Brexit is quickly becoming a dirty word around these parts with the Valencian College of Notaries last week reporting a 17% drop in the sale of properties to ‘Brits’ since the UK Referendum was held back in June. They add that this is the first year-on-year drop in the British market on the Costa Blanca since 2011.
However domestic demand and Swedish and Belgian purchases compensate for the decline, which actually sees the total number of operations increasing by 13%.
Many brits who had previously planned to buy are now putting their purchases on hold, at least until the outcome of the negotiations with the EU are confirmed. But of course that might take some time with the UK saying that it has no intention of triggering Article 50 until March next year. Thereafter it will be at least a further two years before any divorce agreement becomes absolute.
And with the UK traditionally providing the bulk of purchasers it’s that uncertainty of what lies ahead that is affecting the market, with sales tumbling by 17% in the province during the third quarter, ending four and a half years of uninterrupted growth
After the 30% increase in property sales between January and March, the first signs of deceleration began to appear, during the second quarter, which closed with an increase of only 9.7%.
By then some clients were beginning to have ‘cold feet’ and many were already beginning to apply so – called anti Brexit clauses, which allowed them to pull out of purchases if the referendum result was unfavourable. Those withdrawals were then mainly effected in July, after the Brexit result was confirmed. However despite the decrease UK buyers still acquired a total of 1,041 homes in the province, a very considerable number but still very disappointing according to the report.
The deputy Dean of the Valencian College of Notaries, Delfin Martinez Perez, considers that it is still too early to know if this downward trend will continue or if the market will recover. In his opinion any decision will be rather more tied to the exchange rate with any further depreciation making it far more expensive for the British to purchase.
But he stresses that “despite the fall, the numbers of British buyers is still very high, almost double that of the next highest nationality, the Swedes – and it will be very unlikely to see that fall very much further.
He said that he is encouraged by the messages being sent out by Ximo Puig, the President of the Generalitat Valenciana, who has made it clear that he will do everything that he can to ensure that British expatriates will retain all of the benefits and rights to which they are currently entitled.
Antonio Fernandez, the President of the Provincial Association of Promoters (Provia), is also calling for calm saying that “the british have a tradition of buying and settling abroad and Alicante continues to offer good prices and very good flight connections with all of the UK.”
But the fact is that at present, the Alicante real estate market has been able to absorb the blow and, despite the setback in the UK, the total number of house sales in the province continued to grow during the third quarter by more than 8.5%, from 7,761 to 8,418. The reactivation of the national demand for first and for second residences, and the good performance of the North and Central European markets have both been key factors.