According to official data from the Spanish ministry of housing, Spain’s property market boom saw its eventual conclusion in 2007. Overall, prices increased by just under 5% – a normal increment for a non-booming economy that nevertheless stands in sharp contrast to the strong price rises of up to 20% that took place in the ten previous ten years.
A reduction in demand (which had been disproportionately high) and more regular price rises are some of the characteristics that make buying Spanish property much more approachable for consumers. While buyers can no longer expect the purchase of a Spanish home to represent a short-term profit venture, they are still drawn to Spain by the country’s fantastic weather, beauty and culture.
Buyers in the overseas property market that place more emphasis on quality of life than profits in their search of a relaxing home in a beautiful setting continue to stimulate the Spanish property sector. In contrast, a large percentage of profit-driven investors that were present during the boom years have disappeared as a result of the market’s shift towards a regular, consumer-oriented market.
While mere profit seekers find the current situation less appealing, Spain’s property market has become more attractive and accessible to private consumers looking for a long-term investment in a home and lifestyle. One prime effect of the reorientation of the market has been the buyer’s strengthened position at the bargaining table.
Previously, demand in Spain’s property market was so strong and steady that sellers and real estate companies could afford to take buyers for granted, leaving the consumer powerless and faced with substandard service during the purchasing process. Powerful investors and sector-related businesses such as banks, estate agencies and construction companies engaged in a shameless pursuit for returns at all costs, unrelentingly driving up prices and obtaining profit at the expense of the consumer.
The reduced demand and balanced price increases of today has forced a return to a consumer-oriented market focused on service and quality. Not only can sellers no longer expect buyers to simply line up outside their door waiting to buy a property; they must play the role of the flower that offers sweet honey to the bee. This leaves consumers free to exercise the bargaining power of which they had been stripped in years past.
Now that demand is much more selective, real estate businesses that fail to provide an acceptable level of consumer service are simply weeded out of the market. To cite just one example, 2007 saw the closing of a staggering 40% of existing estate agencies throughout the country.
This development clearly points to the existence of many “leech businesses” that operated with the sole intention of partaking in the profit bonanza of Spain’s property boom and, due to unclear business plans and short-sighted objectives, were unable to maintain their existence once boom conditions disappeared. The cleaning effect created by post-boom conditions has been another positive development for consumers.
Today Spain’s property market is populated with service-oriented businesses that understand – and owe their existence to – their responsibility toward the consumer. Buyers in search of a beautiful, relaxing place to retire or vacation in can approach the purchase of Spanish property with renewed confidence and optimism.
Kindly contributed to Degtev by Patrick Collins who works as a content writer for oppSpain a company that is specialised in selling off plan properties in Spain.