Spanish Property Investment Advice

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

Posted on 11 August 2006

Spanish Property Value up 10.8%

New figures from the Spanish Ministry of Housing show that property here has risen by 10.8 per cent over the 12 months to the end of June. This is still very solid and much more sensible than some of the price rises we were seeing a while ago. The best locations - close to the beach, near to excellent amenities and in up and coming hotspots, are currently selling very well which bodes well for the future. As with other markets, there is a lot of oversupply in places but buyers seem to be becoming much more cautious in these locations. Cautious? I would run a mile! Supply and demand drive the property market – you can’t buck the supply-demand mix, it’s as simple as that.

We are starting to see more problems with some new developments. In Tolox, part of the Malaga province in Spain, Building permits for four developments of approximately 1,000 homes are being cancelled. These are developments that are planned on land that is not zoned for residential construction. I have asked for more details. It all goes to show that you do need to do your due diligence, get independent advice on the spot, check the legality of developments etc and, if you have any doubts, simply walk away.

The recent statistics from the Spanish National Institute of Statistics show that 3,880,000 of the official population of 44,390,000 million are foreigners. This represents 8.7 per cent. That figure is up from 2.2 per cent in 2000. According to consultants Analistas Financieros Internacionales, foreigners will buy 170,000 new homes in Spain in 2006 so it will not be long before the magic 10 per cent figure is reached. If you are an offplan flipper who buys in early and sells on late to follow up Brits, you will want to know that the Baleares have the largest make up of foreigners at 15.6 per cent. Valencia, Murcia, Cataluna and Madrid are next in line. Extremadura and Galicia y Asturias have the lowest numbers at only 2.5 per cent of the population. Those who bottom fish, of course, may look more closely here on the basis that these numbers can go only one way – up!

All for now

Iain Maitland

Return to Iain's home page