The first half of last year was marked by the strong impact that the Covid pandemic had on the real estate business, on the other hand, the first half of 2021 has brought better news. According to a study prepared by Lucas Fox, in Spain there is a sustained recovery in both sales and prices and mortgage loans, returning to levels recorded before the pandemic.
“Part of this year’s remarkable recovery was driven in part by last year’s ‘hangover’, when many people were unable to buy homes, a factor that over time is expected to decrease in weight. Even so, the recovery is being more effective than expected in the darkest months of the first half of 2020, “they said from Lucas Fox.
The Spanish luxury real estate market seems to be benefiting from the pandemic, as this market offers many benefits to those looking to buy a home in an environment adapted to new demands: the climate is one of the best in Europe, it has good infrastructures, offers a very high quality of life and a large stock of exclusive homes. For this reason, the country becomes an ideal option for this type of international buyer, and much more as restrictions are lifted and there is progress with vaccination levels in all countries.
Transactions
According to data from the College of Notaries of Spain, in 2020 were sold 490.113 homes; that is, a decrease of 14.6% compared to 2019. In order to better understand these data, it is enough to say that the economic crisis produced a greater impact with respect to sales, with a drop of 34% in 2008. In other words, the coronavirus it has been less negative for the market than the real estate crisis of 15 years ago. “Obviously, the pandemic has had a negative effect on the market, but it has recovered much faster,” says the consultancy.
On the other hand, they claim to have witnessed the increase in transactions between the months of April and May compared to the months of lockdown. We are talking about an increase of 234% and 125% respectively. In addition, sales increased 8% compared to 2019. Sales were also 6% higher than 2018.
Where are the buyers from?
For decades, foreign buyers have been an important part of the Spanish luxury real estate market, especially in the coast areas. According to figures from the Association of Property Registrars of Spain, foreign buyers accounted for 13% of the market in 2018, a figure that fell to 11% due to the covid.
The Covid crisis caused a 25% drop in foreign demand last year, while the drop in domestic demand was less: 17%. This caused a decrease in foreign market share. Although on the other hand, last year foreign buyers were behind 50.000 transactions, which shows their interest in the Spanish real estate market.
It is logical that the pandemic affected foreign demand more than national demand due to the mobility restrictions that have existed. On the other hand, now foreign demand is at 83% of precovid levels, therefore it is expected to continue increasing as mobility restrictions are lifted.
If we look at the data by country, we can see that there have not been many changes. Despite the entry into force of Brexit, British buyers remained the most important group during the first quarter of 2021, followed by the French and Germans.
The two most important markets for obtaining the “Golden Visa” (the residence permit for those who buy a property in Spain) are China and Russia, which have been the two most affected by the pandemic due to mobility restrictions. In the first quarter of 2021, Chinese demand fell by 58% and Russian by 32%, figures that we can compare with the global drop in foreign demand, which has been 18%.
