With the British market being so important to the Spanish real estate industry—some 27% of foreign transactions involve UK citizens—the results of the in/out EU referendum are being awaited with interest. Scheduled for June 23rd, it could be a big few days, with a possible new Spanish General Election being pencilled in for June 26th by acting Prime Minister Mariano Rajoy, should an attempt to form a government before the March 3rd deadline fail. Both events are of importance to the property market, although maybe not overwhelmingly so. One thing financial markets and investors do not like is uncertainty, and while the year has started well, with real estate prices up in January (source TINSA), it is reasonable to assume that the continuing recovery in the property market will accelerate once issues such as the ‘brexit’ vote and Spanish government formation are resolved. The UK’s in/out referendum recently announced by Prime Minister David Cameron is of greater interest to the British expatriate community, although the consequences of a no vote are unknown. There would be no immediate exit, with a period of around two years needed to negotiate terms for such an event. What is clear is that British buyers will remain very important to Marbella’s property market whether the UK remains in the EU or leaves. After all, the reasons for the town being such a desirable place to live—the climate, top-class infrastructure, good schools, quality medical care, fine dining, excellent golf courses and sporting facilities, as well as miles of golden beaches—will still be here. Factor in the large British expatriate community as well and it can be seen that Britain leaving the EU would not mean Britons exiting Spain, although a no vote is generally considered to be unlikely, even if it may be a close run thing. In a poll conducted after the June 23rd date was announced, those wanting to remain in the EU held a 15 point lead over those who want to leave, with 19% undecided (source Mail Online). Other polls have put the gap at nearer 8% in favour of an ‘In’ vote. The Spanish election—assuming a coalition government is not formed in the meantime—will also bring more certainty to the local economy as well as to the wider EU political scene. Perhaps the most important effect that both the EU referendum and Spanish elections will have in terms of British investment in Spanish real estate will be on currency exchange rates. Sterling has recently entered a volatile period. It is to be hoped that the resolution of these two issues will bring some stability to the markets just in time for what is expected to be a record summer tourism season.
- If you are a British expatriate in Spain you can vote in the EU referendum, subject to certain qualifying criteria—more information is available