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Where property prices are expected to fall in Spain

Almost all real estate experts forecast a drop in property prices for homes in Spain as a result of the coronavirus crisis, but there are certain areas where the decrease is expected to be greater than the average.

In late May, the Bank of Spain revised its forecast for the impact of the coronavirus outbreak on the country’s economy, predicting a 12.4% GDP drop and an unemployment rate of 20% by the end of 2020, worse figures than initially expected.

Colliers International Spain expects a “short-term drop of 5-10%” in property prices. Spanish Savings Banks Association Funcas believes the decrease will be even more pronounced at 10-20%, while international real estate company RE/MAX has estimated an even bigger fall in Spanish house prices, of up to 30% in some areas. 

Others however, such as the BBVA Foundation, have argued that prospective homeowners should not expect a price drop as severe as that seen in the 2008 financial crisis as the cost per square metre wasn’t as overinflated at the start of 2020 as it was back then.

According to Colliers International, second-hand homes in popular tourist hotspots such as Palma in Mallorca, Alicante, Barcelona, Valencia or the Canary Islands could be hardest hit and could see a price drop of 10% by the end of this year.

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