The Spanish property market has picked up enormously over the past 9 months. It was like someone switching a light on in January when the whole world seemed to suddenly remember that Spain the country, with the lovely sunshine, the beautiful beaches, the orange blossom and the smiley faced locals still existed. During the 8 years prior to that, you could be forgiven for thinking that the world had assumed Spain had disappeared off the face of the earth. There were some buyers but they were few and far between and almost without exception, they were looking for a bargain.
You may be able to blame some of the dearth of buyers on the new markets opening up. Like Cape Verde, that archipelago of 10 volcanic islands situated some 570 kilometres off the coast of West Africa near to Senegal and The Gambia and of course, Croatia, or the Republic of Croatia as we should really call it in the Baltic States. Then there was Montenegro, formerly part of Yugoslavia who made a guest part appearance on the “options” list and of course the slightly more whacky Albania, that little known country you can just pick out through the mist, when you look over from Corfu.
Why were we deserted for these younger, leaner and more exotic locations, well, I think when times get tough, people look for alternatives and are perhaps more prepared to try something new. These new destinations certainly ticked the box on price. The press were keen to pick up on how deep and how fast Spain was going down and who wants to buy in to a disaster? Nobody knew where the decline would end or what the Spanish government could, or would do, to arrest the crash. Then of course, there is that old word – image. Spain´s image had been getting knocked around for a couple of years before the big bang. People were getting a tad fed up with the stories or people being ripped off, of pensioners living in their garages because their house had been demolished due to a Townhall mishap regards planning and I think to some degree we were punished for our sins.
However, having been grounded for our transgressions, we have now been handed back the Xbox and Spain is back on the up and up. Not only is the property market perking up faster than expected and prices are starting to rise in some areas but foreign investors are keen to pick up shares in Spanish companies, in fact, 43% of Spanish shares are now under overseas control. The highest level of this type of investment since 2007. Likewise, Spanish tourism is on the up and up with the hotel sector attracting investors from the Middle East, Asia and the USA. This particular type of investment has hit an all time high. Over the coming 5 years, the Spanish government intends to create 3 million new jobs, no mean feat, and annual growth will be up 2.5% – 3% on previous years.
All these things show that we are, as Micky Flannigan would say, “back in the game”. The good thing about being grounded is that some people have learned their lessons, like the developers who are taking things a bit more slowly and making sure they have the right project, in the right place with the right financial backing instead of running at it like a bull at a barn door and throwing up project after project, many of which now lie empty and unsold. Our old friends the banks are likewise, taking things more steadily and somewhat novelly, making sure that clients can actually support and repay a mortgage before giving them one. That can only help Spain financially and our Townhalls are taking the subject of urbanisation more seriously. Most now provide an open service to anyone who wishes to make an enquiry although some charge for this like Puerto Real and some of our estate agents are making sure that they inform clients of any possible problems before they buy.
A fair bit of mopping up is still required though with the Spanish government talking about the possible demolition of property, built during the boom times, which still remains unsold . While the banks have done some work on selling this backlog to get them off their books, they are not estate agents and some 650,000 still remain unsold. This creates large tracts of skeletal property which neither enhances the local area or encourages investors to open new projects. The banks are finding the upkeep of these repossessions more costly than the loss of them so perhaps a very large bulldozer would clear the land and the market place. The land could go back to planning for new projects to be developed, giving employment to architects and in turn builders, carpenters, plasterers, plumbers etc. Is this perhaps where the government are going to find 3 million news jobs in the next 5 years? If they can do it, I take my hat off to them, people in work buy houses and when they do, they invest in all our futures.
I think it is fair to say that a good swift kick in the pants has done the Spanish property industry no end of good, and we go forward stronger and better than we were before.