Five marvellous years ahead for Spanish property, expert predicts

“We are on the threshold of the best time to buy a home in Spain” – these were the encouraging words spoken by an eminent Spanish real estate expert last week as data, trends and confidence all converge to form a five-year golden period for property…

As economics professor and director of the real estate programme at the University of Barcelona, Gonzalo Bernardos is better placed than most to make an informed prediction on the future health of the Spanish property market.

And Bernardos’ bullishness is likely to be music to the ears of thousands interested in buying a property in Spain, coming at a time when the uncertainty created by Brexit threatened to puncture the optimism that has shaped the real estate market these past three years.

According to Bernados, this year – 2016 – will mark the first of a five-year expansion “in which the trend of every property asset is towards price increases”. Property insight expert Mark Stucklin took this to mean that Spanish property is a “one-way bet” for the next five years, especially in the country’s more popular areas such as Barcelona, Madrid, Ibiza, Marbella and “other hotspots’, which is likely to include the bulk of the Costa del Sol.

So what is driving the professor’s confidence? Bernados added that Spain’s current low interest rates are making property in the country particularly attractive, and with the economy strengthening by the minute, a perfect storm is gathering.

“The residential market is once again a refuge for investors, and the key to everything is low interest rates,” he said. These low rates are making monthly mortgage payments far more affordable than average rental prices, and with Spain facing at least five years of stability and growth – with job security likely to increase – it makes sense to begin buying rather than renting, he explained.

“After the dangerous decade between 2006 to 2015, will come five marvellous years,” predicted Bernardos. “Investor interest and strong economic growth will finish off the hangover and carry the real estate market to a new period of growth.”

Decisive words indeed, with Bernardos equally confident that any international economic shocks will be “compensated for by an increase in Spanish household spending and company investment, especially in construction.”

And for any onlookers worried that this all sounds faintly familiar to a decade ago, Bernardos moved to reassure those who had their fingers burnt last time by stressing that this new property market will have no room for speculators.

“If speculative demand does reappear,” he added, “it will be very reduced and limited to certain areas of the big cities. Banks will give far less credit for speculating with.”