Spanish new builds experience price drop
News by Propertyshowrooms.com
In what is known as a highly saturated market, it will not come as a surprise that new build property prices in Spain are continuing to fall. A report from the Sociedad de Tasacion, Spain’s equivalent to the Royal Institution of Chartered Surveyors, revealed that in 2012 prices for new homes dropped by an average of 67.9 per cent.
This figure is the reflection of data collected from developers across the country and, while good news for those considering investing in Spanish real estate, will not be welcomed by developers. The average cost of a new build now stands at just over €2,200 (£1,806 approximately). This means that a standard 90 square metre property fetches just £161,000.
However, the Sociedad de Tasacion is positive about the price drop, which will continue this year. Their report claims that lower prices will open up the market to “international investment groups”. This means that despite now standing 33.5 per cent lower than the values enjoyed during Spain’s property boom in 2007, the low cost of new builds could become an asset.
Increasing overseas interest in Spanish property has long been identified as integral to the country’s recovery. In a bid to encourage foreign investment the government is planning the introduction of a residency scheme, which will offer a residency permit to non-EU residents that purchase property over €160,000 (£131,360).
With a standard new build costing somewhere in this region, it will not be surprising to see a rise in demand for such properties from overseas investors in the future. However, with prime developments much sought after, other areas of the market are likely to fall. With competition fierce for high-specification real estate, Spain may be faced with a wealth of vacant mid-range and low-range property. The country already has an oversupply of residential units – including distressed assets held by the Bad Bank – and until such properties are cleared off the books, any form of recovery will be difficult. International Property and Real Estate News from Propertyshowrooms.com
2013-01-15 17:02:18
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