Good news from Spanish real estate is not often heard these days , however some Spanish regions are doing well with house prices on the up! Valuation company Tinsa has reported that the Balearic and Canary Islands are the only regions in Spain where house prices went up in April over the previous year Ã¢â¬â an increase of 3.3% versus an average 10.5% decline for the rest of the country. This corroborates earlier predictions from Balearics SothebyÃ¢â¬â¢s International Realty.
Daniel Chavarria Waschke, Managing Director of Balearics SothebyÃ¢â¬â¢s International Realty with offices in Mallorca and Ibiza, says, Ã¢â¬ÅThis is consistent with the market predictions we posted in January this year when we stated that we had started 2013 with a real sense of positivity. We made reference to the fact that Ibiza had its recovery in 2012, way ahead of the mainland, and was already Ã¢â¬Ëbooming outÃ¢â¬â¢ again. Meanwhile we said that demand for holiday homes in Mallorca had remained high throughout the Ã¢â¬ËcrisisÃ¢â¬â¢ largely due to the mix of nationalities involved, with more than 80% of buyers non-Spanish. We believed that at the top end, the worst was over for Mallorca and recovery would accelerate in 2013. Our crystal ball appears to be spot on with AprilÃ¢â¬â¢s 3.3% house price increase reflecting that recovery. Long may it continue.Ã¢â¬Â
Spain has had a rather tumultuous few years with Tinsa calculating overall house price falls at 37.2% from peak values in December 2007 when the bubble burst. The mainland Mediterranean coastline is home to the highest falls at 45.1% and the capital and major cities with populations greater than 50,000 next at 40.4%. The Balearic and Canary Islands prop up the table with falls of Ã¢â¬ËjustÃ¢â¬â¢ 24.5% from the peak, with a positive turnaround now on the cards. Spain cannot be judged as a whole, but the sum of its parts.
Daniel continues, Ã¢â¬ÅNot only is it unfair to judge Spain as a whole, Mallorca and Ibiza enjoy very different qualities to the mainland, but it is also important to consider that Tinsa values all properties for sale, and that includes small apartments with no views or homes in less exclusive areas of the Islands. Our business focuses entirely on the luxury end of the market and I suspect if we were to carry out the same exercise, the Ã¢â¬Ëpeak to bottomÃ¢â¬â¢ price falls would come out a lot lower than TinsaÃ¢â¬â¢s across the board 24.5%.Ã¢â¬Â
Market recovery may well be accelerated by Prime Minister Mariano RajoyÃ¢â¬â¢s statement of intent to offer indefinite residency to foreigners purchasing a home priced in excess of 500,000 euros, significantly higher than the 160,000 euros first suggested back in November 2012. A more detailed draft of the proposal is expected by the summer but there has already been strong interest from China and Russia, nations keen to access one of SpainÃ¢â¬â¢s millions of empty homes in return for lucrative residence.
This 500,000 euro threshold plays into SothebyÃ¢â¬â¢s International RealtyÃ¢â¬â¢s hands as in Mallorca, the Company focuses exclusively on villas priced above two million euros and apartments above half a million euros, whilst in Ibiza the bar is set at villas above one and a half million euros and apartments above one million. However Daniel is unconvinced that the floodgates will open.