A SHARP rise in the number of fixed-rate mortgages in Spain has been reported in the past two years – and they now account for 43% of every new loan taken out.
Residential home value hikes 'above average on coasts and islands'
12/09/2021
HOME prices rose faster than the national average in several of Spain's key coastal hotspots in the second quarter of this year, with the Canary Islands leading the field.
Across the country, residential property values increased by 3.3% year on year, and the figure nearly doubled off the mainland.
Latest Home Price Index (IPV) and National Statistics Institue (INE) data show that the cost of buying a house or flat in the Canaries shot up by 6.7% between April and June inclusive, based upon the same period in 2020, and in the Balearic Islands, by 5.7%.
Cantabria, on the northern coast, reported a rise of 5.3%, whilst Murcia in the south-east jumped by 4.4% and the Mediterranean region of the Comunidad Valenciana was just behind at 4.3%.
The national rise of 3.3% is the highest seen since 2019, the last 'normal' year before the pandemic reached Europe.
New builds were 6% more expensive as at the end of June and second-hand properties had gone up by 2.9%.
In Comunidad Valenciana, brand-new homes climbed in value at a slower pace than the average for Spain – 5.3% - but existing residential properties rose by well above the typical national figure of 2.9%.
For Cantabria, a similar pattern was seen – newly-built houses and apartments up by 4.3% and pre-loved homes by 5.5%, although in Murcia, both types saw above-average rises with new properties experiencing a 6.8% hike and second-hand homes valued at 4% more than in the second quarter of 2020.
This was also the case for the Canary Islands, where growth in either type of residential property price was comfortably above the national average and with very little difference between them – 6.5% for new and 6.4% for second-hand.
Price growth returns to normal after 'pandemic year' slowdown
All these regions saw greater growth in home values in the second quarter of 2021 than they did in the first quarter, and typically slightly above the mean figure for Spain as a whole.
Nationwide, home values have been rising consistently for the last 29 quarters, or since March 2014, even during the first few months of the Covid crisis.
Growth slowed somewhat in the second quarter of 2020 – after a hike of 3.2% between January and March inclusive, residential property values only rose by a national average figure of 0.9% from April to June, the lowest increase seen since spring 2013 – but since the latter end of 2020, home price recovery has been consistent.
This is particularly true of pre-owned homes – during the second quarter of 2020, these only went up in value by 0.7%, compared to 2.9% in the second quarter of 2021.
Even though the Covid crisis is still present to a greater or lesser degree, the IPV and INE figures demonstrate that the value hike in second-hand residential property in the spring of 2021 was the largest year-on-year rise in six years.
Relaxing movement restrictions helps – especially on the Costa Blanca
Alicante's Property Developers' Association, PROVIA, says reducing limitations on movement imposed as a result of the pandemic has been key in housing market recovery, since 'those who were too frightened to sign their contracts online' have now been able to 'pick up the keys to their new abode in person'.
The northern half of the Costa Blanca – as the Alicante-province coast is known in tourism circles – bounced back the most, says PROVIA secretary-general Jesualdo Ros.
Also, construction work which stopped altogether in early 2020 and was forced to slow down over the following 12 months has been almost back to normal levels since May this year, with new seafront developments now near completion in Benidorm, Dénia, San Juan, and also a few kilometres inland from the beach, in Polop.
Province-wide property developer associations say Spanish buyers led the spring recovery – those seeking holiday homes as well as those moving house – and they look forward to an ongoing increase in traveller confidence to stimulate the foreign buyer market now that the so-called 'Covid passport' has been officially released and most of the continent of Europe is very advanced in the vaccine roll-out.
Property developer associations say that although the typical foreign buyer on the Costa Blanca is a retired northern European seeking better weather, they are also seeing a slight rise in interest among younger foreign adults who work from home and want a greater level of quality of life during their time off – such as being on a sun-drenched Mediterranean coast – and who are, additionally, concerned to make sure wherever they move to is as safe as possible in Covid terms.
In fact, according to regional and national media, a recent global survey found Alicante city to be the second-most popular worldwide for people to want to move to if they were able to work from home.
Remote working was relatively rare in Spain before the pandemic, but is now very much part of the employment panorama and looks set to remain, particularly as the debate goes on at all levels, among unions, government and industry, about the need for a greater work-life balance.
