Spanish Property: Delusionism or Optimism?
September 8th, 2009
Over the summer months, the larger UK property portals reported best-ever numbers for visitors and enquiries. This is surprising for two reasons:
- There is normally a summer lull in traffic to property-related web sites.
- We’re supposed to be in the middle of a recession.
Perhaps even more surprisingly, visitors to Kyero.com increased by an incredible 48% comparing August 2009 with August 2008.
The month-on-month growth in visitor numbers and enquiries has also been surprising – rising from 3% in May to 8% in August 2009.
Clearly, I’m not complaining about this state of affairs, and nor are the estate agents advertising properties on Kyero.com – but it is a little puzzling isn’t it?
I can’t completely attribute this surge in interest in Spanish property to our ongoing efforts to improve the web site – because we’ve been doing that for years without seeing this magnitude of improvement before.
Looking at the surge of traffic to property portals in general, I think the answer is that there really is a genuine increase in interest in property – in Spain, the UK and elsewhere. Why would that be?
I think that Edward Hugh’s article goes some way to explaining this phenomenon. Speaking of Spanish consumers in particular, he writes:
“.. Consumer confidence goes on rising, month after month. Confidence in the current economic climate rose 3.9 points in July, continuing a six-month trend of increased optimism. The survey also indicated Spanish consumers have higher hopes than ever for the future of the economy, and the indicator for future economic expectations now stands at 106.7, up from a low of 59.8 in July 2008.”
The incredible thing is that this rise in confidence is happening despite the presence of evidence and data indicating that the economy continues to worsen.
Perhaps we’re all just sick of the doom and gloom and have silently agreed with one another not to perpetuate it any longer?
An argument for more optimism rather than pessimism can be found in Significant Spanish Upside. On page 5 of the report, investment analysts Cohen & Steers say that:
- 30% of the European housing stock has already been recapitalised (revalued)
- Between now and 2011, buyers can make a killing in Spanish property and elsewhere.
- By the second half of 2011, this potential will dry up because the European economy will have fundamentally recovered.
By the way, the report carries a health-warning for the general public, and is aimed at the professional and institutional investor market.
Clearly, Cohen & Steers are in the business of selling their investment advice and expertise – but that doesn’t automatically make their forecasts wrong or suspect.
Equally clearly, there is a groundswell of public confidence – one possibly substantial enough to cause a turn around in the economy.
Deluded consumers following delusional professional advice? Or, rising public sentiment creating a brighter future?
Whatever the case, I suggest that for now, property markets will continue to be driven by cash-buyers looking for a good deal. It’s hard to see how any other type of buyer could be active – particularly in the Spanish property market.
At Kyero.com, it’s virtually impossible for us to correlate property enquiries originating from the web site with actual sales of properties – but I’m convinced that even though raw enquiries and interest is at an all time high, the majority of deals being done will be for lower priced and heavily discounted property.
Martin Dell, Kyero.com
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