The Spanish housing market has bottomed out, the Bank of Spain has said.
"The adjustment of the real estate sector is, in principle, complete," Director of Studies JosÃ© Luis Malo de Molina has commented.
The market's recovery, though, remains complex. The Official House Price Index (OHPI) published by the National Institute of Statistics shows that prices of new homes climbed 4 per cent year-on-year, while existing home values rose 1.1 per cent. According to Tinsa, on the other hand, prices have fallen 3.6 per cent in the year to May 2015. The Ministry of Development, meanwhile, says that prices fell 0.11 per cent in the first three months of the year, the smallest dip since the housing crisis first began.
The INE index is based on sales, which means that it does not take into account unsold homes. Indeed, the country still faces a large inventory of homes waiting to find buyers.
Regional variations are therefore significant, while the market remains sensitive to external influences, based on the large number of foreign buyers. The Marbella Real Estate Market Insight 2015 Report from Knight Frank, for example, reveals an increase in sales in Marbella of 89 per cent between 2008 and 2014.
Marc Pritchard, Sales and Marketing Director of leading Spanish homebuilder Taylor Wimpey EspaÃ±a, comments: "There are pockets of real success in terms of the real estate market in Spain right now, but the picture is far from consistent. It's still a delicate market and changes in FX rates, along with international politics, are likely to play a big role in how the market is shaped going forward. Buyers are focussing on coastal areas and there is a lot of money coming into Spain from overseas as foreign purchasers look to pick up bargain homes by the sea before prices rise much higher."
Taylor Wimpey EspaÃ±a is the driving force behind a number of high profile new developments on the Costa del Sol. Avalon, located in one of the most sought after areas of Marbella, next to the prestigious Los Arqueros Golf course, is a charming residential complex with wide streets, a large communal pool and stunning golf and sea views. The luxury two and three bedroom apartments and penthouses are synonymous with the opulence for which the area is known, albeit at a more reasonable starting price of â¬310,000, in keeping with the current economic climate.
"Avalon is a great example of market forces in action," continues Pritchard. "It shows just how much you can get for your money in Spain right now and this is precisely what foreign buyers are looking for - high spec properties that they can enjoy now but that also hold the potential for future capital growth."
Domestic buyers are also helping to reinvigorate the Spanish real estate market and the combined effect of this with interest from overseas investors has led Banco de EspaÃ±a to predict growth of 4.2 per cent for residential investment over the course of this year, followed by growth of 6.6 per cent in 2016.
Pritchard adds: "Although the upturn is still patchy, we are seeing more and more areas reporting price increases as each month's figures come in. It seems reasonable that by the end of this year, if not early next year, Spain will be able to report growth in every region so far as residential property is concerned. There is still fragility within the market, but with each passing month it is looking more robust."