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Desolate Spanish farmhouses tell you much about the European property market

Drive through Spain’s interior and you will be captivated by its starkly beautiful landscape. There is, however, a sense of desolation about it. The crumbling broken walls of abandoned farmhouses tucked in amongst the almond groves and pine plantations, and the deserted streets of ancient villages are testament to one of the most powerful demographic forces at play today.

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Drive through Spain’s interior and you will be captivated by its starkly beautiful landscape. There is, however, a sense of desolation about it. The crumbling broken walls of abandoned farmhouses tucked in amongst the almond groves and pine plantations, and the deserted streets of ancient villages are testament to one of the most powerful demographic forces at play today.

Rural flight is slowly draining the life from half of Spain's villages and towns. Regions such as Aragón, Galacia, and the Celtiberian highlands are losing people at the rate of five an hour. Villages there face a bleak future with the young continuing to seek their fortunes elsewhere.

The result is a region that now rivals the Arctic provinces of Lapland as the least populated in Europe. For every square kilometre, there are fewer than eight inhabitants and those left behind continue to age and fade away. In 22 provinces, a third of inhabitants are already aged 65 or over (the national average is 16.7 percent).

Spain is an extreme example, but the same forces are at play throughout Europe. The Economist recently described Bulgaria as the fastest shrinking country in the world (the next nine are also in eastern Europe). East Germany experienced the trend acutely when millions of the young – mostly women – fled to the west after reunification. Decades later, this has left entire regions largely devoid of children. In Italy, the second oldest country in the world after Japan, entire villages are for sale.

Bright lights, big cities

The flip side of rural flight is the growth of cities. Even in countries where the population is edging downwards, urban areas continue to grow. Again, Spain presents an extreme example, but in this case of urban growth.

Alasdair Rae, professor of Urban Studies and Planning at the University of Sheffield, recently argued in The Conversation that although Spain only has 93 people per square kilometre, it is not a sparsely populated country. His point was that although only13% of the country’s 505,000 1km squares are lived in, these have a “lived density” of 737 people.

For investors seeking property investment opportunities, the growth of cities is the most exciting story of our times, but caution is needed.

“Even though the settlement pattern appears sparse, people are actually quite tightly packed together,” he wrote. “In fact, Spain could claim to be the most densely populated major European country by this measure, despite its appearance on the map.” 

According to his work, the most densely populated square kilometre in Europe with more than 53,000 people is an area of Barcelona. Altogether, there are 33 areas across Europe with a population of 40,000 or more: 23 are in Spain, and ten are in France.  

Rural flight is not a new trend. It has been ongoing since the 1850s, but has experienced a dramatic uptick in recent decades. This powerful force will continue to grow and shape European cities well into the future. 

For investors seeking property investment opportunities, the growth of cities is the most exciting story of our times, but caution is needed as there will be both ‘winning’ and ‘losing’ destinations. According to analysis by Patrizia, between 2017 and 2025 only a third of European regions will witness growth in their working age population. 

Places such as Dublin, Greater London, Munich, and the Randstad area will continue to grow as they hold the promise of jobs, amenities for families, and good fortune, but only a few cities will capitalize on this trend. Investment strategies should take this into account.

For further information, refer to Patrizia Insight, European Residential Markets 2018/2019

 

With Greg Langley
 

Photo: Fendt18

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