Spain's unemployment rate increased from 8% in 2008 to just short of 27% by January 2013. However, unemployment has dropped by around 6% since then and the Spanish economy has added 575,000 new jobs over the past 12 months as the economic recovery has gained momentum. Spanish GDP expanded by 3.2% in 2015, the fastest expansion in eight years, and the current government expects the Spanish economy to grow 2.7% this year and 2.4% next year, with unemployment falling to 19.9% this year and 17.9% in 2017. If these predictions are correct then a few hundred thousand more people working will add to the already rising demand to buy Spanish property.
With improved employment rates and the resurgence of Spanish homes as an attractive investment asset, demand for properties in Spain is predicted to grow significantly over the next couple of years. A report by Spanish bank Bankinter predicts that demand will reach a level of 420,000 homes this year and then further rise to 450,000 in 2017, whereas last year's figure was 367,000. Bankinter predicts that 2016 and 2017 will see average annual property price rises of around 3%, with some premium locations delivering a figure closer to 5%.
Property prices are around half what they were eight years ago
At the end of April the General Council of Notaires in Spain reported that property prices increased nationally by 0.6% in February year-on-year, taking average values to €1,233sqm. At the time of writing that was equal to just £960sqm, which means the country on average is now much cheaper than Blackpool. While a 'chip butty' might well still taste better in Blackpool, Spain still offers regular daily doses of warm sunshine that the northwest coast of England can only dream about.
Price rises in the year to February in Spain were strongest for single family homes (3.8%) while the price of apartments fell slightly by 0.2% compared to February 2015. The average price for single family homes is even lower than the national average at €1,007sqm (£786sqm), while for second hand apartments it is €1,350sqm and for new apartments it is €1,619sqm (£1,264sqm).