While the rest of Europe is seeing a housing crash, Spain’s property market is on fire! It’s a bit of a mystery, especially with high inflation, rising interest rates, and the cost of living going through the roof. But Spain’s booming housing market is defying the odds.
Last year, Spain saw a whopping 24% increase in property sales compared to the average over the last decade. And the number of homes sold in Spain is higher than it’s been in 15 years!
This is in stark contrast to the rest of Europe. In Germany and Luxembourg, house prices have plunged by a huge 8.4% and 9.1%, respectively. Denmark’s housing market is also struggling, with prices falling by 5.6%. Even Britain has seen a slight dip of 1.4%.
Spain’s Secret Weapon – Foreigners
So what’s going on in Spain? Turns out, foreigners are driving the boom.
Firstly, the sunny weather and beautiful beaches are attracting retirees from Northern Europe who are looking for a peaceful life in the sun. And with a large number of baby boomers hitting retirement age, there’s a huge pool of potential buyers.
Secondly, Spain’s economy is doing well. Tourism is booming, unemployment is low, and people are feeling confident about the future.
But it’s not just about retirees. More and more people are choosing to work remotely, and Spain’s beautiful cities like Barcelona are becoming increasingly popular destinations for digital nomads.
Barcelona is now even competing with New York as a desirable place to live, and it’s still much cheaper than Paris!
The Good, The Bad, and the Ugly
The good news is that Spain’s housing market is flourishing. The bad news is that this boom is creating a housing crisis for Spaniards.
The problem is that the supply of homes isn’t keeping up with the demand. There’s a shortage of good-quality homes, and the building pipeline is thin.
And while the rest of Spain is thriving, some regions are being left behind. The interior of the country, known as “empty Spain,” is struggling with depopulation. Young people are moving to the cities, leaving behind villages and towns that are slowly fading away.
The Housing Crisis
The housing crisis is also being exacerbated by the “golden visa” scheme. This scheme allows foreigners to buy property in Spain and get residency. However, this scheme has been criticised for driving up prices and making it even harder for Spanish citizens to find affordable housing.
The Spanish government has responded by scrapping the “golden visa” scheme, but it’s unclear whether this will have a significant impact.
The Future of Spain’s Property Market
It’s too early to say how long Spain’s property boom will last. But one thing is clear: the housing market is becoming increasingly divided, with some areas booming while others are left behind.
The Spanish government has a lot of work to do to address the housing crisis and ensure that everyone has access to affordable housing, regardless of where they live.