There are strong signs of what could potentially be a spectacular turnaround for Spanish real estate as people’s faith in the market is slowly being renewed after an uncertain period over the past six years or so. According to the most recent statistics from Spain’s Ministry of Development, the number of properties sold in Spain during the first three months of 2015 rose by 4.4 percent compared to the same period last year.
Other positive indicators include the Spanish government’s plans to revisit projects such as the Tren de La Costa (coastal train) in Costa Blanca, proposals for part of the tram network to be modernized, and improvements to existing single line rail routes.
Alexander Vaughan, co-founder of International Real Estate Agency, Lucas Fox agrees that “a fast growing economy, falling unemployment, an increase in bank lending and a re-adjustment of property prices have combined to create unique buying conditions for oversea investors in Spanish property.”
According to Vaughan, “We are seeing a huge growth in what we call ‘Lifestyle Investors.’ They want to make a wise property investment (and) choose Spain because of the quality of life it offers.”
“As we have been saying for the last couple of years, the key for investors in Spanish property is to focus on location. The prices of properties in prime areas will recover first and now is a great time to take advantage of low prices and buy in the best micro-location you can for your budget.”
Many investors see the potential of buying a property to let as rental prices are slowly increasing. The increase in airport arrivals over the past 10 years shows that Barcelona, Malaga and Valencia are all consistently popular with tourists looking for short term property rental. Ibiza alone has seen numbers increase from 4.1 million passengers annually in 2005 to 6.2 million in 2015. Spain’s Balearic Islands has always been a tourist hotspot and Mallorca, its principle island, saw 9.54 million visitors arrive through Palma Airport during the first half of 2015—this was an increase of 2.9 percent. “More visitors arriving in Mallorca has had a positive impact on the island’s economy and has pushed up demand for second homes…” says Marc Pritchard, sales and marketing director of homebuilder Taylor Wimpey España.
Currently building phase two of its exclusive new development in the heart of the Golf de Andratx in Mallorca, Taylor Wimpey reports 50 percent of Camp de Mar Beach properties are already sold.
The Association of Property Registrars in the Balearics has reported a tripling in the number of foreign-bought homes and it is the luxury end of the market that is attracting keen interest, with 15 percent of purchases topping €500,000 (US$564,000). Unlike mid-market purchases, prime market properties are being purchased for either long term investment or for use as holiday homes.
Another popular area, Marbella has seen a growing interest amongst Middle East royalty and affluent US and Chinese buyers. It seems buyers are attracted to the year-round outdoor lifestyle, high quality services, vibrant restaurant scene, solid infrastructure and good international schools. In particular Marbella’s Golden Mile, including developments such as Nueva Andalucia, Sierra Blanca and Benhavis, is so popular that demand for property is outstripping supply.
Text by Joanne Pasquale
This article was originally published in the 2015 issue of Palace.