Home-building, buoyed by foreign investment, is thriving in Spain 10 years after a property bubble burst, and the new Socialist government is now looking to rein in some areas of the market
Home prices in Spain, which plummeted after the market crash in 2008, started to recover about three years ago in most areas. At the end of 2017, prices were up 7.2 percent since they hit bottom in 2015, although they are still 37.2 percent below their 2007 peak, according to a report from Tinsa, an appraisal company.
The Spanish resort city of Palma, on the island of Majorca, is to ban flat owners from renting their apartments to travellers, becoming the first place in Spain to introduce such a measure.
The real estate sector in Spain continues to attract investors' appetites, remaining for the third consecutive year above the volume of 9.9 billion euros. To the traditional investment in retail and offices, logistics and hotel assets are maintained upwards thanks to the boost of 'e-commerce' and tourism. 2017 concluded with a direct investment of 10,400 million, according to BNP Paribas Real Estate.
The uncertainty about the process of independence in Catalonia since 1-O hardly affected the tsunami of investment in the real estate market in Spain. The figure increased by 45% in one year - with special emphasis on retail, hotels, logistics and residential- and even surpasses the data of acquisitions of the past decade, before the real estate crash.
Well situated in the heart of the Mediterranean, Majorca has been visited by a record-breaking number of tourists in the last three years, partly because terrorism and political unrest have made destinations in Turkey and northern Africa less desirable, said Mark Harvey, a partner in the international residential team at Knight Frank. At the same time, the market for vacation homes has soared, outpacing the market on mainland Spain.
Spain has suffered a long period of economic uncertainty over the last nine years, but research has shown the country’s economy is bouncing back, with levels of gross domestic product set to exceed that of pre-2008.
There are almost two-and-a-half times as many UK citizens living in Spain as Spanish citizens resident in the UK.
After years of legal wrangling and setbacks, British homebuyers who were caught cold by the Spanish property market crash are finally beginning to recoup the millions they paid for holiday homes that were never built.
Demand from Britons for holiday homes in Spain and Greece has fallen sharply as Brexit uncertainty and the fall in sterling drive house hunters away
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