Growth in Spain starting to slow
November 19th, 2004
According to the Bank of Spain, foreigners bought almost 100,000 holiday homes in Spain last year, spending a record 7.2bn Euro.
Foreign demand for a second or retirement home on the Spanish coast is still there, but there are signs that growth is starting to slow. New housing starts this year are forecast at 585,000, down 15 per cent year-on-year. Some property developers are starting to follow the bigger operators abroad. Confronted with increasingly squeezed margins at home and diminishing tracts of beachfront land, they have crossed the border into Portugal.
In the future, developers will also have to abide by tougher environmental regulations as regional and local authorities follow the lead of Lanzarote, one of the Canary Islands, where a 10-year moratorium on tourism-related construction has been in force since 2000.
A recently-completed study concluded that Lanzarote’s economic sustainability would only be assured through refurbishing and improving existing tourist infrastructure, preserving and promoting the island’s unique ecosystem and recovering traditional industries such as agriculture and fishing ..
From the Financial Times special report on Spain 2004 (subscription required)
