I am writing this article in the midst of the Covid-19 pandemic, in unprecedented times.
Spain, together with Italy, has been one of the hardest countries hit and went in full lockdown on the 15th of March. On May 10th, barring any further extensions to the state of alarm, Spain will start transitioning back to what many hope will be something similar to the life they had before.
Being active in the real estate business over the last 10 years, Ana, from the AIGroup, asked me how I would view the development of the Spanish real estate market looking forward.
The crisis will have a dramatic short-term effect, for sure and recovery will take a while, but as a mid-term effect, interest rates will remain low and people may be more aware of the fact they have to enjoy life. Spain is a quality destination for many home buyers and once the emergency has passed, no matter when, it will remain a top attraction for foreign buyers. Especially if summer sees a reduction in virus numbers as it does with similar viruses, Spain may become more popular than before, because it will be seen as less risky. Disasters on this scale make people reassess their lives and make decisions to do what they have dreamt of doing.
But of course, health issues and travelling are still to be solved, as well as how this will affect people´s financial possibilities and power to invest. I think there will be absolutely good opportunities for bargains, when some have to sell, but overall, I don´t think prices will drop more than between the 10% and 20% on average. As mentioned before, the travel market and the state of the airlines will have an impact on how quickly the foreigners react and resume interest.
I think that now especially, people will favor independent properties over properties with shared entrances and lifts. People also will realize being locked down in a home with a garden in a great climate is better than more Northerly countries, which are more densely populated too. Comparing the Spanish housing market pre-2008 financial meltdown with the current housing market, it is in a much better shape, less construction, less leverage banks, wealthier healthier clients etcera. The virus will affect everyone but Spain has a wonderful climate and many other positives. It will always be popular with buyers once the world returns to normal.
In conclusion. One thing this epidemic has taught us is live your life now, enjoy your time on this planet as events can change and the Costa del Sol (Spain) is a great and convenient place to practice this important lesson