Brexit is bad news for the recovering Spanish property market with a real estate conference in Marbella hearing that it is already having an impact with a fall in British buyers.
Interest from British buyers in locations like the Costa del Sol where they have been the biggest group of foreign buyers for many years, began dwindling in the run up to the European Union referendum in June and since.
Property expert Mark Stucklin told the conference, organised by Spanish appraisal company Tinsa, that British buyers made up 36% of foreign market in the Malaga province last year, more than double the next biggest group from Sweden and 50% of the top six markets combined.
He believes that when reliable figures are made available they will show a big decline in British purchases, perhaps 50% or more in the six months after Brexit. Stucklin said that he also spoke to other property industry professionals at the conference, including lawyers and estate agents and most of them said that Brexit is having a significant negative impact on their business.
He explained that most of the professionals he spoke to at the conference, and those he has surveyed by email, reported that British demand has suffered a moderate or big decline, and, one agent even said that he does not believe the British interest will come back for at least a year.
‘A few people report client concerns about the status of Brits in Europe after the EU exit, but more than anything it’s the fall in the pound that’s taking potential buyers out of the market,’ Stucklin said.
He also found that some professionals believe that Brexit has influenced clients from other countries, some of whom are also deciding to wait and see. ‘Buyers will often jump on any excuse to avoid having to make a big decision, and uncertainty is nearly always bad for confidence in any market,’ he added.
However, there is anecdotal evidence from some agents that British buyer interest stabilised in September after plunging in July and August in response to the original Brexit shock.
Stucklin added that the pound has moved down again in October, so he would not be surprised if British interest slides back again. ‘If you want to know where British buyer interest is heading, just look at the direction of the pound. And when I say interest I’m not talking about people dreaming of buying in Spain and making enquiries online, I’m talking about people who are serious about buying,’ he explained.
‘There’s no escaping the fact that Brexit has been a negative shock for the property market in Malaga and Alicante where the British are by far the biggest group of buyers. No other nationality is big enough to compensate for a big drop in British buyers in those areas, if that is what has happened,’ he added.