he Spanish property market has fallen to a standstill situation, as the rest of the economy in most European countries, although it is expected to resume activity during 2020, as the coronavirus crisis follows its natural course.
The recovery will be due to domestic demand by Spanish nationals and the holiday property market by European citizens.
Regarding domestic demand, the APCE (Association of Promoters and Constructors in Spain) has already put forward a demand to the Government, together with other incentives, for the reduction of VAT on newly built property from an average 10% in most areas to 4%.
This could be one of the extraordinary measures that are now being implemented by the Spanish Government, to prevent that all new housing promotions suffer the consequences of a long term crisis.
VAT is applied to the property so the reduction would benefit all buyers, regarding their nationality.
The general optimistic belief between promoters is that Covid-19 effects on the newly built property market would only be a delay in launching new promotions, but they don´t foresee significant reductions on the price.
The foreign holiday property market might be subject to high and low fluctuations as the crisis progresses during this year, once the movement restrictions are lifted.
Real Estate Agents are finding new innovative ways to keep customers interested and be ready to attract three types of customers, in an ideal scenario of a sudden rush in the property market:
Buyers and Sellers being kept on hold now, by the complete shut down of the economy, will want to exchange contracts as quickly as possible before next Autumn and the predictable return of coronavirus during the winter months.
Investors with substantial cash amounts, who are already suffering losses in other financial investments, will quickly move to the property market as the safest place to keep money during times of economic uncertainty.
Bargain hunters expecting to find special reductions on prices in some areas, as new properties add up to the ones already for sale prior to the coronavirus crisis, creating an excessive offer and the subsequent discounts.