Barely over the results of the British referendum and the many opinions of how this will affect the Spanish property market we are faced with another major event which could have consequences to the Spanish property market – the Spanish General Election.
Following a Spanish election in December 2015 which failed to show a party with a majority Spain was forced to go to the polls once again only a few days ago. In the recent election the PP (Popular Party) led by Mariano Rajoy did well but did not get a majority. This means that they will have to form a coalition government. This is a good sign for the Spanish property market which was worried that the left Unidos Podemos party would gain ground and make life hard for the property market. If Podemos had risen to power they would have made life hard for those in the property market.
What are the Spanish political party’s policies on the property market?
Unidos Podemos
A vote for Podemos would have meant the introduction of some of his policies which include banning speculative developments, encouraging people to occupy empty homes illegally and turning the Spanish Bad Bank, Sareb into an organization for social housing.
Popular Party
On the other hand the PP policies include the encouragement of energy efficiency, controlling harsh mortgages, alterations to the Horizontal Property Art and the rationalization of holiday rentals laws.
PSOE
If the PP is forced to include the PSOE in their coalition government they may have to incorporate some of the PSOE ideas for the property market into government policy like the fining of banks for possessing unoccupied houses and the withdrawal of some of the present tax breaks given to homeowners.
Citizens Party
There is a strong possibility that the Citizens Party will be part of the new coalition government in which case we could see the formalization of debt for property swaps, the removal of inheritance tax on inherited homes for the middle and working classes and the provision of social housing for people who have lost their homes due to foreclosure.
Other policies which would be welcomed by the Spanish property market but which have yet to be introduced by any of the parties include the reduction of transaction costs. Whatever the outcome of the coalition plans a stable government will be best for the Spanish property market. With PP at the helm we are unlikely to see any new policies which effect foreign property owners in Spain but we could see changes in the rental property laws.
How June Will Affect the Barcelona Property Market
The month of June is coming up soon and it will not be a regular month for the property market in Barcelona. There are a number of critical events scheduled to occur in June which could dramatically affect the Barcelona property market. Buyers and sellers should be aware that their property transaction, property prices and the demand for property in Barcelona could rise or fall depending on the outcome of these events.
June Events to Effect BCN Property Market
1. Spanish General Elections – The Spanish parliament was dissolved recently due to no party able to form a majority at the center. And so it was decided that on June 26 a general election would be held to determine the new government.
2.Britex Referendum – The British have never been 100% behind the idea of the EU and with various factors effecting the country’s position in the EU it has been decided that on 2 June there will be a general public referendum to decide if Britain stays part of the EU or is Britain Exits the EU (Brit+Ex=Britex). This will affect the foreign buyers market in Spain and Barcelona. British property owners in Spain may rush to sell their property and new buyers may be hesitant as they will not know how the British exit of the EU will affect their investment. With a change in the British property investors in Spain the general property market will be affected.
It is also important to note that the pro-independence parties which aim for independence of Catalonia from Spain have won a majority in the Catalan parliament. This new Catalan government is doing all it can to push for Catalan independence. The Catalan President, Carles Puigdemont won more than 50% of the popular vote in the provincial elections. Supporters of Catalan independence are pushing for a referendum in Catalonia to determine whether there is general support for the independence of Catalonia.
Several things could happen in the Barcelona property market as a result of the June events. If the Spanish elections result in another fractured mandate; if Britain votes to leave the EU and if Catalonia becomes independent the Barcelona property market will be affected. It could result in a sudden flooding of the market as owners rush to sell their Barcelona property and get out of Spain. This will cause property prices to drop suddenly. Political uncertainty is another cause of lowered property prices. When people are uncertain of the political climate they tend to postpone their property transactions and less demand means lower prices.
It is unlikely that Barcelona will stop being one of the most attractive locations for property investment in the world. It will continue to have all of the advantages which make it a hot property investment location. However the political changes in Spain and Britain could temporarily affect property prices and the demand in the market. There is only a short-term risk to the property market as a result of June events but it is still something that property owners and buyers should be aware of.
