Pound Sterling Bouncing Back Against the Euro
With political shocks now out of the way in both the US and UK, pound sterling has been rising against the Euro since the beginning of November. The exchange has finally broken the 50-day averate and is rising all the way up to its current level of just above 1.1600. This needed break is pushing positive momentum and will soon advocate for further gains with analysts estimating multi-week gains. This is good news on every front of the economy and investing in property abroad.
The Spanish property market barely faltered when news of the Brexit hit the air ways. Many did however become worried about their current property investments in Marbella, Costa del Sol. But little damage was done, and property investments here on the Costa del Sol stayed strong. Even amongst current buyers, the number of people from the UK wanting to buy property on the Costa del Sol barely flinched. The property market here in the South of Spain is still seeing record growth, and more Britt’s are buying homes or second holiday homes here on the Coast.
Fear of impending Eurozone Collapse Exaggerated
No one is denying the world has gone through some serious ups and downs, considering both sides of the Atlantic have seen shocking results that both defied polls and analysts, but after the dust settles, we can clearly see there is in fact no doom and gloom as predicted. Even though we are currently seeing some dips in the stock market after Trump’s stunning victory in the US, we are also seeing a comeback to stability.
The Eurozone still stands, and the pound sterling is bouncing back making people breathe a sigh of relief. Properties on the Costa del Sol have been selling at a rate not seen since the early 2000’s, and property continues to come onto the market. Best of all, construction on the Costa del Sol is once again building a path to better developments with buy in rates at an all-time low. Investing in rental properties in Marbella is another area taking flight, with more people realising the enormous benefits of taking advantage of the record breaking tourism in Malaga province for 4 straight years.
Buying property on the Costa del Sol – Brits leading the Way
Figures from January to July this year 2016 show there were 4,978 registered real estate transactions in Malaga, an increase of 16.9% on the same period in the previous year, accounting for 70% of sales in Andalucia. In the same period, the number of sales to foreigners in the whole of Andalucia rose by 18.9% year on year. The figures show the Costa del Sol is still by far the number one choice for foreign buyers.
Meanwhile, figures from the second quarter of 2016 show sales were up in all regions of Spain except Navarre and La Rioja, where they fell 20% and 2.7% respectively. They rose the most in the Balearics (28%) and Catalonia (25%). Andalucian sales rose by 10.1%. The overall picture, according to a report by the Notaries’ Association, is one of a stronger market in areas that benefit from foreign demand, like Madrid, the Mediterranean coast, and the islands.
If that doesn’t convince you that the Brexit was overblown with bad estimates on the property values in Spain, there is more to think about considering what you pay for properties back in the UK. For example, according to the Ministry of Public Works, Spanish house prices remain well down on the all-time high of just over €2,100 per square metre, which they reached in the first quarter of 2009. In the second quarter of 2016, the average price per square metre of a home in Spain stood at €1,506, equivalent to £1,345. Taking into consideration Halifax bank data, on average the price per square metre of a house in the UK is £2,216 (2,482€), buying a home on the Costa del Sol, where the sun shines 325 days a year, where the winters are mild and spirits high, and where the way of life is relaxing most of the time, the so called bottoming out British pound will still buy you much more here than it would in the Brexit Isles.