This is the big question that people thinking about buying property are asking themselves. Will property prices fall in 2021?
The answer is: Probably not.
With the country in lockdown and the Spanish economy paralysed, speculation has begun on how this might affect the Spanish property market. People have suggested that when the borders started to open, property prices would start to drop. Reductions of 30, 40 and even 50% were mentioned, in a nutshell: BARGAINS!
But the real situation is different. Our current crisis is not based on economic cycles, but on a pandemic that is acting like a brake on the economy. We are facing a temporary crisis which will only end when the COVID-19 virus is under control. This effect causes the feeling that it is better not to lower prices to make a sale while there is a positive horizon in relation to the end of the pandemic.
The Valencian Community ended the last quarter of 2020 as leader of real estate activity by population in Spain. Between the months of October and December 3.28 property sales were recorded for every 1,000 inhabitants. The most important figure, without a doubt, refers to Alicante and the Costa Blanca, which with 4.09 sales for every 1,000 inhabitants leads the property sales.
There is a lot of interest in purchasing property on the coast, particularly among non-resident foreigners who, due to this pandemic, have taken a firm decision to move to Spain. But it is expected that the supply will be limited and this demand will result in a price increase of 20% when the restrictions finally come to an end.
The start of vaccination plans in all of Europe is having a positive effect on the economy because this augurs an end to the pandemic. Technological advances are also a plus point, the possibility of visiting properties virtually from your own sitting room through videos or virtual tours, has meant that many sales have been made remotely making it possible for buyers to invest and plan ahead for the recovery.
In short, the property sector continues to be a stable investment, possibly one of the safest at the current time, and investors faced by high volatility in the financial markets are preferring to invest their money safely in property until things return to normal.
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