The global financial crisis of 2007 remains a defining point for Spain, as well as the rest of the world, and the nation’s real estate sector has learnt some hard and valuable lessons since the property bubble popped spectacularly in 2007. Now, 12 years on, a report by the BBVA bank shows how the Spanish property market has changed since the crash.
One of the most significant changes that the report shows is the rise in rental accommodation. The Canaries lead the field here, with 27.8% of households living in rented accommodation, while the lowest figures are found in rural Spanish areas.
This switch to rental accommodation is reflected in the comparison of house prices and rents over the 12 year period since the crisis. In 2007, just before the bubble burst, Spanish property prices reached an all-time high which has not been reached again. In fact, house prices remain 21% below that 2007 peak.Read more...
Instead, it seems that those who want to speculate and make a quick buck should invest in renting rather than sales. In contrast to house prices, rents have risen since the pre-bubble boom, with tenants paying an average of 11% more in rent than they would have been doing before 2007.
The BBVA report states that, as a result of these developments, it is now comparatively easier for people to buy homes than it was during the bubble. On the other hand, those who want to rent a house face more difficulty than they did 12 years ago.
This situation has also been affected by an increasingly “two-speed” property market in Spain, with rural areas and smaller towns languishing, while larger capital cities and coastal areas popular with tourists thrive.
The advent of Airbnb and other property rental sites has also launched hundreds of thousands of holiday lets that may once have been sold or rented long-term, increasing pressure on the residential rental market.
The results can be seen outside your front door on Lanzarote, where long-tern rentals are scarce and highly sought after; where low wages mean that younger local residents still find it difficult to get on the housing ladder and where demands for political action on high rents are becoming increasingly difficult to ignore.