Newly released figures show that 2021 was a bumper year for foreign demand for property in Spain, finally some good news! The number of homes bought by foreigners in Spain was up 52% compared to 2020 and 9% above 2019 levels. This suggests that the market may have finally recovered from the impact of the pandemic. It is also far higher than most previous predictions for 2022. Even better still, there has been huge growth in sales to foreign non-residents (i.e. those buying second homes). This brings hope to many expats who have been struggling with property prices over the past few years. This might finally bring some relief to those struggling with negative equity.
So what if I own a property in Spain?
Well, this news is encouraging, higher demand means higher prices. So your property is worth more than it was 2 years ago but, not everyone is out of the woods just yet. The pandemic is largely over but its effects are only truly being felt. As a property owner in Spain you may still be struggling with negative equity. If you’re one of the lucky ones who are not, you may have to contend with:
- Lack of rental income
- Mortgage arrears
- Interest-only mortgages
Despite any increase, house prices are still to remain well below pre-2008 levels. There are over 250,000 people still trapped in negative equity in Spain alone and many more struggling with these other issues. For many this will make little difference however, the hope is that this trend continues in 2022, helping to ease some of the woes of homeowners.
Not all doom and gloom…
Rising demand mean that if you do chose to dispose of your property, you will get a higher price for it.
This is especially helpful if you are battling negative equity or mortgage arrears as it means the difference between what you owe and what you get is smaller. Some clients we have met over the past 2 years have had over €100,000 wiped from the value of their properties. As a result, this increase in values could be make or break for many homeowners in terms of being able to afford to pay the shortfall.
If your mortgage shortfall is unaffordable, do not panic, there are options available…
What can I do if I am in negative equity?
Many owners do not sell their property under the belief that the value may increase and eliminate their negative equity. Whilst this is possible, it is unlikely and, in the meantime, you will have to continue to pay your mortgage, taxes and community fees.
There are options available for you. The first step is facing the problem head-on and being realistic. EU Property Solutions will work to find the best solution to your problem, to get you the best deal.
You can call us on 0371 454 3676 to speak to the team, all our calls are free and obligation free.