End of Year Market Overview Spain
Mallorca, December 2009
Engel & Völkers, the leading international agents specialising in the quality first and second home market sector with 54 offices in Mainland Spain, the Balearics, the Canaries and Andorra, has experienced its toughest year since entering the Spanish residential market in 1999 with a much needed Autumn surge of viewings and sales.
In Spain, the majority of European buyers tend to be German, Swiss, British, French, Scandinavian and Spanish even though the British market, for the moment, seems to have fallen away. Only realistically priced property for the current market conditions is attracting interest and there is still a great deal of negotiation to close sales. However, after a year of price reductions of approximately 15-30%, prices have now stopped falling and the market appears more stable than at the beginning of the year.
Engel & Völkers has opened eight new offices during 2009 in Barcelona (2), Costa Brava (3), Costa Blanca, Andorra and Tenerife. The Costa Brava has performed well this year considering the difficult market conditions especially in the Baix Empordŕ area which is attracting Spanish, French, Scandinavian, British and Dutch buyers. There, average sale prices are over €1 million in this area for rustic properties “masia” or properties with sea front locations.
Says Marcus von Busse, Managing Director Engel & Völkers for the Spanish Mainland, Canaries, Andorra and Portugal; “Although there is always room for negotiation, we have seen that prices have stopped falling particularly in areas worst hit such as the Costa del Sol where prices fell by up to 30%.
Now more than ever only properties that are correctly priced and in good locations continue to attract buyers. We are also seeing signs of a recovery in the UK market. This will have a positive impact on the Spanish market in 2010.”
In the Balearics, overall sales of second home holiday residences have dropped by approximately 35% in the last year. However, on Mallorca there has been increased movement in the past two months, specifically from German speaking clients who currently represent over 50% of the buyers. Demand is focused on prime located, quality property, which is reflected in the fact that the average sale price in the past 12 months is just under €1 million.
Says Daniel Chavarria spokesperson for E&V Mallorca; “Many potential buyers are looking for bargains and those owners that need to sell have reduced prices by approximately 15-25% depending on the property and location. However, at least half of our owners will stick to their asking prices.
Some owners have taken their homes off the market completely and are waiting for market recovery and others are more likely to consider renting out their homes to pay the expenses of maintenance etc… and get some return on their property”.
