Market of Spanish Property to improve in 2021!

The Spanish housing market surprisingly stopped when the coronavirus pandemic first hit Spain in March 2020. Immobilien agents predict sharp declines in Spanish property prices due to COVID-19, with a shortage of views and increasingly increasing infections. qatar real estate

Although the Spanish property market deteriorated during the first half of 2020, the interest rose in the summer months as restrictions were eased and the possibility of a vacation home was once more an enticing option for foreign buyers.

With international buyers accounting for a large share of Spanish property purchases, Spain will remain an ideal destination for sunbathing or retirement abroad. Although limitations on transfers have prohibited foreign buyers from viewing properties in Spain, coronavirus vaccinations offer those who want a holiday home a brighter future. As a consequence, 2021 is expected to be a much stronger Spanish property year.

The overall economic outlook for Spain is also improving, as it took a worse turn last year. In May 2020 the Bank of Spain reported a 12.4% decline in gross domestic product (GDP) and an increase in unemployment of 20%. As a result, agents expected a sudden but unavoidable price drop in the Spanish real estate industry.

There were opposing views on how much Spanish property prices would be affected. Colliers International Spain anticipated a 5-10% drop in property prices for the short term in 2020 although FUNCAS, the Spanish Savings Bank Foundation, announced that they believe that the drop would increase by 10-20% in the region.

Following the demand for property during the second half of 2020, the Spanish property prices continued to increase by 1.2 percent – a far more optimistic result than many anticipated.

Take a look at the various areas in Spain that will be the most demanded of the future of the Spanish immovable market.

Mallorca, Spain Luxury House ( Balearic Islands )

Where will the biggest boom be in the Spanish property?

During the first half of 2020, land agents expected sharp declines in property prices in some of Spain's most important tourist destinations, including the Canary Islands, Palma, Mallorca, Alicante and Barcelona.

Although these Spanish tourist destinations were especially hit last year due to restricted travel by COVID-19, they are also the areas with the highest level of unemployment and overall development.

In 2021 Spanish tourist destinations, however, according to estate agents Engel and Volkers, may again have a strong demand from property buyers. The company reported that the Spanish property quest increased 64 percent in the first two months of 2021 compared to last year.

This pattern is a strong explanation for the lack of appetite for Spanish homes due to the crisis of coronavirus. Engel and Volkers highlight that, because of its strong Mediterranean lifestyle and culture, Mallorca is especially popular among international purchasers this year.

"Mallorca ticks every box for our clients who want to invest in the island where the premium end of the real estate market stayed steady, despite the rollercoaster years we had seen in 2020." Florian Hofer, Managing Director of Engel & Völkers Balearic Islands.

Spanish property arial view during a coronavirus pandemic

Spanish property sector outlook in 2021

As it stands, the pace of growth in the Spanish property sector for 2021 is currently unknown. However, real estate agents believe that all the signals point in a favorable direction in order to improve the Spanish economy. While there is obviously still strong demand from foreign buyers, emerging coronaviruses across Europe weigh on the overall economic outlook for the European Union (EU).

However, analysts have forecast that Spain's GDP would rise by 4.4% in 2021 and expect that the economy will rebound to prepandemic levels by 2022. With UK holidays abroad in the run-up to May, we hope that tourism can raise much, increase unemployment and increase property prices.

Those who purchase Spanish homes from the United Kingdom are also required to have a visa if they want to stay in their holiday home for more than 90 days within 180 days. Though demand is high, many are still accustomed to the new laws, which means that increasing searches of internet properties may not actually result in real sales.

Only time will say if the Spanish property market represents the predictions of many agents, and how long those adjustments will last.