Expat house purchases drive growth in the Spanish property market

Following the release of figures by the Property Registrars in Spain last week, property prices in Spain grew by 1.15% in the third quarter of 2014, while the number of properties being bought rose by 1.4% to 79,561.

With property sales and prices beginning to rise, the impact of foreign investment may be providing the driving force as people look to buy before prices start to increase over the next few years.

Property purchases made by foreign buyers has hit a high of 13.1% of the market share, up by 19% this year, and 23% compared to the same time last year.

British buyers are leading the way, accounting for 1,886 properties representing 18% of foreign purchases, while French, German and Russian buyers accounted for a total of 27%.

Speaking to Property Wire, real estate expert Mark Stucklin believes that the market could be turning. “For the last year or more it has been possible to buy new property in Spain for less than it costs to build, thanks to a housing bust that has forced banks to take over thousands of new developments, and repossess hundreds of thousands of new or recently built homes. Such low prices are a once in a cycle situation that will not be repeated again, at least not until the next boom and bust, which could take decades” he explained.

He believes that banks are “so bad at selling” that they are offering significant discounts and with a surplus of houses on the market and building firms holding back on creating new properties, we may never see such low house prices in Spain again.