The property market in Tenerife 2015
2014 has been an interesting year within the property industry and as you’ll read later, a year of improvement.
As I predicted in the article I wrote about the property market in Tenerife 2014, changes in the market, prices stabilising and a strong Pound Sterling have helped the market enormously.
39% of respondents felt that it was a good time to buy…
In the middle of January 2014 “The Economist” reported that property in Spain was still overvalued in comparison to average wages available per household.
In March 2014, El Mundo, the popular Spanish newspaper ran an online survey and found that 39% of respondents felt that property prices were at a point where it was a good time to buy a property, while 26% felt that they wanted to hold back and see how the situation panned out and 35% decided that it was still not a good time to buy a home in Spain.
Third quarter reports of property price increases…
During the third quarter of 2014, the Official Spanish House Price Index reported that average property prices had increased, although very modestly, by 0.3% year on year.
The National Institute of Statistics reported in September that the previous 4 months had been a bumper year for mortgage applications throughout Spain and each month has shown a double digit increase on the previous year’s results.
Recently José Luis Malo de Molina, the head of the Research Services of the Bank of Spain stated that the long and intense adjustment in the property market is coming to an end and that foreign buyers are re-entering the market, having been the first to leave the Spanish market after signs of a property bubble.
So, looking at the year of 2014, Spanish banks have started to agree more mortgages and loans, there’s been an increase in foreign investors all taking advantage of low prices – having dropped by up to 45% from their highest values before the crisis started, the majority of respondents in an online survey feel that now is a good time to buy, reports of small increases in average property prices during the third quarter of 2014, the Director of Research Services of the Bank of Spain sees the property adjustment coming to an end and a continual strengthening of Sterling helping UK buyers.
Looking towards 2015…
2014 has proved to be a year of reasonably stable prices in Tenerife, in fact in December of 2014 we actually had our first competition for years amongst 3 buyers fighting for a well priced property for sale. The price increased from an advertised €160.000 and ended up being sold for €175.000…a massive €15.000 over the originally advertised price. In itself, it’s a one off event and shouldn’t be taken as the norm, but how long will it be before the suppressed prices of the last 6 years start to be interesting to buyers and investors and more of this takes place thus pushing up asking prices?
Looking towards 2015, the general feeling of most estate agents here is more of a feeling of hope, more stable property prices and possible increases, an increasing number of foreign buyers, a higher number of property sales, a more fluid credit line to buyers and a good general outlook for the Spanish economy, it looks as though the property market in Tenerife 2015 could be a great year for both buyers and sellers.