After a year of pandemic, the real estate sector in Spain is gradually recovering its pre-pandemic level of activity. This is reflected in the latest report on the evolution of the IRAI (Real Estate Activity Registry Index) prepared by the Spanish Association of Registrars, according to which during the fourth quarter, albeit moderately, real estate activity was recovering after the sharp contraction experienced in the second quarter of 2020 due to the pandemic.
As far as the province of Alicante is concerned, the recovery is evident. According to the Property Rights Transfer Statistics section published by the INE (National Statistics Institute), during the first quarter of 2021 there were 7.786 property sales in the province, 3.027 more than in the second quarter of 2020, during which the number of sales was 4.759.
Despite this improvement, real estate market activity is still below the level of activity prior to the pandemic, as during the first quarter of 2020, before the state of alarm was declared, there were 9.033 property sales in the province of Alicante, 16% more than in the first quarter of this year.
However, although there are still no official statistics in this regard, it seems that the level of real estate activity in the province of Alicante will continue to improve during this second quarter of 2021 and that, barring unforeseen events, the pre-pandemic level will be recovered during the third quarter or, more likely, from the beginning of the fourth quarter of this year.
As far as the Costa Blanca is concerned, and more specifically the area of Altea, although it is still too early to make clear estimates, everything seems to indicate that before the end of the year the pre-pandemic level of sales will be far exceeded. What are we basing these predictions on? Firstly, on the objective and indisputable data (provided by the Association of Registrars) such as the evolution of the number of sales during the last year: in the province of Alicante it increased by 7.5% while in Altea the increase was 20.20%.
Secondly, places like Altea, with small populations, located in an area near the sea where escaping to nature is feasible and where there are lower oronavirus contagion rates, are now much more highly valued, not only by Spaniards with a certain purchasing power but also, especially, by European citizens who have ‘discovered’ that they are in a position to live in a place where they can easily escape to nature, European citizens who have ‘discovered’ teleworking and wish to escape the cold, rain, snow or grey skies of their countries and settle or spend long periods in a sunny place with good infrastructures of all kinds and are therefore looking for large houses, preferably detached, with large terraces, gardens and outdoor leisure areas.
Buyers are also looking for apartment blocks with terraces or balconies and communal areas or services such as gardens, swimming pools or recreational areas. And in Altea such properties abound, with excellent qualities and still at a good price after the drop experienced with the covid19 crisis, especially when compared to other European countries or to prices in large Spanish cities such as Madrid, Barcelona or Seville, although prices for high standard properties in Altea will not be adjusted so much and will remain fairly stable during the next months.
For those who prefer to live in a sunny place and at the same time have good infraestructures, enough space, plenty of natural ligh or extra rooms which could be used as a home office, there are a lot of options in Altea, including the option of acquiring a pre-owned property at a discount price and carrying out renovations.
According to estimates made by Banco de España (the Bank of Spain), real estate is one of the few assets that offers a notable positive return and may still have upside potential in 2021 and 2022. Although yields have fallen as a result of the crisis, now standing at 5.6%, compared to 6.8% before the pandemic, investing in real estate in Spain is still an asset from which returns will be obtained.
In the province of Alicante, despite the fall brought about by the pandemic, property prices have risen by 12.20% in the last five years.
In summary, the restrictions on travel between countries and the uncertainty about the evolution of the pandemic have been the main factor that has had an impact on the evolution of the sale and purchase of housing by foreign buyers. The impact of the pandemic is still present as far as Altea’s property market is concerned but the arrival of the vaccine is giving optimism and almost certainly by the end of this year there will be a significant increase in the number of property sales, particularly of luxury and well-located flats and spacious villas with good views.