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Demand Could Push Up Prices in Popular Parts of Spain

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Enquiries from international buyers for property in Spain have reached record breaking levels at a time when prices are still falling but demand could push up values in popular areas.

Spanish property portal Kyero, which lists more than 200,000 homes from 3,000 estate agents, said it has had its busiest ever quarter and properties prices from €50,000 to €100,000 are proving most popular.

The firm’s latest quarterly report shows that 28% of all enquiries were for properties at €100,000 or less and they are also proving popular with domestic buyers.

The report also suggests that prices could start rising because of the demand. Valuations Company Tinsa has released data which shows that a total of 35 popular locations have seen price raises between the first quarter of 2014 and the same period in 2015.

The previous year saw just four of those areas register price increases. The upward movement indicates that those seeking properties in the €50,000 to €100,000 range might soon have to up their budget in order to get what they are looking for.

The Kyero research confirms that Spain's coastal areas are some of its most popular with second home buyers looking for a holiday home with easy access to beaches. Alicante, home of the Costa Blanca, is the most popular province, according to the Kyero report with 31% of all enquiries focusing on that region. Malaga was the second most popular area, accounting for 15% of total enquiries.

‘Spain's beaches offer some fantastic, family friendly holidays and many of those buying here want to own a property within a short walk or drive of at least one beach. Apartments are by far the most popular choice, accounting for 39% of all enquiries during the last quarter, 10% ahead of villa enquiries,’ said Kyero founder Martin Dell.

‘Many families like the idea of owning an apartment that comes with a shared swimming pool that the condominium company maintains. It's less hassle and expense than owning a villa with its own pool,’ he added.

The Kyero report also reveals that it is three bedroom properties that command the most interest, with 32% of all enquirers looking for properties of that size. Two bedroom properties come a close second, with 30% of total enquiries.

Meanwhile, the Tinsa data shows that overall the average price of new and used homes declined by 1.1% in the first half of 2015 compared to the same period of 2014 but the Mediterranean Coast and Islands standing have performed better.

Prices in the Balearic and Canary Islands increased by 4.4% in the first six months of the year, while prices on the Mediterranean Coast increased by 1.8% in the same period. The biggest falls in prices have been seen in cities with declines of up to 3.7%.

Since the peak of the market in 2007 average property prices have fallen by 41.8%. The Mediterranean Coast is the area where values have been adjusted most, with an accumulated decline of 48.6%, followed by the capitals and large cities and the metropolitan areas with accumulated falls of 45.7% and 45.1%, respectively.