Are we on the crest of a property wave? – Comaskey Properties

Are we on the crest of a property wave?

The recovery of the real estate market may be around the corner in Spain.
There is evidence to suggest that the property sector in Spain is about to start a steady climb. Trends followers are blogging and tweeting that we can expect an increase in the both in numbers of units sold, numbers of distressed properties sold and euro value of investments along the Costa Blanca. This means that we can expect more buyers, with more money to spend within the next six months.

There are a couple of reasons for this optimism.
The main one is the widely held belief that every single property market worldwide works in 7 year cycles. The recession in the U.S. market started in 2006 so the start of 2014 should have seen the new cycle begin. Well, it has.
If its the same theory in Spain, and we have no reason to suspect its not, we should see a new influx of new buyers in Spain from the start of 2015.
This optimism is also fueled by the influx of foreign buyers, especially large investors who will help the sector. 20% of property these days in Spain is bought by non Spanish nationals. This may be set to increase substantially when Chinese, Russian and American investors gain even more confidence in the growth potential as well as other economic and tax benefits. (for example, the Golden Visa).
On top of this we can expect to see the steady flow of Belgian, Norwegian, Danish, Swedish, Irish and the old reliable British buyers too.
Stock markets across Europe are down year on year by about 15%. Is it any coincidence that property prices right across the European Union have increased by 15% in 2014?
More likely it suggests that investors are pulling their funds out of the volatile markets and into the old reliable- bricks and mortar.
Lets see what happens in 2015.

A quick personal note. I spoke to a client during the week who marvelled to me about the numbers of tower cranes he noticed on the way from Alicante airport to La Zenia. When he came here in February, there were none, or hardly any. This week he said it reminded him of 1999- the year before that massive 7 year property cycles began.

Ian Comaskey

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