The latest index prepared by Tinsa, Spains’s largest valuation company, estimates that in September 2013 the average property price continued getting cheaper at a rate of 9.2%. Thus, since reaching their peak values, houses in Spain have suffered an adjustment of 39.1% overall. However, as we have stated in previous posts, the reality is very varied if data are analysed per region and/or per market segment, and Mallorca and Ibiza’s high-end properties continue to behave significantly better than average, proving to be somewhat immune to the general Spanish market.
There is always some room for optimism. At BNP Paribas Real Estate they beleive that 2013 will be a “particularly favorable” year to successful investing in the Spanish property market. Although “current levels of uncertainty have distracted attention from some international investors”, BNP said that Spain has “ten strengths” that make investing in Spanish real estate a very attractive option, according to their ‘Guide to Investing in Spain’, a handbook aimed primarily at international investors which offers a list of reasons to opt for the Spanish property market. Among these, the price of real estate, from residential and commercial to hotels and plots, is particularely relevant, as it is at its lowest levels in recent years. At BNP Paribas Real Estate they beleive that this fact represents “a unique opportunity” to successful investments with returns in three to five years, as the economic recovery pushes up prices.
The report also argues that after years of low returns, the main markets of Madrid, Barcelona and Valencia are offering stable income. Furthermore, the guide assures foreign investors that Spain has a legal framework that favors them, as Spanish law has moved towards market liberalization, and reforms have been undertaken in the labor market and the financial system that are atracting investors’ confidence and increasing competitiveness.