After two years with falls in sales of 17.8% and prices of 1.1% in 2020, the acquisition of homes in tourist municipalities is expected to recover strongly next year, according to a report by CaixaBank Research.
According to this study, the decline in sales of residences in tourist municipalities was much more intense, due to the impact of the pandemic, than in non-tourist ones and prices also fell more strongly.
The entity has used internal data on the percentage of POS spending to classify the municipalities of Spain as tourist and non-tourist. According to data for the 2020 financial year, the fall in sales in tourist municipalities was 17.8% compared to 12.4% in localities considered non-tourist. Although, according to the data collected by the report, the recovery during 2021 is being smoother in tourist municipalities.
As an example, the study compares Benidorm (where spending with foreign cards represented 33% of the total in 2019) with Alcoy (1% spending with foreign cards). Thus, sales decreased by 37.3% in Benidorm in 2020, compared to an increase of 7.1% in Alcoy.
The recovery this year will be smooth, with an increase in residential prices in tourist municipalities of 0.5%
This can be seen in the prices. Since, specifically, the average price in tourist municipalities went from increasing by 7.5% in 2019 to falling by 1.1% in 2020. The slowdown in non-tourist municipalities was also notable, but less intense: the price Average housing went from advancing 7.1% in 2019 to 1.6% in 2020.
Returning to the example from before, house prices in Benidorm went from rising 7% in 2019 to falling 3.1% in 2020. In Alcoy, on the other hand, residential prices increased 3% in 2019 and continued to rise until 4.5% in 2020.
The CaixaBank model forecasts predict in 2021 an average increase in house price of 0.5% in tourist municipalities and a higher increase (0.9%) in tourist municipalities. In addition, according to the report, these forecasts are more moderate than those shown by the model before the pandemic, when increases of around 2% per year were expected.
CaixaBank is sure that there is a “dammed demand” and highlights that it is also suggested by Google searches
The financial institution’s research service highlights that foreigners, despite the pandemic, bought 47,500 homes in Spain in 2020 (11.3% of all sales), a figure similar to that of 2015 and much higher than the average of 2008-2015 (28,000 homes), which shows that their interest in buying a residence in our country has not diminished.
Finally, CaixaBank expects international demand to recover strongly next year, “even higher than that observed before Covi-19”. In addition to the set of factors that make the Spanish residential market attractive, it provides one that has emerged as a result of the pandemic: the possibility of developing professional work remotely thanks to teleworking.
