Many were left high and dry by the 2008 financial crash, but a legal judgment means banks could be liable
British people seeking to buy a property in the European Union should not be downhearted by the referendum decision that the UK should leave, according to overseas real estate experts.
Those who are looking to purchase a holiday home overseas, for example, are likely to see that owning a property in the EU will only be marginally more complex than it is currently, according to Andy Bridge, managing director of A Place in the Sun.
He pointed out that citizens of the United States, Canada, Russia and many other nationalities own properties throughout Europe, so while it may become slightly more complex for British buyers than currently, they are not going to be prevented from owning property in Europe.
A weak pound, plus the uncertainty about what comes next following the UK's decision to leave the European Union, will undermine British demand for property in Spain, especially in the short term, it is suggested.
This should be a concern as British demand has been growing strongly since 2013 and according to Mark Stucklin of Spanish Property Insight there could now be a reversal in that trend.
He believes that this will have a negative impact on the markets where British demand is dominant, namely Alicante and Malaga, and to a lesser extent the Balearics, the Canaries, and Murcia. ‘Thanks to this Brexit vote, there will just be fewer British buyers about,’ he said.
Residential property sales in Spain are continuing to rise but this may be due to sellers accepting lower offers as prices are falling.
The latest data from the General Council of Notaries show that sales increased by 16.2% in April year on year and in seasonally adjusted terms were up 18.9%.
But prices are not following the growth trend, down 5.1% on average to stand at €1,241 per square metre. Both houses and apartment prices are falling, down 1.6% and 5.9% respectively.
Total investment volume into European commercial real estate in the first quarter of 2016 reached €36.8 billion, some 30% lower than the same period last year, the latest research shows.
However, several European countries analysed in the report from international real estate firm Savills are seeing increasing investment activity this year. Italy with growth of 54%, Sweden up 33%, Poland up 15%, the Benelux countries up 12% and Finland up 479%, have all performed well. The report says that the data shows that investor appetite is healthy for quality assets in markets with strong fundamentals.
In terms of sectors, industrial has gained ground, increasing by around 19% year on year. This was driven mainly by transactions in the logistics and distribution sector in the UK, Germany, Sweden, Spain and the Netherlands, which accounted for more than 80% of the total activity.
Although generally the housing market in Spain is perceived as recovering well there are signs of growth slowing, according to some of the latest figures to be published.
Residential prices grew by 1.3% in May and by 1.5% in the first five months of the year, but this is lower than the 1.9% registered up until the end of April.
The data from the latest index property appraisers, Tinsa, also shows that the average price of a property in Spain is still down 41.4% since 2007.
More than 80% of properties bought in Marbella in Spain are bought by foreigners, much higher than the country’s average, new research shows.
Overall data from Spanish registrars show that 13.8% of properties are sold to overseas buyers as of the end of 2015 and of those more than 60% were from within the European Union. But the Marbella Property Market Report 2016 from Panorama Properties Marbella, a well-established estate agency, shows the area is very popular as it is regarded as a safe and high quality destination for investment.
According to Christopher Clover, the firm’s managing director, there has also been a change in where the foreign investors come from and he is predicting an influx of Iranian buyers thanks to the newly opened Iranian market.
Demand for property on the Spanish Costas has increased from expats who are benefitting from good mortgage rates and there is a rise in construction activity with a number of new developments being started, according to a new report.
It also explains that there are a number of other factors likely to affect the real estate market in the coming months including currency rates, the Spanish election and in Andalucía new rules regarding holiday lets.
Expat demand is coming from the UK, Scandinavia, and Germany with other northern Europeans also active in the market, says the report from the Survey Spain network of chartered surveyors covering the first quarter of 2016.
However, there is likely to be an increased nervousness in the market as the British referendum approaches on 23 June because of fears that the poll will support the UK leaving the European Union.
Up to 100,000 UK investors who lost money when the Spanish property market collapsed could be in line for payouts, a law firm has estimated.
It follows a Supreme Court ruling in Spain last year, telling banks to pay investors back for the deposits they put down on homes sold off-plan.
A law firm representing UK buyers has said that could amount to as much as £20,000 per investor.
Sellers in Spain are becoming more realistic about prices and have reduced asking values which is seen by experts as a good move in terms of keep in the real estate recovery going.
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