The Latest Spanish Property News from Kyero.com

Demand for properties in Spain continues to ride high, with a steady stream of foreign investors looking for bargain holiday homes or buy to let property ventures while Spanish nationals remain keen on purchasing second homes in out of town locations. As a result, the construction of new homes in Spain is continuing apace, and the country is experiencing a strong property boom at odds with less encouraging trends in many other European countries. Last year saw 700,000 new builds in Spain, more than was recorded in France, Germany, Holland, Belgium and Luxembourg combined.

Positive as this may seem, concerns are mounting that over enthusiastic developers may be in the process of over supplying the market, ultimately contributing to a possible market crash. But the stats suggest otherwise. According to new figures the Spanish construction sector grew by 6.1 per cent in the first quarter of the year in comparison to 2004, posting the strongest performance since 2003.

It is thought that strong demand from migrant buyers for cheaper properties is helping prop up the market overall, the Spanish population having seen an influx of some four million foreigners since 2000. Linked to this is the fact that growing employment rates are helping boost demand for housing, there having been half a million new jobs created last year.

Commenting on the vulnerability of the market to rising household debt levels, Erkki Liikanen, a member of the European Central Bank’s governing council, told the Financial Times: “This is one of the issues that must be analysed. When you have had a long period of low interest rates and long maturities, it is important that people take into account the possibility of higher interest rate levels.”

Full story at Assetz News