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  • Feb 20th, 2018
  • Comments Off on Spain’s property market recovers pre-crisis levels
Spain's real-estate market, hit hard when a bubble burst in 2008, has recovered transaction levels last seen before the economic crisis even if property prices still remain lower, official figures showed Monday. Boosted by strong economic growth, close to 465,000 property sales or purchases were recorded in 2017, "the highest annual figure since 2008," a report by Spain's national property register showed.

That represents a rise of close to 15 percent from 2016. Spain witnessed a property boom at the end of the 1990s with dizzying price rises.

From 2008, this bubble burst as a global economic crisis slowed down the Spanish economy, preventing many borrowers from paying back their property loans. Prices collapsed and only started rising again in 2014 when the Spanish recession ended.

In 2017, property prices increased an average of 7.6 percent in Spain compared to the previous year. They are still 21 percent lower than 2007 at the height of the real-estate bubble.

Strong economic growth - 3.1 percent in 2017 - has boosted the recovery of the housing market. "Low interest rates along with a declining (although still-high) unemployment rate, which declined to 17 percent in 2017 from a record 27 percent in 2013, are supporting housing affordability," ratings agency Moody's said in a statement.

"Moreover, although it is likely that housing sales will exceed 500,000 properties during 2018 for the first time in a decade, this is still far from the nearly one million of annual housing sales before 2007," it said. "Construction activity currently is at 40% of pre-crisis levels in 2007, partially correcting the oversupply in place before the crisis."

According to the register, some 13 percent of housing purchases were made by foreigners in 2017 led by British and French nationals. In some particularly touristy areas, this proportion is higher, such as in the Balearic Islands where it stands at 35 percent, or the Canary Islands, where it reaches 29 percent.

Copyright Agence France-Presse, 2018


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