This means Alicante-province residential home developers are quietly confident they will see a gradual climb in national and foreign buyers who, otherwise, would not have been able to live on the Costa Blanca until they retired.
Gandia, 'most profitable' returns on buy-to-let property
Reports in Comunidad Valenciana regional press say those who are seeking to buy a property to rent out for a regular income will get the best returns from a home in the southern Valencia-province coastal town of Gandia.
Taking into account only large towns and cities, the Levante-EMV quotes a capital return of 7.9% annually in Gandia, based upon the current prices of properties in the main urban hub or, a few kilometres away, its beach area (pictured below), and the going rate for renting, which is at present among the most affordable for a coastal enclave.
The calculations cited say an investor letting out a home in Gandia year-round would make their original outlay back in 12-and-a-half years if they bought in cash, rather than with a mortgage.
A district capital about 65 kilometres south of Valencia and around 80 kilometres south of its airport – with a direct rail link to the city, which is connected straight to the terminal by metro – Gandia has around 77,000 residents, and its coastal areas are popular with national and French tourists in particular.
Across Spain as a whole, investment return for landlords is quoted in the Levante-EMV as being around 6.7% on average, but differs widely from region to region.
Alicante city is ninth in the country with a 6% return whilst its near southern neighbour, Elche, is estimated at 10%, and Valencia city at 5.5%.
Most towns in the southern third of the province of Valencia, on the coast and inland, are urgently in need of homes for rent, according to the now-ex regional housing minister Rubén Martínez Dalmau, meaning tenants should not be hard to find; the coastal towns in this part of the province are also in high demand for summer holiday rentals summer holiday rentals, with the price paid over a calendar month typically five to 10 times that of a year-round tenancy.
To this end, additionally, homes for rent in the province on a permanent basis, or affordable ones for the main summer months for existing residents, are also very much in demand.
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HOME prices rose faster than the national average in several of Spain's key coastal hotspots in the second quarter of this year, with the Canary Islands leading the field.
Across the country, residential property values increased by 3.3% year on year, and the figure nearly doubled off the mainland.
Latest Home Price Index (IPV) and National Statistics Institue (INE) data show that the cost of buying a house or flat in the Canaries shot up by 6.7% between April and June inclusive, based upon the same period in 2020, and in the Balearic Islands, by 5.7%.
Cantabria, on the northern coast, reported a rise of 5.3%, whilst Murcia in the south-east jumped by 4.4% and the Mediterranean region of the Comunidad Valenciana was just behind at 4.3%.
The national rise of 3.3% is the highest seen since 2019, the last 'normal' year before the pandemic reached Europe.
New builds were 6% more expensive as at the end of June and second-hand properties had gone up by 2.9%.
In Comunidad Valenciana, brand-new homes climbed in value at a slower pace than the average for Spain – 5.3% - but existing residential properties rose by well above the typical national figure of 2.9%.
For Cantabria, a similar pattern was seen – newly-built houses and apartments up by 4.3% and pre-loved homes by 5.5%, although in Murcia, both types saw above-average rises with new properties experiencing a 6.8% hike and second-hand homes valued at 4% more than in the second quarter of 2020.
This was also the case for the Canary Islands, where growth in either type of residential property price was comfortably above the national average and with very little difference between them – 6.5% for new and 6.4% for second-hand.
Price growth returns to normal after 'pandemic year' slowdown
All these regions saw greater growth in home values in the second quarter of 2021 than they did in the first quarter, and typically slightly above the mean figure for Spain as a whole.
Nationwide, home values have been rising consistently for the last 29 quarters, or since March 2014, even during the first few months of the Covid crisis.
Growth slowed somewhat in the second quarter of 2020 – after a hike of 3.2% between January and March inclusive, residential property values only rose by a national average figure of 0.9% from April to June, the lowest increase seen since spring 2013 – but since the latter end of 2020, home price recovery has been consistent.
This is particularly true of pre-owned homes – during the second quarter of 2020, these only went up in value by 0.7%, compared to 2.9% in the second quarter of 2021.
Even though the Covid crisis is still present to a greater or lesser degree, the IPV and INE figures demonstrate that the value hike in second-hand residential property in the spring of 2021 was the largest year-on-year rise in six years.
Relaxing movement restrictions helps – especially on the Costa Blanca
Alicante's Property Developers' Association, PROVIA, says reducing limitations on movement imposed as a result of the pandemic has been key in housing market recovery, since 'those who were too frightened to sign their contracts online' have now been able to 'pick up the keys to their new abode in person'.
