Review of the Spanish property market during 2020

Good bye 2020

Looking back at the months leading up to the March lockdown, it appeared as though we were recovering from a somewhat challenging 2019.

After a peak in 2017 and 2018, the property market seemed to have flattened out at the start of 2019, leading many to believe that a period of recession was imminent. It was only after the summer that the situation began to improve again, and by the end of the year, fears of a recession seemed to have vanished as requests for properties along the Costa Blanca began to rise again.

2020 – a somewhat different year

Up and down movements are a normal part of life and have been with us for a long time, but what we have experienced this year is completely new. Without wars or natural disasters, it is hard to imagine a non-economic factor having such an impact. The year 2020 had started with strong demand and a revival of the market until the Corona crisis brought us all to a standstill.

This measure led to a near complete standstill for many industries, and although real estate professionals showed themselves to be incredibly adaptable, they had to suspend their regular business for almost three months. In many parts of the world, there is talk of the “lost four months”, but as harsh as it sounds, if it stays at those four months, we will bounce back.

A remarkably soft landing

The crisis has and will continue to have a strong economic impact for a while, but when we exited the lockdown in Spain in June, we discovered that our worst fears were not confirmed. Social distancing and strict restrictions delayed the full return to business, but after almost three months of mostly lost activity, the market then picked up surprisingly quick.

Tourists slowly came back to the Spanish coasts, where both local and international companies resumed their activities. What did not happen, however, was a free fall in demand and prices. In fact, most estate agents along the coast report many enquiries and viewings, and in general the market has been surprisingly stable and vibrant.

It becomes clear how important modern technologies such as virtual tours. Presentations through 360-degree images and online viewings have become. Communications via Zoom and What’s App have become an integral part of estate agent activity.

Interest is coming from all over the world, with the Covid 19 situation resulting in more, not fewer, people wanting to own property in Spain to spend part or all of the year. According to customer surveys, Spain is perceived as attractive because of its safety, high standard of living, weather, and excellent public education and health systems.

Price development

The trend we experienced is reflected in official figures. Some feared property prices would free-fall after the lockdown, but given the official figures released by TINSA, Spain’s statistics office, nothing could be further from the truth. Compared to this time in 2019, property prices are actually 1.1% higher across Spain and only 0.3% lower in coastal areas. This shows that the second home market is slightly more vulnerable in such a situation than the first home market, but overall demand remains solid.

All in all, given the strange situation we found ourselves in, the property market along the Spanish coast has recovered strongly and actually seems to be experiencing a second upswing based on the continued demand for the Spanish way of life.

Contact the team at Unic Villas for more information on real estate and lifestyle options along the Marina Baixa.