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Property buyers

What will happen to the real estate market during the last months of the year?

This year, growth of the residential real estate sector has eased slightly. However, the growth previsions for the Spanish economy are of 2.3%, according to the International Monetary Fund (IMF). 

This forecast means both investors and private buyers can consider what's left of the year to be a good moment to acquire a property.

We at Property Buyers are going to analyse the eight trends that are going to mark the property market over the last few months of 2019.

Fixed-rate mortgages 

The Euribor rate is at historical lows. However, experts expect it to start to rise.

For that reason, 41% of all new mortgages taken out over the first quarter of the year were fixed-rate ones.

This trend will continue during the final months of the year, as 64% of future buyers are sure they will go for a fixed-rate mortgage, according to a study carried out by Casaktua.

Buyer's solvency studies before giving mortgages

This year saw the arrival of the new Mortgage Law, which requires more information for the consumer, reduces costs for the borrower, removes floor clauses, makes the notary a great ally for the buyer, lowers commissions...

But, it also obliges the bank by law to thoroughly check the buyer's solvency. This will make it harder for people with lower incomes to obtain a mortgage to finance the purchase of their property. 

Rental prices skyrocket 

In the past, the most outrageous rental prices were located in the most central neighbourhoods.

However, the Banco de España reported that not only have prices increased in the centre, the same can be said for the peripheral neighbourhoods and adjacent cities as well as lower income areas. 

Investment in property increases 

Although we're experiencing a moment of political uncertainty and are awaiting regulation of rentals and tourist rentals, gross returns are still positive (between 4% and 7.5%), according to the Banco de España.

This means that both foreign and national investment continues to grow. 

Demand for first homes is starting to recover

The demand for first homes is recovering thanks to the creation of youth employment, which reduces volatility, 

However, the purchase capacity of salaries is not growing, which maintains the difficulty of accessing property.

Increase in new development transactions 

Second hand property is still vital for the real estate market, but new developments are starting to gain popularity.

According to data provided by the National Statistics Institute, new development property sales increased by 7.4% between January and June, while second hand property sales fell by 1.6%. 

The previsions say 15% of the Spaniards with an intention of buying a home are starting to look for new development properties. 

Purchases of coastal properties by foreign buyers will continue to increase

The number of properties purchased by foreigners has increased 7%. 

The Spanish real estate market mainly attracts buyers from the UK, France and Germany, and it will continue to do so.

The coastal locations are the most popular:  Alicante, Tenerife, Málaga, Baleares, Girona, Las Palmas, Murcia, Almería, Tarragona and Castellón.

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