How will a temporary “pause” affect the real estate market in Spain?
Let’s clarify the situation. At the moment, the market has not fallen, but is on a “pause” – the suspension of all operations. Both in real estate and in all related industries: banking, construction, legal support of transactions, etc. Of course, in the near future we will observe a certain decline in economic indicators in the economy. And this will entail some reduction in prices and purchasing power, but expectations should be reasonable. If we are talking about the secondary real estate market ina Spain, then why there won’t be a hard drop in prices? Everything is quite simple. Some property owners will make discounts on their properties, this is a fact. But you shouldn’t expect that many will do it and these discounts themselves will be huge, and this will create a general “weather” in the market.
Long term rental
Many owners will simply suspend sales and try to move to an adjacent industry: rent. The demand for long-term rentals throughout Spain, and in the province of Alicante in particular, is very high. Terms for rent until recently only tightened. The state introduced new regulators, prices rose from year to year. Plus, this sector will not become smaller – borders are closed and potential customers will remain in the country. There is another very significant factor: currency fluctuations. All this means that there will be more rental offers, requirements will soften, demand will be satisfied, and there will be more satisfied consumers and sellers in the sector. All this will reduce the overall tension in the market and this pause will be enough to stabilize the sales sector.
As for the primary real estate market, much will depend on the policies of the state and banks, which will directly affect the mood of private investors and developers. Forecasts are too early to do. However, the general democratization of banking requirements is a good sign. The state, most likely, will also respond positively in order to mitigate the consequences of the impending crisis in this large and important sector of the economy. Therefore, investment in real estate has always been, is and will remain an excellent investment.
Regards, wishes of health and peace,
Anna Lyubavina and the team of Broadway Consulting Corporation SL