Relentless Pressure on Spanish Property Market!
If you take the Spanish property market on face value, it appears quite resilient, (bullish even!), but dig a little deeper and you will find a multitude of negative burdens coming together like the perfect storm!
The most recent figures (for July) show sales growth in the Murcia Region of +7%, (up from +3% in June). We’re somewhere in the middle compared to the best growth of +57% in Las Palmas (Canaries) and 21% in the Balearics. Our nearest competitors, Costa Blanca South and Almeria, are on -3% and -9% respectively! As I say above, Murcia region is doing OK and bucking the trend on our nearest neighbours.
This time last year in my October 2018 column, I reported that most ‘reliable economists’ were predicting a worldwide recession in 2020. I still believe that is the case. The ‘relentless pressure’ I mentioned above is significant and very real!
Let’s look at those pressures individually:
Firstly and closest to home, we have the impending collapse of the Spanish government and the ensuing likelihood of a 4th general election in as many years. This will cause a problem for the banks (finance/mortgages).
Secondly, looking further outwards we have Brexit (I don’t need to elaborate on that!)
Thirdly, almost certain recession in the Eurozone.
This will be followed by Trump’s trade wars with China, sanctions on Iran, oil-producing countries coming under attack driving up the price of fuel and most of the world’s stock markets experiencing a bubble close to those in 2008 (the financial crash).
It’s almost a miracle that our region of Murcia is showing growth in property sales and a modest increase in values!
From our own experience, we predict a similar increase of around 7% in property sales in the third and possibly, fourth quarter of 2019, as the UK pound recovers its strength after the holiday period, encouraging British buyers to take the plunge and commit to realising their dream of living/retiring in Spain!
If you are considering selling your property, we, in all honesty, suggest you take the necessary steps to do so whilst the market is still buoyant and the UK pound is gathering strength.
Fuente Alamo Real Estate/Murcia Coast & Country
Tel 0034 968 598 173