The year 2007 spelt gloom globally. The year marked the onset of the real estate crises, which prompted the global economic crash. The events of that year prompted a chain of events in the following years: there was unprecedented loss of jobs in Spain and the country witnessed the greatest losses in the property market, which reached its lowest point in 2010. Between 2007 and 2010, the property market had lost almost 50% of its 2007 value.
Why Spain suffered so hard from the Real Estate Crash
Characteristically, Spaniards are house owners, a trend that put them on a collision path with the real estate crisis. The real estate crisis was characterized by repossession of houses by banks. Spaniards lost their jobs due to the global financial crises. Without jobs, house owners could not keep up with their mortgage payments, which prompted the banks to repossess the houses. By the end of 2010, banks were the largest real estate agents due to the embargos.
The global economic and real estate crises were a blessing in disguise for Spain, and more specifically, the Canary Islands property market. The world had witnessed sustained low interest rates, which eased the cost of credit. Spain’s property market appeared lucrative for investors with little monies left after the global financial crises, and they ventured into the market. The humanitarian crisis in the Middle East also prompted a massive influx of tourists and investors into Spain, and especially the Canary Islands. This cocktail of events marked the onset of the turn of events for Spain’s property market.
The new era has begun. Real Estate Market and its surrounding economy are recovering
Since 2015, Spain’s property market has witnessed a change of strategy with the growth of real estate franchise-based companies and real estate agents who focus on market niches. The change of strategy has led to the growth of the market, with the market attaining a 5% annual increase in prices by the end of 2016. 2017 is more promising with volumes, prices, and speed of sales anticipated to be higher.
Tenerife’s Property Market
The market growth that is being witnessed must be safeguarded to be sustainable. Most of the real estate clients we attend in our business come from German speaking countries; they are known for their quality and tendency to investigate and question the finest quality details. Unfortunately, most of the real estates in Spain have fallen short of client’s quality assessment; a significant number of properties here in Tenerife need some serious refurbishment. However, there are a couple of expert builders in Tenerife such as Ross Davies; his teams’ quality standards are very high and offer quality guarantees for all their works.
Effects on the local economy
Furthermore, the increase in property demand – be it purchase or rent – due to the increasing Immigration of European citizens and the reducing unemployment rates in Spain will attract more investors in the industry. The real estate industry growth and subsequent profits will help the key players such as construction companies, architects, carpenters, plumbers, and electricians.
Spain’s real estate market, and more specifically the Canary Islands offer a solid investment opportunity to any investor. The country’s real estate market suffered from the global financial crisis, but the effects were not far reaching. A chain of events has triggered a massive capital growth, which has boosted demand, which is the driving factor for supply. The high demand in Spain’s property market has attracted major key players in the industry, but their numbers are still inadequate; the industry still offers valuable investment opportunities to multiple other investors.