Spain is getting out of the economic crisis with more unemployment and less production capabilities. The real estate market virtually collapsed and is only since 2015 slowly re-emerging.
The subsequent credit crunch of the boom years triggered a deleveraging well described by Ray Dalio and triggered some structural reforms including labour laws.
Since 2015 the measures taken by the government and the recapitalization efforts of the banking industry with massive mergers of the savings banks and write downs of the commercial banks are showing first effects. With historically low refinancing rates and competitive labour economic growth came back.
The first signs of a recovery of the real estate market can be sensed. Banks are cautiously advertising mortgages, institutional buyers are searching for deals and the international real estate capital market is focussed on Spain.
The coast had another story. Mainly Scandinavian buyers reappeared in 2011 and are still the dominant buyer especially in the Costa del Sol. Financing is for these buyers is available in contrast to the still closed Spanish second home market.
We expect for 2016 – 2018 a gradual return of liquidity to the Spanish real estate market. In the light of slow global growth and uncertain returns from liquid financial assets the old brick and mortar appeal is returning.
Driven by excellent infrastructure and security Spanish coastal real estate is perceived as attractive by many potential buyers. The main obstacle to overcome is the still insuffient liquidity and the restrictive credit policy of banks – even for solvent buyers.