Brexit effect devastates Spanish property market

Published:  5 Dec at 6 PM
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Real estate agents in the Spanish Costas are reporting British demand for homes in the sun has fallen by 50 per cent since the Brexit vote.

According to local estate agents, British demand for holiday and retirement homes in the popular Costa del Sol and Costa Blanca regions has fallen by 50 per cent since the Brexit vote and subsequent sterling crash. The slump wiped out strong gains in the market during 2015, during which 10,000 homes were purchased by Britons taking advantage of the strong pound.

Traditionally, British buyers have dominated the housing market in Spain, with 28 per cent of sales on the Costa del Sol and 26 per cent in the Costa Blanca down to British purchasers. Brits are also major buyers in the Balearic and Canary Islands and Murcia.

Brexit notwithstanding, the expat property market in Spain has always mirrored the sterling/euro exchange rate, with the present perfect storm created due to the continuing uncertainty following the Brexit result. At the time of writing, the pound has fallen by 18 per cent against its late 2015 level and, six months after the referendum, UK expats’ rights to remain are still in jeopardy.

Leading estate agents in the regions affected say their traditional client base includes around 40 per cent of buyers from the UK, a number now reduced to around 30 per cent. Although interest is still strong, the majority of buyers are watching currency movements and hoping for an improvement before they commit to purchasing.

Demand from EU member states, including France, Germany and Belgium, is growing although the numbers are not expected to make up for the loss of large numbers of British buyers. Real estate agents in the regions affected are concerned that, should the trend continue, its impact in popular areas such as the Costa Blanca and Costa Brava will be devastating.
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