Spanish Property Investment Advice 

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

Posted on 21 April 2006

Murcia - Biggest Property Investment Hotspot in Spain

Biggest up and coming hotspot in Spain? Murcia is being tipped more and more often by those in-the-know insiders who profit most from Spanish property investments. There are many attractions, not least its relative affordability. Using the price per square metre approach which is popular in Europe but less so here, you can buy property in Murcia for an average of about 600 euros per square metre. That compares favourably with the latest stats coming out of nine Spanish cities where the average price per square metre is more than 6,000 euros. The nine cities are Sevilla, Oviedo, Zaragoza, Madrid, Barcelona, San Sebastian, Bilbao, Marbella and Santander. Of course, we need a trigger and that is the Corvera International Airport which will be operational from 2009. 1.5 million passengers are expected in its first year, with this number rising within about three years.

Those of you looking at mortgages and remortgaging will be interested in the recent comment that came out of the recent meeting of European policy makers from European Central Bank council member Guy Quaden. He says that eurozone interest rates will be raised gradually to curb inflation. With rates at 2.5 per cent, the clever money says that there will be a 0.25 per cent rise to 2.75 per cent in June with an end of the year figure being 3.00 per cent or even 3.25 per cent. I tend to look at the currency markets who are usually working up to eight months in advance and they seem to pricing rates up to 3.25 per cent by the autumn and 3.5 per cent by Christmas. Whatever the exact rate, the trend is up so plan accordingly.

There are a lot of news reports in the British press based on a report from Analistas Financieros Internacionales, the Madrid consultancy. The bottom line is that some 170,000 homes will be bought in Spain this year by immigrants and this represents about 25 per cent of the total demand for property. There are lots of stats spinning off this but, for me, the main message that comes over loud and clear is that this alone will keep the Spanish property market afloat in the short- and medium-term. I am also seeing reports that the divorce rate in Spain is rocketing following the new fast track divorce law introduced last year. There has been an 80 per cent increase in divorces in the year. Those 87,000 divorces are generating an additional demand for a further 140,000 additional homes. Again, all good news!

All for now

Iain Maitland

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