Date Published: 23/04/2020
ARCHIVED - Spanish property prices expected to fall as a result of the coronavirus pandemic
ARCHIVED ARTICLE
Analysts expect the effect to be less drastic than in the collapse of the market over a decade ago
The latest official property market data published by the Spanish government’s central statistics unit show that in February the number of homes bought and sold was just 0.1 per cent higher than in the same month last year at 44,104, but of course the March and April figures are likely to show dramatic falls due to the coronavirus pandemic and the national state of emergency.
It is estimated that as many as 100,000 real estate transactions will have been interrupted by the outbreak here in Spain; some of them inevitably will fail to complete.
In these unprecedented times there is great uncertainty over what the future might hold for the residential property market in Spain, but many analysts are confident that the real estate sector is robust enough for the inevitable downturn to be far less catastrophic than the collapse in 2008 and 2009. Sales figures will doubtless be affected – after all, more than a tenth of the year has already effectively been lost to the lockdown – but if the return to what Prime Minister Pedro Sánchez calls the “new normality” is a rapid one then the analysts of pisos.com and hipotecas.com forecast that the annual total of transactions may reach 450,000, just 10 per cent lower than in 2019.
The issue of market prices, though, is far more difficult to predict, and in fact the latest monthly report from valuation firm Tinsa identifies a 1.1 per cent rise in values across the country during the month of March (and a 5 per cent increase in Mediterranean coastal areas). With demand in rural areas and tourist zones likely to fall significantly, though, prices are almost certain to fall, and at the same time the expected increase in unemployment will mean fewer people being willing to purchase.
Taking these factors into account, the drop in market prices is expected to be between 6.5 per cent and 13.5 per cent in most areas, according to the study. However, this estimate could vary significantly depending on how the Covid-19 emergency develops over the coming months, and if large numbers of sellers find themselves facing difficulties there could be some extremely attractive bargains on offer later in the year!
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