Buying property in Spain
- Credit: Archant
With sales soaring by 56 per cent this year compared to 2011, now’s the time to pick up a Spanish bargain
With Spain starring in many a ‘nightmare property’ headline or TV programme, many buyers have been put off investing there. However, with prices having dropped by as much as 50 per cent, there some amazing bargains to be found.
As ever, location is the key to a successful purchase and well-presented properties are becoming increasingly sought after again.
According to foreign exchange specialist Currencies Direct, purchases in Spain are rising at their fastest rate for three years – up by 25 per cent compared to 2013, and by 56 per cent since 2011.
The strong pound and low prices is proving a winning combination, with purchases over £250,000 up by 21 per cent year on year.
“For the last 18 months, the pound has strengthened against the euro, making Spanish property more affordable and boosting buyers’ confidence,” says Phil McHugh, trading floor manager at Currencies Direct.
“That’s almost certain to continue in at least the medium term, making prices progressively lower,” he adds.
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Recent pension changes have also fuelled interest, with many people keen to invest their pension pot in overseas property. Residential property prices in Spain are starting to nudge up again, however – they rose by 1.15 per cent in the third quarter of 2014 compared to the same period last year, according to the Property Registrars.
This is the first time their index has shown an increase since the Spanish housing bubble burst.
British buyers were the strongest non-Spanish nationality, buying 1,886 properties in the third quarter, up 37 per cent on the same time last year, followed by the French, Russians, and Germans.
Building has started up again too, despite hundreds of thousands of properties still standing empty, remnants of the pre-crisis building boom when around 700,000 houses were built annually, more than in Britain, France and Germany combined, and almost 1.9m people were employed in the building sector.
Although this figure has dropped to under 700,000 the tide is turning as, according to employment ministry figures, some 10,000 jobs were created in November. Furthermore, Prime Minister Mariano Raja’s budget for 2015 includes an increase of around six per cent for infrastructure projects.
Developments that were built but never sold, as demand dried up, may offer opportunities for investors or would-be holiday home owners to pick up a property at a fraction of the cost they were originally marketed at. In recent years it has actually been possible to buy a new property for less than it cost to build. The key is to choose your property wisely – after all, no one wants to end up on a ghost estate with struggling infrastructure.
Bargains also include repossessed properties owned by the Spanish banks. Interestingly, the recent uplift in values has been driven by resale properties with 52,127 sales, almost double those of new-builds at 27,434, although this is not surprising when you consider the number of new developments on the market.
5 reasons to choose Spain
1 A better climate, both for health and outdoor activities, such as golf, tennis or sailing, which can be practised year round
2 Cheaper property: with experts generally agreeing that the market has bottomed out, there are some amazing bargains to be had
3 A lower cost of living means wages and pensions can be stretched further
4 Great food: who doesn’t love a table full of tapas
5 Cosmopolitan vibe; strong British networks combined with expats of all
nationalities and Spanish locals