The Bank of Spain says the real estate crisis is over

The Bank of Spain says the real estate crisis is over. After the global financial crisis of 2008 took root, the economy of Spain went into sharp recession and for much of the intervening years the recovery has been slow and painful. During the previous decade the construction industry had been booming, and high demand driven further by easy credit availability led to the creation of a bubble that finally burst in 2008. Since then prices have corrected themselves, falling in some areas by as much as 50%, yet the first areas to recover were Mallorca, Ibiza and Marbella, and as the Spanish economy begins to consolidate new growth this revival is beginning to be felt across the country.

Some areas still haven’t bottomed out quite yet, but for most of Spain the real estate sector is poised for improvement. In the aforementioned areas, as well as Madrid, Barcelona, Málaga and parts of the north this process is already well under way, with foreign investment now being joined by a gradual revival in domestic demand.

Indeed, according to the Bank of Spain, 2015 will show a significant increase of 2.8% in the overall economy, more than double that of last year’s growth. Foreign investors are showing trust in and an appetite for Spanish real estate once more, and reinvesting in both commercial and residential assets. Most parties no longer speak of booms but of solid, sustainable growth, and it seems lessons have been learnt with definite signs of renewed trust and investment in the country.

Figures show that house prices in Marbella town and surroundings areas have largely stabilised and are set to begin a gradual upward movement, although it will take a while before they are back to pre-crisis figures and banks, are beginning to offer mortgages once more. The banks are also re-investing in uncompleted residential developments and commercial building projects, which creates both much-needed jobs and attracts new investors.

Improvements in the real estate market are also reflected in the dropping unemployment level, with projections of continued growth in employment opportunities. Although much of Spain has been in ‘negative equity’ with regards to property for the past seven years, 2015 looks like it will be the year that those negative figures become positive again, and the rest of the country joins the likes of Marbella, where the property market has made a full recovery to solid growth and the future prospects are positive.

Please feel free to contact us with any queries about real estate in the Marbella area, real estate crisis is over contact us to sell, rent or buy your property and find out why we are the Marbella and Golden Mile specialists.