Trends in Spain's property market over the last 20 years suggest Spanish real estate presents one of the best investment opportunities in the current economic climate. Buy the right kind of place in the right location and you've really got very little chance of going wrong. If you invest in an apartment or villa with good letting potential you'll be able to sit back and enjoy a good income while watching your property's value increase substantially year on year.
Spain has seen some quite spectacular property price rises in recent years and many experts are predicting that the bubble is about to burst. Prices are likely to stabilise and, in the worst case scenario for current owners, could even plummet in those areas where property values have been wildly over-inflated.
But in the long term you can still be fairly certain of coming out on top if you choose your property carefully. Of course your choice of property type and location will depend on whether you're buying solely as an investment or whether you intend to live in the property either part-time or permanently.
If your purchase is purely for investment purposes you'll want to buy in a top tourist spot, close to the sea and all local amenities with easy access to an international airport. The advice from fellow investors is to go for the most upmarket property you can afford in one of the most desirable coastal areas of Spain. No-one can be absolutely sure what will happen to property prices in future but one thing is certain - north Europeans will continue to descend on the Spanish Costas in their millions as long as the sun continues to shine and the warm waters of the Mediterranean continue to lap the world's most visited shores. And an increasing number of holidaymakers are now favouring quality self-catering accommodation over the high-rise hotels that were the top choice in the 70s and 80s.
If you buy a top of the range property in a highly sought after area, you'll be able to charge top rental tariffs. Property prices on the Costa del Sol and Costa Blanca, for example, are relatively high compared with most parts of Spain but in many cases rental income provides an annual return of around 8%. Owners of property in the more exclusive areas of the Costa del Sol are able to charge the highest rental fees in Spain (higher even than in the Balearic and Canary Islands). Some owners in these areas have seen their properties increase in value by 50% or more in the last three years so put those two factors together and you'll be laughing all the way to the bank!
The continuing feverish demand for property in the most popular coastal spots (from British, German, Scandinavian and more recently east European buyers) suggests that prices will continue to rise in those areas, albeit perhaps at a slower rate than we've seen in recent years.