Spanish Property Investment Advice 

Brought to you each week by our property expert, Iain Maitland.

Posted on 05 May 2006

The Spanish Property Market Has Been Booming Since 1998

According to an analysis of European housing markets by the Royal Institution of Chartered Surveyors, the Spanish property market has been booming since 1998 and there are no signs of an imminent slowdown. Annual house price inflation was at 17 per cent in 2004, 15 per cent in 2005 and is tipped to be in low double figures for this year. All very encouraging but, of course, much depends on what you buy, where and what you plan to do with it! You need to know where not and where to buy!

The Costa del Sol remains hugely popular with Brits. Yet the same report reveals that the top end of the market here remains in an over-supply situation which is close to saturation. Those that move down through the market can pick up bargains there too, although the yields are as low as 2 per cent in some cases. As with almost all property markets, supply and demand are the keys and this part of Spain has experienced intensive development not just on the coast but inland as well. Most of the money now seems to be going inland rather than along the coast. Those looking to buy here for an investment need to number-crunch their likely appreciation, yields and eventual returns.

The Costa del Azahar is looking much more promising. Investment is pouring into Valencia thanks to its relative affordability and improving attractions and facilities. Castellon is seeing new developments as supply seeks to meet rising demand. This demand is likely to accelerate with the airport developments there generally making the area much more accessible to the Brits. The area generally shows potential.

I am seeing lots of reports about Spain lifting restrictions on the entry of workers from the 2004 European Union accession states and how this will trigger a further boost to the Spanish property market. It will, but it is important to bear in mind that most of the workers coming across will be manual workers who are being employed to do what might be described as the dirty work on building sites etc. As such, they are going to be looking to rent low-cost property in those areas that are seeing the biggest developments. Something to think about if you are planning to invest at the lower-end of the market in Spain.

All for now

Iain Maitland

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