Reports indicate that property prices in Spain could increase by as much as 5% in 2018, thanks to rapidly increasing demand that has been buoyed by booming tourism in the nation that has become the most popular holiday destination in Europe.
Spain has now enjoyed its sixth year of record-breaking visitor numbers and its property markets in tourist hotspot areas is seeing the significant benefits..
The news comes after Solvia, the property division of Sabadell bank, forecast average increase in house prices of 7.3% across the country by 2020, whereas Bankinter predicts a 5% increase in 2018 alone.
Regions with the strongest demand and economies such as Catalonia and Madrid are likely to see the biggest rises and the Solvia forecast suggests increases of 11% and 14% respectively.
It added that sales are likely to be strongest in Barcelona, Madrid, Sevilla, Malaga and Alicante, where demand continues to be high.
According to news reports, the popular vacation island of Ibiza has seen such a rise in demand for property and transactions are being completed so rapidly that they are struggling to cope. “Demand for high end residences on Ibiza remains significantly higher than the supply available,” said Florian Fischer, managing partner of Engel & Völkers on Ibiza.
The report reveals that Germans top the group of overseas buyers, followed by the traditional British, French, Swiss and Italian buyers and comes after Spain smashed all previous records for tourism number once again in 2017.
Spain remains one of the most popular destinations in Europe for Britons planning their summer getaways. Increasing numbers of tourists have flocked to the country over the last two years, as security concerns saw popular summer destinations like Tunisia, Egypt and Turkey fall out of favour with sun-seekers.
The first half of 2017 saw as 12%, with more than 36.4 million tourists arriving in Spain, despite British tourism giant TUI Group urging travellers to consider other destinations to prevent overbooking or constricted supply of holiday accommodation in Spanish tourist zones.
At a press conference following TUI Group’s third-quarter fiscal results, the company’s Chief Executive Fritz Joussen said: “Spain is pretty full. Last year we had an all-time high and this year we will be on similar levels.”
According to Mr Joussen, while most Spanish citizens are pleased with the rising numbers of tourists, the high demand has caused prices in the country to rocket. He said: “If demand is very high, prices are high and other destinations build because they are more affordable and that is what is happening right now.”