Spain » Market Report

Spain is a wonderful place to live, the property market here is an attractive option for a safe investment, if you go about it in the right way. Spain has in many years been the most popular place in Europe for foreigners to stay down or to buy a second house. The sun and the perfect climate the great variety, the price and the investment value of properties in Spain are just some of the reasons why so many people choose this country. The Spanish property market is a flourishing, but composite, sector and more and more non-residents are taking advantage of low interest rates in Spain and reasonable house prices.

Approximately 15% of the properties sold in Spain each year are sold to foreign buyers. Of this figure 90,000 are bought by EU citizens as second homes whilst 45,000 are bought by foreigners moving to Spain for good.

A recent report by Analistas Financieros Internacionales for the Association of Developers and Contractors of Spain (APCE) concludes that 200,000 foreigners will move to Spain every year until 2008, implying the foreigners will continue to play a significant role in the Spanish real estate market.

As with most markets it is the ever increasing demand for Property in Spain that is driving the price increases on property and with no sign of this demand diminishing we can expect this to continue into the future.

 

Although pure demand is making the price of Spanish property appreciate at current rates but it is actually the Property Investor who benefits most from this as they buy early at well below market value and then benefit from the price appreciation generated by this demand.

As a member of EU, Spain has rather liberal legislature dealing with the property rights of foreigners. They have a right to buy and resell all kind of properties - residential, commercial or land. There is no limitation on the quantity of acquired properties.

One of the most successful steps in the recent economic history of the country was considered to be a liberalization of the land market for foreigners. The result was that hundreds of thousands of foreign predominantly aged persons (mainly from Germany and United Kingdom) moved to the warmer climate of Spain for the whole year, buying houses.

 

Industry analysts predict that 175,000 to 180,000 second homes will be sold in Spain each year until 2008. The majority of these holiday properties are expected to be sold to foreigners, of which 52% will be British buyers, 22% German, 8% French, 6% Italian, 6% Scandinavians and 3% Belgians.

According to International Property Broker forecast Spain’s property sector is going down at the moment and undergoing a serious property crash. Spain's National Statistical Institute reports that the buying and selling of homes fell by 27 per cent in January 2008, compared with the same period last year. With the falling house prices it is a good time to buy as a lot of discounts can be negotiated. Some regions however are still very active with investment mostly from UK. The forecast is that property market in Spain can decrease further up to 50% in the next 3 years.