Welcome to my pick of this week's highlights from accross the media about property in Spain. More data has shown that the market is booming, more experts have questioned the efficacy and the legality of Sanchez's proposals to restrict the sale of property to foreign buyers pointing to how changes to the law in recent years has lead to a huge reduction in rental stock and how construction has lagged behind the rate of increase of new households. Finally I look at an article that brings back worrying memories of past abuses in the industry and explain why I had to climb a big hill yesterday.
Average House Price at Highest Level on Record
In 2024, the average housing price in Spain reached a historic peak, surpassing levels seen during the 2006-2007 real estate bubble. Data from property registrars indicate an average price of €2,086 per square meter, driven by high demand and limited supply. Newly constructed homes averaged €2,265 per square meter, while second-hand homes were at €2,039 per square meter. A total of 636,909 property transactions were recorded, with a notable increase in new apartment sales. Factors such as strong demand, the influx of foreign buyers, and lower interest rates contributed to this growth. Experts warn of challenges in finding affordable housing and predict continued price increases in the medium term. Additionally, there was a 13.4% rise in mortgage signings compared to 2023, highlighting the market's dynamism.
Public Sentiment on Housing Policies
A recent survey indicates that housing is a primary concern for Spaniards, ranking third after inflation and the economic situation. The majority support interventionist measures to address the issue, such as limiting property ownership, enhancing inspections of illegal tourist rentals, and easing access to subsidized housing. However, proposals to increase inheritance taxes on real estate are unpopular. These findings highlight the complex political landscape surrounding housing reforms.
Interestingly while the survey shows that a majority are in favor of restricting the purchase of property for speculative reasons, the survey does not specifically refer to the proposal of a 100% tax on non-EU, non-resident buyers.
Anecdotally I am still finding that while the majority of people are in favour of policies that would help cool the market and help younger buyers onto the property ladder, they do not believe that the 100% tax is a workable solution, nor do they believe that it will have a positive impact.
Indeed the consensus amongst experts is that foreign buyers are not the source of Spain"s housing problems:
Spain's Housing Crisis: Slow Construction, Not Foreign Buyers, to Blame
Recent analyses suggest that the primary factor contributing to Spain's housing crisis is the sluggish pace of construction rather than the influx of foreign buyers. Experts argue that increasing the housing supply through accelerated building projects is essential to address affordability issues.
Property Owners Withdraw 300,000 Apartments from Rental Market Due to New Laws
Over the past three years, Spanish property owners have removed approximately 300,000 apartments from the rental market. This trend is attributed to recent legislative changes affecting property rentals, leading to a significant decrease in available rental properties.
Debate Over Restricting Foreign Investment in Housing
Following my update last week there has been further confirmation that the Government's proposal to levy a 100% tax on non-resident, non-EU Buyers would be unlawful. Critics argue it may conflict with the Treaty on the Functioning of the European Union, which ensures the free movement of capital. Additionally, such measures could strain bilateral investment treaties, like the one with Mexico. Experts recommend thorough legal analysis to avoid potential economic and legal issues.
Unauthorized Construction on Vulnerable Lands in Alicante
Alicante is witnessing a rise in illegal settlements on rural and flood-prone lands, driven by real estate speculation. Organizations purchase inexpensive plots, subdivide them, and sell them unlawfully. These settlements, comprising caravans, shacks, and prefabricated homes, lack construction permits and essential services, often resorting to illegal utility connections. Authorities have initiated investigations, resulting in halted works and legal actions. This issue reflects broader challenges in housing availability and affordability.
This article worries me as it brings back memories of the illegal practices that were abundant before the credit crisis. The properties in question are "temporary structures" however it reveals that while the law can be improved, it is of little help to unsuspecting buyers if it is not followed.
It highlights the importance of ensuring that you are properly informed and have the right professionals around you when you are contemplating a purchase. Everything you need to know about this is included in my Book - Chasing the Sun - Your Comprehensive Guide to Buying Property and Moving to Spain.
Unique Properties for Sale in Spain
A selection of distinctive properties has recently entered the Spanish real estate market. One notable listing is an 87-hectare estate in Huelva, featuring two houses and a bullring, formerly owned by bullfighter Sebastián Castella, priced at €1.55 million. Another is a newly built villa in Camp de Mar, Mallorca, boasting five bedrooms, seven bathrooms, and an infinity pool, listed at €28 million. Additionally, a modernist façade house in Premià de Dalt, Catalonia, with three levels, a garden, and a pool, is on the market for €2.09 million.
And some of my news...
It's been another busy week of research and filming in the Murcia region. I had to climb a big hill to get the perfect shot of this urbanisation for you.
Camposol earned a pretty poor reputation after the developers built a huge number of illegal and substandard properties. It got so bad that the location was featured on Channel 4's "Homes from Hell". Twice.
I spent the day there yesterday to see whether the "homes from hell" tag should still apply to Camposol. I was shocked by some of what I saw, but equally I was amazed at how much the location has changed since I last explored it in detail about 10 years ago. The video will go live in the Spring. Please subscribe to my youtube channel to be notified when it goes live.