Housing: The Housing Market Begins to Refloat Timidly on the Coast

The report 'Costa Española 2014', prepared by the Tinsa appraisal company, in which the current state of housing on the Spanish coast is addressed, paying special attention to residential tourism, shows how the Mediterranean coast accumulates a price adjustment of 47, villas for sale in costa del sol 7% from the maximums reached in 2007 compared to 40% of the general average. The Canary Islands, on the other hand, is the community that has best weathered the real estate crisis. With all this, the study confirms that the stabilization of prices continues in the first quarter of 2014 compared to the same period of 2013. Even so, the appraiser reflects that the sale is still weak and is mainly sustained by foreign demand.

According to the report, there are areas that have begun to give the first clear signs of stabilization at the beginning of the year compared to 2013 values. This is the case of Malaga, the Levantine coast and the Catalan coast. In this sense, the smallest annual price drops have been recorded in A Coruña (-0.9%), Malaga (-1.1%), Mallorca (-3.4%), Almería (-3.8%) and Ibiza and Formentera (-3.8%). At the opposite pole, the greatest annual reductions in house prices by the sea were recorded in Lugo (-15.1%), Fuerteventura (-11.9%), Valencia (-11.8%), Huelva (- 11.4%) and Castellón (-11.2%).

Another sign that speaks positively of the brick on the coast is the timid reactivation of construction after the crisis left works half finished and slowed down ambitious urban plans and leisure projects. Some areas, such as the Alicante coastline, are registering positive developments in the numbers of new construction visas. For example, in 2013, 57% more homes were started in Alicante than in 2012. In the first quarter of 2014 this trend continues.

Sales terms exceed 12 months

The study also shows that sales terms far exceed 12 months in most locations, although little by little they begin to shorten, encouraged in most cases by aggressive price cuts by financial institutions, involuntary holders of much of the 'stock' pending sale.

The foreign client gains ground

The demand for housing on the coast generally comes from the national market, although this continues to lose ground in favor of the international one. Buyers are usually from the same autonomous community in which the property is located or from neighboring provinces, but the foreign client is gaining ground in some areas. Russians and citizens of Central and Eastern European countries have emerged as new players in the holiday home market. A buyer who is closely linked to a high-end product, mainly on the Catalan and Malaga coast.

In this sense, resident foreigners were the protagonists of more than 35% of the sale and purchase operations in the provinces of Alicante, Gerona, Balearic Islands, Santa Cruz de Tenerife, and Malaga during 2013. In addition, in the first quarter of 2014, Tarragona, with 51% of all operations, Santa Cruz de Tenerife (44%) and Malaga (38%) have been the most attractive enclaves for foreign residents. However, those who are not registered in Spain represent a much smaller quota which, according to data from the Ministry of Development, does not exceed, in the best of cases, 6% of the operations.