10 years after the brakes were put on the rising prices…how is the Spanish market, especially the Tenerife property market?
During the Spanish property boom, prices went through the roof but abruptly came to a screeching halt in 2007 when the ceiling fell in on the property market – I hope you liked the use of the carefully chosen property oriented words there.
Prices crashed throughout Spain and drops of anywhere between 30%-50% were found depending upon the area that the property was situated.
Here, prices dropped in the region of 35% in comparison to their highs of 2005-2006, but being an island with limited building land and of course an island with sun, the prices were always going to be better than a lot of other areas of Spain.
So, as we see the Christmas trees being put up and the lights being switched on in readiness for the Christmas festivities and bringing to an end 2017, how has the year been regarding sales and property prices in general?
Demand has always been and still is strong for property in Tenerife and obviously continues to rise.
Despite Brexit, Brits still lead the long list of different nationalities of buyers throughout Spain, although the total amount of British buyers has dropped slightly overall. Interestingly though, this year Tenerife has seen Italian buyers become more prominent than British buyers.
Mortgages are getting easier to obtain, thankfully not as easy as it was back in the days of the boom, but nevertheless, things are moving after the Credit Crunch.
Employment figures have eased and are falling from the 33% unemployment high we had in the Canary Islands 4 years ago.
Interest rates are still low, meaning savings returns are poor, so property investment seems like a good idea now.
During 2016, the Spanish bank – Bankinter – made a statement about the Spanish real estate sector in which they said “The price of housing will keep rising modestly throughout all of Spain. Even though the increase slowed down during the first months of 2016, the moderate upward trend of prices that we have been estimating on our reports since December 2013 is still valid.”
This showed that even then prices were starting to the rise.
A growing worldwide economy along with low interest rates and a good chance of capital gain, makes property investment a good contender for your money and so the end of 2017 and going into 2018 looks like there’s going to be a continuing rise in property sales.
A limited number of properties for sale is also pushing prices up and in this is something that we’ve really noticed recently.
Sellers will very often have an inflated view of the value of their property, of course it’s their baby, but nevertheless, there’s been a distinct rise in asking prices and there’s also now a rise in those buyers that are willing to pay them.
It’s become quite apparent that prices in the more popular areas of Tenerife have increased by maybe 5%-10% over last year’s asking prices.
In fact, earlier this year, the property portal Kyero reported that figures showed that the average price of property in Tenerife had increased to just under €250,000, that was an increase of around 5% over 2016 prices and that average matches the average property price in the mainland.
It’s not quite a sellers’ market, where sellers can ask what they like and get it…at the moment it’s a situation where buyers with cash that can move quickly still have the upper hand and can make an offer that could well be accepted.
Mind you, the days of 20% discounts on sensibly priced property have long gone. As a seller, if you price your property realistically there’s a good chance you’ll get viewings and sell reasonably quickly.
The latest figures from the land registry and Spanish notaries seem to support the view that the market is well on its way to recovery in Spain as a whole.
The information for the number of sales recorded in the Land Registry show that property transactions increased by 25% in May 2017 compared to the same month last year.
Sales increased to 40,671, apparently, this was first time monthly sales had broken through the 40,000 barrier since September 2008, so Spain as a country is now on the up and I think we can officially say that the property market in Tenerife is on the turn.
So, here’s to a continuing upward change in the property market for 2018 and I hope you all have a great Christmas and a fantastic New Year…Happy 2018.