After the property market improves in the big cities, the recovery begins to hit the coast
Property prices in the Costa Brava are beginning to recover across the board
After observing the property market and prices recover in major Spanish cities like Madrid and Barcelona to near pre-crisis levels, now homes along the Spanish coast are beginning to benefit from the recovery.
In general, and taking into account the 2017 report of housing on the coast carried out by TINSA, two-thirds of areas defined by the property market continue to evolve favourably. In other words, they are areas where prices have already hit bottom or continue to show a clear increase in price.
– Areas in recovery: Canary Islands, Guipuizcoa, Costa Gaditana, Pontevedra, Asturias
– Areas where prices are dropping: Provinces of Girona, Tarragona, Castellón, southern area of Barcelona and Valencia.
– Areas where prices continue to adjust: Atlantic and Cantabrian coasts, Coast of Granada and the coast of Almeria.
It can be seen that in the area of Costa Brava, the market has more or less bottomed out and is close to entering the recovery phase, although very different situations can be observed across Costa Brava. There are municipalities where the level of sales has increases, while others are still in the adjustment phase. For example, the Castell-Platja d’aro area (where S’Agaró is located) is the fourth most populated coastal area, yet the one to see the highest increase in price of all coastal areas in Spain when compared to the first quarter of 2016.
The stock level of new holiday homes is still very low. There is very little production occurring in the construction of new properties, with most holiday homes sold being previously owned and occupied. There is a noticeable reduction in the amount of sales, which has had a noticeable impact on the market and prices.
The rental market is less relevant than the buying one, focused more on basic and medium-quality apartments. The more exclusive the area, the less important the rental market has. This is the case in areas like Cadaqués, Begur, Llafranc or S’Agaró. There is now new construction activity along the Costa Brava, except for very specific areas like Begur, Aro Beach and Palamós. Construction at Ardo Beach includes properties with unspoiled sea views, multi-family occupancy and floor-plans with less than 100 metres squared. In Palamós, there’s more planned construction of multi-family dwellings with limited square footage.
This demand in the market means that the once preferential foreign property buyer from elsewhere in the European Union and countries in the east have fallen behind the national buyer, coming mainly from cities like Barcelona.
When it comes to luxury homes on the Costa Brava, it should be remembered that this type of asset resists cycles quite a lot. In the same way this type of asset did not see excessive decreases in value during the financial crisis, neither will it yield significant increases in prices and, when it does, it will only do so later than the property in other segments of the market.