The residential property market in Spain contracted slightly in October after months of double digit increases, according to the latest figures to be published.
The number of homes sold fell by 1.7% compared to September, the data from the Association of Spanish Notaries shows, while year on year sales were up by 2.1%.
Mark Stucklin of Spanish Property Insight pointed out that the lack of significant growth comes towards the end of a year in which sales have risen by double digits in percentage terms almost every month this year.
The data also shows that the average national house prices rose 1.5% in October. It means that prices are still 30% below their peak and sales down 50% from their peak.
But at the higher end of the market it has been a positive real for the property market, according to Susana Sanchez, director of Lucas Fox Ibiza. The firm has seen an increase in German, French and Dutch buyers but the decision by the UK to leave the European Union has had a significant impact on the buying habits of British buyers who have traditionally made up the highest proportion of foreign investors on the island.
Buyers are spending more, according to Sanchez and also looking to make an income if they are buying a second home. In 2015 a lot of buyers had budgets of up to €1 million but in 2016 this increased to €2 million.
French, Dutch and Germans have become the most prolific buyers on Ibiza, taking over from British clients. They are generally looking for second homes, holiday homes and villas to rent out during the summer. They are normally cash buyers.
‘We are seeing increasing numbers of people who want to be able to earn rental income from their purchase. Around 70% of our clients intend to rent the property out in the summer at least for a couple of weeks,’ Sanchez explained.
The most popular properties have been homes in the countryside priced between €1 million and €2 million. The area of San José is always in demand but this year the firm registered more enquiries about properties for sale in the north of Ibiza.
Looking ahead to 2017 Sanchez expects to see more German and Dutch buyers and an increased number from France. After the initial shock of Brexit is over more British buyers could be welcomed but this is dependent on the negotiations for the UK to leave the EU.