Real estate recovery in Tenerife, the Canary Isles and Spain?
It is looking hopeful that the real estate market recovery is underway in Tenerife, the Canary Isles and Spain. Indeed, the latest figures from the National Institute of Statistics indicate that the property market grew by 16% in February compared to the same month last year. According to analysts the market has touched bottom and is starting to recovery after two years of decline but the improvement is patchy and volumes are still 47% below what they were in 2007.
And the latest property price index from Tinsa shows that prices fell by 5.3% over the 12 months to the end of March, a slight improvement on the previous month. The figures from Tinsa, one of Spain’s leading appraisal companies, are however based on their own valuations not actual transaction prices.
There are no major signs of foreign property buyers returning to the Spanish market. The latest figures from the Bank of Spain shows that the amount of money invested by foreigners in Spanish property has fallen to the lowest level in a decade. Foreigners invested €3.7 billion in Spanish property last year, the lowest level since 1999, when it was €2.9 billion. Foreign investment in Spanish real estate was down 32% last year compared to 2008, and by 48% compared to 2003, when foreign investment in Spanish property peaked.
The weak economy, high unemployment and enormous inventory of new houses will slowdown any recovery in the Spanish market, according to a report from PricewaterhouseCoopers and the Urban Land Institute into European property market trends. According to another recent report from Deutsche Bank, a recovery is unlikely before 2012 and it might even be 2015 before there is an upturn.
