Is Spain Europe's California?
March 8th, 2007
Property expert Mark Stucklin analyses the state of the Spanish property market.
Foreign investment in Spanish property hasn’t lived up to the optimistic forecasts of just a few years ago, when ‘experts’ predicted that Britons and other Europeans would increase spending every year.
In reality, foreign investment in Spanish real estate has fallen since 2003, and by the end of May was some 33 percent below the level for the same period in 2003.
Nevertheless, I still think there are good grounds for optimism about the future of the Spanish property market, at least in those areas popular with foreign buyers.
European baby boomers officially start to retire this year, and will continue to do so over the next 20 years.
With the right financial advice millions of them will be able to afford a place in Spain, and I’m confident that many of them will end up buying into Spain’s higher quality of life and lower cost of living, where pensions go that bit further.
Though I see plenty of evidence that today’s buyers are more cautious then they used to be, I see little evidence of demand for Spain’s lifestyle evaporating.
I still expect significant problems in short term, and I think a few agents and developers might go out of business before the smoke clears.
But it’s still early days for Spain as the California of Europe, and looking 10 years ahead, I can only see it becoming more popular.
Foreign investment in Spanish property continues falling.
Foreigners spent EUR 1.962 billion on Spanish property in the first 5 months of the year, 13.2 percent less than a year ago.
10m want to quit ‘over-taxed’ UK
One in five Britons – nearly 10m adults – are considering leaving the country amid growing disillusionment over the failure of political parties to deliver tax cuts, according to a new poll by ICM.
Euro base rates and Euribor continue to rise
The European Central Bank (ECB) raised base rates from 2.75 percent to 3 percent at the beginning of August, citing concerns over inflation.
Consequently Euribor – the rate used to calculate interest payments for most mortgages in Spain – also rose in August to 3.615 percent, the 11th consecutive monthly increase, and the highest rate since July 2002.
One in eight homes are bought by foreigners
The latest figures from the Spanish government show that foreigners bought
31,342 Spanish properties during the first quarter of the year (January -
March 2006), which amounts to 13.4 percent of the total number of properties sold in the period (233,670).
Tighter regulations on the way for estate agents in Spain
The Spanish press reports that María Antonia Trujillo – Spain’s Minister for Housing – hopes to introduce new regulations for estate agents by the end of the year.
Trujillo wants to tackle the speculation and abusive practises
plaguing the sector, and increases legal protections for consumers.