Our resident expert, Mathew Wood of Hola Properties, based in Lanjarón, updates us on the local property market….
RECENTLY, we’ve seen various trends and changes in the Granada real estate market. With properties for sale, the main trend during March 2024 was a decline in the available stock, the asking price, and the price per square metre – when compared to the same period of 2023.
In Órgiva, there were 65 properties available for sale, with an average asking price of €220,000, equating to €,1092 per square metre. This was around 26% down on the stock last year and approx. 15% down on the average asking price, with an approx. 25% decline on the average price per square metre.
In Lanjarón, there were 67 properties available, with an average asking price of €120,000, or €886 per square metre. Again, stock levels were down around 28% on this time last year, with prices just 5% down, and the price per square metre 13% down.
In Lecrin Valley, there were 132 properties available for sale, with an average asking price of €135,000, or €891.00 per square metre. Compared to last year, that’s around 14% down on stock, around 7% down on average pricing. and 5% on the price per square metre.
Meanwhile, in Velez de Benaudalla, there were 40 properties for sale, with an average asking price of €153,000, or €1,267 per square metre.
Stock is down across the whole of Granada
In line with this trend, stock levels are down around 25% in the entire Granada area, and average prices have dropped. This doesn’t mean that all prices have dropped. It’s just the average price.
These figures can be skewed for various reasons, illustrating why average price per square metre should never be used for your property valuation. Correct pricing remains critical in today’s market.
Let’s look at some of the factors at play. Firstly, the inflationary pressures of last year appear to be subsiding in many markets. Meanwhile, the cost of living crisis is still having a ‘hangover effect’. Higher worldwide interest rates dampened real estate transactions towards the end of 2023. As a result, many house sales were slower, which caused a knock-on effect here in Spain. In simple terms, people were unable to sell up – and relocate – as quickly as they wanted. As a result, this caused some delayed demand for properties in Spain.
The Brexit hangover is over
This ‘drag on effect’ is now easing, and there is a sharp upturn in buyers who are ready to move, particularly from the USA and UK.
The Brexit hangover has eased and UK citizens see that moving to Spain isn’t significantly different than before Brexit. Yes, there are more hoops to jump through, and the the doom mongers are still nay-saying about people’s ability to move here. However, in reality, it is do-able, and buyers from the UK are hitting the market in their droves.
Energy certificate changes
For sellers, there are a few changes they must face. The first is to energy certificates, with new standards being implemented this year. At present, full details about how the regulations are changing are not available. As with everything legal here in Spain, it will depend on how the new rules are interpreted.
The energy certificate has been a legal requirement for a number of years, for anybody marketing their property for sale. However, many people are acting illegally and are not obtaining energy certificates before listing their property on the market. Do look out for this, because failing to have the correct paperwork can mean that something’s being hidden. Also beware of agents that don’t legally advertise their properties or haven’t bothered to get an energy certificate. It probably means they’re not up to speed on the current legislation!
Actually, as a home seller, this could put you in a difficult position. You could be fined, along with the agent, for not complying with regulations. We’ll see what the new changes bring…
Bad news for rentals
The rental market in Spain has taken a further hit following legislation introduced in 2023. It continues to spiral into crisis, with more landlords exiting the market because the laws and regulations heavily favour tenants. With the risk of occupiers (the much-feared ‘okupas’), and the chance of receiving recompense if your property is damaged being further reduced, this is causing rental prices to spiral as supply decreases, and demand increases.
The rental stock supply in the Granada area has fallen over 30%, in the last three months alone, and rental prices have increased over 15%.
The new holiday rental regulations are also starting to bite, as more municipalities are adopting them and making it increasingly difficult for property owners to obtain a holiday rental licence.
This has caused a spike in demand for properties that already have a rental licence, because getting a new one could become more difficult or impossible in some areas.