The Costa Blanca leads the way but property supply still exceeds demand
Despite a widespread feeling among real estate professionals that the residential property market in Spain is at last beginning to bottom out after six and a half years of falling sales and plummeting prices, an extended paper published by leading valuation firm Tinsa suggests that the downward spiral is not over yet on the coast of the region of Valencia.
In the provinces of Castellón (Costa del Azahar) and Valencia, Tinsa reports price falls of 11% between March 2013 and March 2014, and while the drop of 6% in Alicante (Costa Blanca) is more promising there is still an accumulated decrease of over 43% in the province since 2007. The equivalent decreases are 46% in Castellón and 48% in the province of Valencia.
Within the Costa Blanca, there are at least some encouraging signs detected by Tinsa. The interest of British and Scandinavian buyers is stimulating activity at the lower end of the market, while the Russians are moving in on higher-priced homes in Altea, Moraira, Javea and Finestrat, and progress is being made in shifting the stock of unsold properties throughout the area. 52% of buyers in the coastal areas of the province of Alicante are reported to be non-Spaniards.
Construction is reported to be recovering between Campello and Santa Pola, and further south in Orihuela, Guardamar, Torrevieja and Pilar de la Horadada the demand from northern Europeans is slowly eating into the pool of unsold new-builds. However, supply still exceeds demand, and bank resales are pulling the market down: in Torrevieja prices are reported to have dropped by 8.8% in the last twelve months and 46% since the highs of 2007, and while the year-on-year comparison shows decreases of only 4.3% in Orihuela and 5.6% in Guardamar in these two municipalities properties have lost 45% and 37% respectively of their value since the bubble burst over six years ago.
In many parts of the region prices have now fallen by over 50% since 2007: the most extreme case reported by Tinsa is that of Puçol, in the province of Valencia, where after a fall of 14.2% over the last year the average price per square metre is now 56.3% lower than at the end of 2007. In Casares, in the Andalucía province of Málaga, property prices are reported to have dropped by 59.7% since they reached their peak.
As in other parts of the Mediterranean, the main problem for the property market remains the stock of unsold completed properties. In 2013 Tinsa reports just 3,521 new-build sales, 39% fewer than in 2012, while 23,223 second-hand properties changed hands over the same period.
Image: Torrevieja coastal property. Copyright Valencia Today
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