Spanish law targets property speculation
May 28th, 2007
Come 1 July, Spain will have a new land law aimed at part in curbing ‘exorbitant house prices’.
Passed by Spain’s upper house of Parliament, the Bill targets speculators and planning corruption by requiring disclosure of all owners of land being developed in the previous five years within official documents. Local government officials will also have to list their land ownership.
There will also be tougher tests imposed on developments likely to increase a town’s population by more than a fifth. Meanwhile within major developments, 30 per cent of new housing will have to comprise affordable housing.
Some planning decisions taken in the last two years will be open to review.
Housing Minister Maria Antonia Trujillo said he believes the measures will ensure a ‘soft landing’ for the property market.
Introduction of the law follows a series of planning scandals in Spain, notably in Marbella but also in other towns, worries about over building, and, more lately, about the price of housing.
Gary Weston of Murcia specialist Weston & Dubois, which operates investment purchase plans tailored to fly to let buyers, said the new law is a ‘step in the right direction’ and a step away from corruption. Requirements for social housing and availability of Government subsidised mortgages would help younger Spaniards get a foot on the property ladder but other than increasing confidence, would be unlikely to have direct impact on the market for overseas investors, he said.
‘There has been oversupply of properties, especially in developments sold specifically to investors who had no intention of completing. The result is that hundreds of identical properties come onto the market at the same time.
‘My advice to investors is always to look for phased developments with distinct differences between the properties in each phase’.
Despite recent fears over a slump in the Spanish stock market and continuing battles with the Spanish authorities over ‘land grab’ laws, Alicante in eastern Spain has seen a 9 per cent rise in property prices since January 2007, the English language Spanish property portal Kyero.com has reported.
The average price of a property in Alicante province now stands at £170,600, equalling the Spanish national average. Average property prices have been rising steadily since the beginning of the year, said Kyero.com managing director Martin Dell. ‘Compared with the national average property price increase of 2 per cent in the same period it is clear that demand is and will remain high in Alicante province. Some 20 per cent of all foreign property sales in Spain were located in Alicante in 2006 and I see no reason why
this should reduce in 2007’.
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