Property Market in 2005

All the signs are pointing to a buoyant property market for potential investors in Spain for some time to come.

Despite new markets opening up in countries such as Croatia and turkey for people wanting to in vest in property abroad, Spain still remains popular and healthy choice with foreign buyers and investors. Perhaps this is because we Brits have long enjoyed a love affair with Spain – our closest neighbour with a Mediterranean climate. After all it has catered for our holiday needs for years, even providing English food, as well as beautiful beaches and lively nightlife. For many Spain feels like a home from home and the reliability and constancy of the Spanish market is a direct reflection of this long and close relationship.

Properties in Spain consistently generate a healthy source of rental income and enough people maintain a vested interest in the property market, from builders to buyers to keep in buoyant. Spain continues to be cheaper for both living costs and property prices and last year alone 500,000 Brits visited Spain with the trend for buying a home there showing no signs of slowing.

Changing Trends

However there has been a shift in the type of buyer investing in Spanish property and also in the area that they are investing in. Interest in no longer focused on the Costa alone, and places such as Costa de la Luz and Costa de Azahar are experiencing increased interest, as are certain areas of rural Spain. Some agents believe that over the last year interest in rustic Spain has increased by roughly 15 per cent.

Developers have recently been pandering to the investment market too, seeking new and innovative ways to keep potential buyers interested. With the emergence of new players on the international scene such as Hungary and Bulgaria who offer substantial profit markets, developers are playing in safe and diversifying what they offer. Many companies are building ‘healthy living’ developments, boasting medical facilities and botanic gardens, along with the traditional restaurants and bars. High rise apartment blocks have given way to low rise, high quality luxury villa developments, with all facilities on site in an attempt to offer something different.

However does Spain remain a good investment? For the canny investor the answer is yes, especially as prices continue to be so affordable since no one can afford to prices themselves out of the market.

Government Initiatives

The Spanish government is also responsible for changing trends within the market. In order to prevent future development and further damage to the already fragile ecosystem of the coastal areas, new taxes and legal measures have been brought in to restrict building in these parts of the company.

Tax breaks and legal incentives have also been introduced to encourage inland development, and with the coasts becoming increasingly expensive places to buy, a market seems set to develop in inland Spain.

The future sees continues development; with the Spanish government currently working towards a new property plan for 2005 –2008. There objective it to develop around 720,000 homes for Spanish residents, overseas property purchasers and second home residents over the next few years. The property minister will enforce land reform law, instilling measures against speculative retention of land and property, and will also promote SEPES, a Spanish land institution as a public operator.

The property market today

 

Currently the Spanish property market remains buoyant, particularly along the Costa Blanca and mirrors closely market developments and price hikes in the UK. This buoyancy is expected to continue on into 2005 with budget airlines expanding their destinations, meaning that Spanish property is more and more accessible to the masses.

In the past 18 – 24 months we’ve seen appreciation in property prices of approximately 25-30 per cent and we’re being told that although this is set to slow down, there will remain a healthy profit on property for the investor. British interest in Spain hasn’t waned despite recent reports to the contrary. Of all the new properties being sold in Spain in 2004 approximly 25 per cent of the 56,000 properties purchased by overseas buyers will be bought by brits.

In 2003, it was predicted that Spanish property prices would increase by 13 per cent during 2004. In reality prices have increased by 17.18 per cent and the average property price per sq.m in Spain sits at Î 1.591.85c. Despite this slight price hike compared to what was predicted, the reality is that the Spanish property remains affordable for the majority of potential British investors.

Looking to the future

The Spanish property market is expected to see price increases of up to 10 per cent through 2005. By 2008, the number of foreign buyers in Spain is expected to exceed Spanish owners in popular tourist and coastal areas around the country. Over the next four years 150,000 properties will be built purely for foreign investors and second homebuyers. All in all it is safe to say that if you’re looking to invest in a home abroad, Spain still represents an attractive and ultimately affordable option.