In a scenario of drop of sales within the real estate sector, there is a product which keeps its demand, avoiding the fall of prices. Those are the rural properties.
According to a report drawn up by Tecnitasa, the average price of homes in Spain has dropped in the last five years, around 31%, while the price of rural properties has only decreased in 7%. “Housing reached its peak in the second half of 2007, starting to drop from that moment on. Nevertheless, the rural properties continued increasing their prices until the beginning of 2010.”
This drop in prices has not slowed down operations as it has in the rest of the real estate sector. While the number of mortgages on homes has dropped more than 82% in the last six years, the drop on rural properties has been of around 55%.
“It is surprising that, according to the National Statistics Institute, the number of mortgages on rural properties has dropped by more than 20% in the last year, but the amount of them has seen an important increase, in percentages which had not been seen in the last six years”, Tomás González, director of Rural Properties at Tecnitasa, explains.
“Those properties in Madrid and surroundings with more than 200 hectares are easier to sell than an 80 square meter apartment”, Jorge Villalón, manager at Fincas Villalón, assures. “The are customers who commission us to sell rural and residential properties in cities and are only able to sell the first ones”, he adds. As with most of the real estate products, there are many different types of properties and prices within the rural properties, which are established depending on the area. “These are very mixed products with prices that go from 2500€ per hectare in dry land in Aragon to 300000€ per hectare in greenhouse farms in Andalusia.”
This diversity also affects the different types of buyers. “There are two profiles: the farmers, who demand plots for agriculture and livestock; and investors, which are mainly interested in the farming activity”, Tomas Gonzalez explains.
The crisis has not eliminated property buyers, but has changed their profile. “Weekend getaway properties do not interest developers anymore, who are now the sellers, and are seducing top executives in international banking who are interested in investing in rural assets”, Jorge Villalon comments.
These new owners look, in general, for properties located near the main capitals like Madrid, so that they can use the property as a second residence. “Before the crisis, people were looking for properties of 2000 hectares. Now, they do not want those dimensions, but something smaller at a distance of maximum two hours from Madrid by car”, the owner of Villalon stresses.