invest in the Spanish real estate market in Spain, don’t hesitate to read our special report with the 10+ reasons why you should have a look at the Spanish property market.

Do you want to check the yearly weather statistics in Valladolid before buying? Check our infographic on the yearly weather statistics of all the 18 biggest Spanish cities.

Get your insights right to your mailbox? Register to our newsletter: https://howtobuyinspain.com/en/newsletter/

Looking for an expert in Spain? Ask us directly!

Raimon

Senior Journalist and writer at HTBIS

Check the full HTBIS team here

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Zaragoza, the gates of the Pyrenees

Zaragoza, halfway between Madrid and Barcelona, is the fifth most populous city in Spain. Its good communication with Barcelona and Madrid and its proximity to the Pyrenees makes this city an interesting option for those who are looking for a city not very big, well-connected, and at the gates of the mountains.

Why Zaragoza?

Zaragoza is quiet, with the two main airports of Spain at about 300 kilometres, but very well connected thanks to the AVE: two hours by train to both Madrid and Barcelona.

Its temperate continental climate makes it possible to enjoy some warm summers and not very cold winters when compared with other places in Europe.

How is the real estate market?

As in much of the Spanish state, the real estate market of the capital of Aragon is experiencing a slow recovery. The purchase and sale of housing increased by around 15% during 2016. The price per square meter was at the beginning of this year close to € 1.200 being the cheapest city of the five largest cities in Spain, and still very far from the historic high that was made in 2007, when the price per square meter was more than € 2,500. The predictions for this year are positive and prices are expected to continue to grow throughout 2017.

This chart is a comparison of Zaragoza vs the National average.

As for the community of Aragon, the purchase and sale of flats among foreigners increased by 40% in 2016.

Where to live in Zaragoza?

The Old Town is the centre of the city. In this area are most of the shops, as well as most schools and hospitals. It is also the cultural centre of Zaragoza since most of the museums and sites of cultural interest are in this neighbourhood.

The area of Actur, not far from the centre, offers more tranquillity than the centre itself. This area also has basic services, and thanks to its proximity to the centre make it a good place to live if you do not want to be away from the hubbub of the centre. In addition, some faculties of the University of Zaragoza are in this zone, reason why its environment is quite youthful.

Casablanca is also a relaxed neighbourhood and ideal for families to live there. Also, it is located next to the centre, so if you need something that is only in the Old Town this is not far from the neighbourhood.

How to get around Zaragoza?

Trams and buses are the best options to get around the city, although this is also easy to walk or bike. The high-speed train, AVE in Spanish, connects with the two main cities of Spain, Madrid and Barcelona, making it possible to reach them in less than two hours. It also connects with Huesca, the gateway to the Pyrenees. Read our recent article on the 25 Years of the high-speed train in Spain for more on that.

Zaragoza also has an airport, although its volume of flights can not be compared with the airports of Barajas (Madrid) and El Prat (Barcelona). The network of roads and highways connects the city with other points of Aragon and Spain.

If you want to invest in the Spanish real estate market in Spain, don’t hesitate to read our special report with the 10+ reasons why you should have a look at the Spanish property market.

Do you want to check the yearly weather statistics in Zaragoza before buying? Check our infographics of the yearly weather statistics of any Spanish city and on Zaragoza.

Get your insights right to your mailbox? Register to our newsletter: https://howtobuyinspain.com/en/newsletter/

Looking for an expert in Spain? Ask us directly!

Raimon

Senior Journalist and writer at HTBIS

Check the full HTBIS team here

The post Zaragoza Real estate market in 2017 appeared first on How to buy in Spain.

Seville, the charm of the south

Seville, the biggest city of southern Spain, is also one of the cultural capitals of the country. Its Giralda and Reales Alcázares (royal palace), see picture at the top of this article, are the symbols of the city. The easy-going atmosphere and its warm climate (although sometimes too hot in summer) make the capital of Andalusia one of the most livable cities of Europe.

An encounter of two cultures

During four centuries Seville was a part of the Muslim country that controlled southern Spain during the Middle age. These events shaped the city. The style of the most important monuments is influenced by the Islamic artistic canons of that time. That’s why a walk in this European city can give you a feeling that you are somewhere in northern Africa.

Who invests in Sevilla?

According to Guido Larrain from Look & Find Maxima Inmobiliaria, “the top buyers are Russians, Chinese, French and Germans”. He also adds that “in the last six month we have seen an increase of buyers from Russia”.

How is the situation on the real estate market?

As it is happening in the whole country, Sevilla’s real estate market is recovering from the dark years of the crisis. In the beginnings of 2017, the price per square meter was a little bit above 1.600€. In some areas, like the centre of the city, prices are between 2.000-3.000€.

Check real estate prices of Seville vs the national average

In 2016, there was an increase of 10-15% of people buying houses, and the forecast for this year says that the increase will be similar.

Where to live in Sevilla?

Guido Larrain (Look & Find Maxima Inmobiliaria) points that “most of the buyers prefer houses in the Centrical and Monumental centre of the city”. This is one of the most beautiful areas of Sevilla, with all the must-visit places just a few minutes away. The area is also full of bars and restaurants with local food.

Triana is considered the soul of the city, it is a blooming neighbourhood just next to the centre. If you want to live as the locals do, this is your choice.

