Comment on Property Bubble to Spanish Property Insight
There are a number of housing demands, not just one.
1. Nationals buying to live in.
2. Foreigners buying to live/holiday in.
3. Nationals and foreigners speculating short term.
4. Much smaller demand of longer term investment.
Last year has also to be looked at as a 'game of two halves'. First half strong, second half very weak. There is continued demand from Spanish occupiers due to social changes and especially availability of mortgages that weren't around before. Short-term speculative market effectively stopped. It was a false market anyway. Overhang of properties being sold off cheap by speculators bailing out will reduce prices. Also owners of other properties becoming more realistic about asking prices will appear to reduce market. Demand from abroad (especially UK) has reduced due to removal of speculators, but steady core demand of occupiers continues. Long term investment market a little more hesitant, but still there.
All-in-all, just a return to steady core demand and it has largely happened already. Will be a slow down of development as developers can't find off-plan speculators to buy off plan and they themselves (or more likely their financiers) are not prepared to build speculatively. Will be loss of jobs and some pain there, but once the overhang disappears, then steady development will continue in the right locations.
Thoughtful location will become more important again and not just putting things up wherever can find the land. The moratorium on new permissions by Junta de Andalucía while it considers and puts in place its new Regional Plan may be a convenient excuse for a slow down. Land prices are still high and may remain so as land with existing permission or likely to be favoured as a development location by the Junta will be sought after. Must go get breakfast! Campbell Ferguson's view of the Costa del Sol.