Spanish Property
Investing in Spanish Property
Updated January 2007
According to research conducted by BBVA Bank, foreign nationals bought 150,000 properties in Spain in 2003, which amounts to 15% of the estimated 1,000,000 units that were sold in Spain that year.
By 2007, demand for property in Spain by foreign investors will exceed 300,000 units per annum, forcing prices to levels higher than the present day - January 2007.
So significant are foreign nationals in the Spanish property market that they now own nearly 2,000,000 homes.
Of these homes, 800,000 are owned by British, 460,000 by Germans, 120,000 by French, 60,000 by Dutch, 40,000 Italian and up to 100,000 from the Scandinavian countries.
The remaining 25% of foreign property owners are made up principally of Americans, Canadians and a growing number of Eastern Europeans.
The majority of these properties are purchased as second homes, but significantly, 60,000 properties are purchased each year by foreign nationals who intend to live and work in Spain on a permanent basis.
This figure is growing. Spanish property analysts generally agree that property prices in Spain have grown by an average of 17% per annum since 1999, a near doubling of prices over a 5 year period.
According to TINSA, www.tinsa.es (one of Spains leading real estate valuation companies) newly built homes increased in price by 16% per annum between 2003/2004 with used homes appreciating 19% over the same period.
In real terms, by the first quarter of 2004 the cost per square metre of a new home in Spain was 1,682 euro while a second hand home was 1,389 euro.
Second-hand Homes
In the year up to the first quarter of 2004, the fastest growing areas of Spain were Murcia, Castilla-La Mancha, Andalucia, Valencia and Cataluna with growth rates of 25.83%, 25.35%, 20.61%, 18.95% and 18.95% respectively.
The average increase for the coastal south and east of Spain is in excess of 21% per annum, compared with just 14% for the rest of the country.
There can be no doubt that it is indeed the Spanish Costas that are the main engine of property market growth and with the Costa Del Sol increasingly being cited as the Florida of Europe, this trend is likely to continue.