The northern half of the Costa Blanca – as the Alicante-province coast is known in tourism circles – bounced back the most, says PROVIA secretary-general Jesualdo Ros.
Also, construction work which stopped altogether in early 2020 and was forced to slow down over the following 12 months has been almost back to normal levels since May this year, with new seafront developments now near completion in Benidorm, Dénia, San Juan, and also a few kilometres inland from the beach, in Polop.
Province-wide property developer associations say Spanish buyers led the spring recovery – those seeking holiday homes as well as those moving house – and they look forward to an ongoing increase in traveller confidence to stimulate the foreign buyer market now that the so-called 'Covid passport' has been officially released and most of the continent of Europe is very advanced in the vaccine roll-out.
Property developer associations say that although the typical foreign buyer on the Costa Blanca is a retired northern European seeking better weather, they are also seeing a slight rise in interest among younger foreign adults who work from home and want a greater level of quality of life during their time off – such as being on a sun-drenched Mediterranean coast – and who are, additionally, concerned to make sure wherever they move to is as safe as possible in Covid terms.
In fact, according to regional and national media, a recent global survey found Alicante city to be the second-most popular worldwide for people to want to move to if they were able to work from home.
Remote working was relatively rare in Spain before the pandemic, but is now very much part of the employment panorama and looks set to remain, particularly as the debate goes on at all levels, among unions, government and industry, about the need for a greater work-life balance.
This means Alicante-province residential home developers are quietly confident they will see a gradual climb in national and foreign buyers who, otherwise, would not have been able to live on the Costa Blanca until they retired.
Gandia, 'most profitable' returns on buy-to-let property
Reports in Comunidad Valenciana regional press say those who are seeking to buy a property to rent out for a regular income will get the best returns from a home in the southern Valencia-province coastal town of Gandia.
Taking into account only large towns and cities, the Levante-EMV quotes a capital return of 7.9% annually in Gandia, based upon the current prices of properties in the main urban hub or, a few kilometres away, its beach area (pictured below), and the going rate for renting, which is at present among the most affordable for a coastal enclave.
The calculations cited say an investor letting out a home in Gandia year-round would make their original outlay back in 12-and-a-half years if they bought in cash, rather than with a mortgage.
A district capital about 65 kilometres south of Valencia and around 80 kilometres south of its airport – with a direct rail link to the city, which is connected straight to the terminal by metro – Gandia has around 77,000 residents, and its coastal areas are popular with national and French tourists in particular.
Across Spain as a whole, investment return for landlords is quoted in the Levante-EMV as being around 6.7% on average, but differs widely from region to region.
Alicante city is ninth in the country with a 6% return whilst its near southern neighbour, Elche, is estimated at 10%, and Valencia city at 5.5%.
Most towns in the southern third of the province of Valencia, on the coast and inland, are urgently in need of homes for rent, according to the now-ex regional housing minister Rubén Martínez Dalmau, meaning tenants should not be hard to find; the coastal towns in this part of the province are also in high demand for summer holiday rentals summer holiday rentals, with the price paid over a calendar month typically five to 10 times that of a year-round tenancy.
To this end, additionally, homes for rent in the province on a permanent basis, or affordable ones for the main summer months for existing residents, are also very much in demand.
Related Topics
You may also be interested in ...
- Property for sale in Valencia
- Property for rent in Valencia
- Businesses & Services in Valencia
- Property for sale in Alicante / Alacant
- Property for rent in Alicante / Alacant
- Businesses & Services in Alicante / Alacant
- Property for sale in Benidorm
- Property for rent in Benidorm
- Businesses & Services in Benidorm
- Property for sale in Dénia
- Property for rent in Dénia
- Businesses & Services in Dénia
- Property for sale in San Juan de Alicante / Sant Joan d'Alacant
- Property for rent in San Juan de Alicante / Sant Joan d'Alacant
- Businesses & Services in San Juan de Alicante / Sant Joan d'Alacant
- Property for sale in Polop
- Property for rent in Polop
- Businesses & Services in Polop
- Property for sale in Elche / Elx
- Property for rent in Elche / Elx
- Businesses & Services in Elche / Elx
- Property for sale in Gandia
- Property for rent in Gandia
- Businesses & Services in Gandia
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