Nervión is another area considered as the modern centre. This neighbourhood is quieter than the centre itself and Triana, but it has all the things that you want (shopping malls, restaurants, supermarkets, schools, etc.). It is also the district of Sevilla with more green areas.

Los Remedios, also a modern district as Nervión, it is a good choice if you are looking for a quiet place where to live (the busy centre and the tourists visiting the city are far away).

La Alameda de Hércules is the art district, with local shops in its narrow streets. This is the place where you can find 100% Andalusian houses.

Get in and around Sevilla

Metro, bus and trolley car are the best options to move around the city. There are high-speed train connections between Seville and Madrid, Barcelona and other cities of Andalusia (they are also reachable by highway). Sevilla’s airport has flights to the main cities in Spain as well as some flights to the main cities in Europe.

If you want to invest in the Spanish real estate market in Spain, don’t hesitate to read our special report with the 10+ reasons why you should have a look at the Spanish property market. Our last paper on the Costa de la Luz: Everything you ever wanted to know about the Costa de la Luz could be interesting for you.

Do you want to check the yearly weather statistics in Valencia before buying? Check our infographic on the yearly weather statistics of all the 18 biggest Spanish cities.

Get your insights right to your mailbox? Register for our newsletter: https://howtobuyinspain.com/en/newsletter/

Looking for an expert in Spain? Ask us directly!

Raimon

Senior Journalist and writer at HTBIS

Check the full HTBIS team here

The post Discover the charm of the south and invest in Seville appeared first on How to buy in Spain.

On the 21st of April of 1992, the fast train was born in Spain

The first route to be open in Spain was the Madrid to Seville route with 471 Km. Since 1992, the network expanded to more than 3000 km and more than 11 different routes.

They call it the AVE “Alta VElocidad” train in Spain. To party on that, the Prime Minister, Mariano Rajoy, announced an “anniversary campaign” that should last one year where they will sell 250.000 tickets at 25€. The sales will take place on the 25th of each month.

A few facts on the AVE -fast train- in Spain

• 357 M passengers transported
• 20 M transported last year
• Occupancy rate higher than 85%
• On time arrival higher than 95%
• Speed average higher than 200km/h with the fastest speed of 350km/h
• Fast trains are competitive vs plane for ranges of up to 1200 km or the equivalent of 5 hours of travel
• 52 bn investments according to the Adif, the manager of the Spanish Rail Network
• 1500 km are under construction according to the Adif

What is the AVE network in Spain?

• Madrid – Seville AVE, Madrid Puerta de Atocha – Ciudad Real – Puertollano – Córdoba Central – Sevilla.
• Madrid – Barcelona AVE, Madrid Puerta de Atocha – Zaragoza Delicias – Lleida – Camp de Tarragona – Barcelona Sants.
• Madrid – Huesca AVE, Madrid Puerta de Atocha – Guadalajara Yebes – Calatayud – Zaragoza Delicias – Tardienta – Huesca.
• Madrid – Valladolid AVE, Madrid Chamartín – Segovia Guiomar – Valladolid Campo Grande
• Madrid – Malaga AVE, Madrid Puerta de Atocha – Córdoba Central – Puente Genil Herrera – Antequera Santa Ana – Málaga María Zambrano.
• Madrid – Cuenca – Albacete AVE, Madrid Puerta de Atocha – Cuenca Fernando Zóbel – Albacete Los Llanos.
• Madrid – Alicante/Alacant AVE, Madrid Puerta de Atocha – Cuenca Fernando Zóbel – Albacete Los Llanos – Villena AV – Alicante/Alacant.
• Madrid – Valencia AVE, Madrid Puerta de Atocha – Cuenca Fernando Zóbel – Requena / Utiel – Valencia Joaquín Sorolla
• Málaga – Barcelona AVE, Málaga María Zambrano – Antequera Santa Ana – Puente Genil Herrera – Córdoba Central – Zaragoza Delicias – Camp de Tarragona – Barcelona Sants.
• Barcelona – Sevilla AVE, Barcelona Sants – Camp Tarragona – Lleida – Zaragoza Delicias – Ciudad Real Central – Puertollano – Córdoba Central – Sevilla Santa Justa.
• Valencia – Seville AVE, Valencia Joaquín Sorolla – Cuenca Fernando Zobel – Ciudad Real Central – Puertollano – Córdoba Central – Sevilla Santa Justa.

From where in France can you come to Spain with the AVE?

Renfe and SNCF in partnership take you from 15 French cities to Spain.

Use the AVE to discover:

• Madrid – Barcelona – Marseille
• Barcelona – Paris
• Barcelona – Lyon
• Barcelona – Toulouse
• And many other smaller cities like Carcassonne, Lyon, Marsella, Nimes, París, Toulouse, Narbonne, Béziers, Agde, Sète, Montpellier, Avignon, Aix-en-Provence, Valence.

The good network of communication is one of the advantages of Spain: Train network, Road network and of course many airports. Have a look at our paper we wrote on the 10+ advantages why you should invest in Spain.

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Do you want to book a fast train ticket from Europe?
Do you want to book an AVE, fast train, ticket in Spain? Check the Renfe website.
More on the 25 years of the AVE?

Picture source: Renfe

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