Property in Spain

Is this a good time to buy property in Spain?

If you're intending to buy property in Spain mainly for investment purposes you may deterred by constant gloomy predictions about an imminent price crash that will leave the country's housing industry in a state of crisis. These black forecasts have been around for some time but fortunately for Spanish property owners the bubble hasn't burst yet and experts now believe prices are likely to stabilise rather than plummet.

We may not see the staggering price rises that Spain's property market has experienced over the last 20 years but house prices look set to continue rising for the foreseeable future, especially in the popular coastal areas.

Property prices leapt by a mind-boggling 284% between 1987 and 2002 and have gone up by an average of nearly 100% over the last decade. Many experts forecast a serious downturn in the Spanish housing market with the introduction of the Euro in January 2002. In the months leading up to the Euro's debut there was a mad scramble by foreign investors keen to spend their black pesetas on Spanish property. But 2002 came and went without any slump in the market - in fact prices have continued to rise at the rate of around 15-20% per year in many tourist areas.

Disillusionment with the Stock Market and an ever-increasing demand from foreign buyers wanting to escape the cold climes of northern Europe have kept Spain's property market extremely buoyant and there seems little sign of that changing in the foreseeable future. Experts now say prices along the Costas will continue to rise albeit at a less dramatic pace.

It's important to remember that the housing market along the Costas works in a completely different way than inland Spain. You only have to look at the feverish construction activity taking place along all the most popular coastal stretches to see that foreign demand for those dream homes in the sun is as strong as ever. So that while prices may stagnate or even drop slightly in the non-tourist areas, they're unlikely to do so if you buy anywhere near a tourist resort.

Spain is the world's top tourist destination attracting more than 50 million visitors a year. If you find out where they're going and buy a property there you won't go too far wrong. If you're buying solely for investment purposes it's sensible to purchase a property with good letting potential - i.e. near the sea, close to local amenities and an international airport and with either a private or communal swimming pool. The Costa del Sol and Costa Blanca are two of the most popular tourist spots and consequently are prime investment areas. Property prices are relatively high in both areas but because there's such a huge demand for housing on both Costas you can be fairly sure that if you invest there you'll be sitting on a goldmine in the long term.

© The Pink Fridge Online Magazine 2008 - Spanish Property

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