Immediate consequences of Brexit for the real estate sector in Spain
Around 200,000 British citizens live in Spain, most of them in coastal areas like Costa Blanca, Costa Cálida and Costa del Sol. Their influence in the real estate market in Spain is quite relevant. In fact, British people are the main foreign buyers or investors in housing in Spain.
The consequences of the success of ‘leave’ option in the referendum will be very important for the local economy of many Spanish cities.
The Brexit will long around two years till the complete implementation. While negotiating the exit, there is something that is already impacting on the British citizens living in Spain: their pensions and savings will suffer a progressive but significant reduction. This fact will have a direct consequence in their volume of consumption, including the purchase or investment in properties in Spain.
In this regard, some estimations consider that the reduction in incomes for retired British people could be of around €1,000 per year in comparison with the average income for this segment in 2015. Of course, it is soon to know exactly how hard the consequences are going to be in the long-term, as it will depend on which will be the position of politicians at both sides of the borders, being the key question how efficient will be the capability of UK to negotiate new single commercial agreements with each one of the European States.
Since last Friday, imports are much more expensive to the British. Since the pound has devalued against the euro, any product coming from EU is more expensive. That rise will have an impact on inflation, which will affect to the extension of negative effects in time.
However, this is not a negative aspect for all the British consumers. Investing in Spain is going to cost a little more for British people, but profitability may continue rising if the pound keeps the current devaluation progress (which is the most probably scenario).