Britain’s decision to leave the EU has consequences for the Spanish property market. They’re all manageable.
There is no denying British buyers are important to Spain. They make up 21% of foreign house sales and around 4% of the total national market.
It would be easy to believe Brexit will cause chaos on the costas and a big upset to the current property recovery, but those would be lazy headlines. The real impact is likely to be slow, entirely predictable and easy to manage.
Step One: Reassure buyers
British buyers have the same rights today as they had last week, and will retain those rights for some years to come.
Despite protestations from Brussels, a formal divorce cannot begin until Article 50 is triggered by the British Prime Minister. This is currently scheduled for October 2016, with big caveats: The referendum was “non-binding”, meaning it is up to British politicians to decide what Brexit will look like and when it might happen.
Meanwhile the two main political parties in Britain are in disarray, Brexit leaders are swiftly dialling back their promises to voters and we are seeing increasing evidence of “voter regret”. This provides huge scope for procrastination, and we’re likely to see years of mind numbingly dull negotiation before anything further happens.
In the meantime, buyers aren’t likely put their lives on hold for long.
Kyero has created a comprehensive guide to Brexit for UK buyers, which answers many of the questions they are liable to ask. We strongly recommend you share this with British clients →
Bottom line: Britons will continue to enjoy the benefits of European citizenship for some years, and can expect a broadly similar deal on Spanish property ownership once Brexit is complete.
Step Two: Show price restraint
We expect a short term reduction in UK buyer demand, although initial results don’t bear out an imminent collapse: With “Brexit armageddon” filling the airwaves immediately following the vote, UK traffic to Kyero instantly dropped… by just 12%. If this was the start of a panic, it didn’t look like one.
Brexit is a slow motion phenomena: British demand may reduce by a notable percentage in the short and long term, while possibly rising in the intervening period as people rush to beat a treaty change.
The more immediate effect will be on prices in areas popular with Brits: Weaker Sterling won’t stop UK buyers looking – but they will drive a harder bargain.
This isn’t a bad thing. We highlighted the issue of price restraint earlier this year and price stagnation will be a welcome side effect for the market.
Sales prices are far less important than volumes. Be realistic on prices.
Step Three: Attract other buyers
Four out of five foreign buyers aren’t British. The latest notary data illustrates the rainbow nature of overseas investors:
To offset a reduction in British demand with buyers from other countries, a multilingual online strategy is essential. Rightmove and Zoopla shares have crashed 20% since the vote, mostly because they are over exposed to the UK property market and UK buyers. It’s a warning not to put all your eggs in one basket.
And on this note, Kyero can be forgiven for being upbeat in the face of Brexit: We are the only portal that already operates in 12 languages.
If you’re looking for an instant way to replace British buyers with their German, French, Belgian, Italian and Swedish counterparts – please do get in touch.
We’re already talking to your next clients.
Kyero.com promotes 200,000 properties in Spain to international buyers in 12 languages