Many matters influence the timing of a foreign property purchase. But it looks like the factors are in favour of buying in Spain.
Let’s look at the evidence. Spanish house prices have reduced dramatically and the value of the euro to the pound has dropped significantly too. We’re seeing a reduction in fuel prices, lowering the cost of airfares, and more tourists choosing Spain as their holiday destination.
Even the cost of borrowing is down, meaning that if you do need a mortgage in Spain there is a much better chance now than for many years previously.
So, is it a good time to buy property in Spain? According to Abaco Advisers, Spanish legal and tax advisers, the short answer is ‘yes’ and here, in more detail, is why.
Good value property. It’s no secret that house prices in Spain dropped sharply from 2008 onwards. Too many houses on the market plus not enough buyers tends to equal a very good bargain.
Although there is more optimism in the sector at the moment, there is still lots of property to shift and people who do want to make their Spanish dream happen are in a very good position to do so.
The trend seems to be for second hand property, although the way that figures are collated in Spain means that brand new, unoccupied houses over two years old are still classed as second hand.
A weak euro. It might not sound an attractive prospect in itself but a weak euro means a good exchange rate for those countries still with their own currency.
There are a number of factors that mean the euro is currently not as strong as it has been against the pound. The Greek election results have certainly caused some ripples. Although it was projected that Syriza would win, they weren’t perhaps expected to gain the amount of support that they did.
But the euro had been struggling against the pound prior to this as a result of a combination of factors. The European Central Bank injected upwards of 1.1 trillion euros into the eurozone economy with the result that investment has tended towards sterling and US dollars.
The pound has been doing well against other currencies too. For example there have been improvements in the ratio of the kroner to pound. If you were thinking of buying a house in Florida, however, this might not be such a good idea. The dollar is still strong against the pound and you can expect less for your money over there if you’re trading in sterling.
Price of fuel. Another positive for those wanting to enjoy more of the Spanish lifestyle, is the fall in fuel prices. Cheaper flights also make buying in Spain more attractive.
Ease of access is a powerful incentive for choosing Spain above other destinations. As travel costs mount from A to B in your home country, compare the cost of a two-hour flight that takes you to the sun. Tour operators are anticipating a bumper tourist year this year with fares to Spain reduced and holiday packages particularly good value.
Improved access to mortgages. Some people are in the fortunate position of being able to afford a house outright but most people do need a helping hand. The central statistics unit suggests that mortgage lending by banks is on the up. It was reported that in November 2014 15,900 mortgage loans were granted, an increase of 14.2% on the same month the year before.
One of the factors making mortgages more attractive is the low level of interest being charged. The Euribor dictates the interest rate of most Spanish mortgages. Currently, it is at a very low level with the average rate being around 3.49% as opposed to 4.29% of the year before.