Spanish property market fuelled by foreign investment

18 February 2007

The real estate market in Spain is undoubtedly its most dynamic economic sector. Investment by the million or so foreigners over the last decade, has lead to a very fruitful marketplace for both the second home seekers and the serious overseas investors.

Much of the interest it has received was no doubt started with a traditional holiday visit, attracted by the low cost of living, sunny warm climate and endless beaches, visitors from all over Europe flocked to its shores to find the property prices bordering on ridiculously low. With nearly 800,000 new apartments and villas constructed between 1990 and 2005, property was not in short supply, but the demand has not waned ever since.

With the 50 million visitors to Spain every year from all over the globe, Principal International, a leading overseas property investment company say that the attraction of sunny Spain still continues for investors, as there is never a short supply of customers for short or long term lets.

New research shows that buying property in Spain is much easier than buying in the UK, so it’s no wonder that it still ranks as one of the favourite investment capitals of Europe. With the recent announcement of tax cuts for foreign investors, the Spanish government has publicly reinforced its support for foreign cash, and despite the reducing volumes of construction throughout the country, overseas investors still continue to seek out the bargains.

With the prices in Spain reaching a healthy 11% rise in 2006 compared to 10% in the UK, and the 3.5 billion Euro foreign investment in the property market in 2006, Principal International say that investing in Spain is almost a guaranteed winning situation.