History Tells Us

Spanish Property

ABOUT SPAIN

Steeped in history, culture and tradition, Spain conjures up images of beautiful beaches, art and classical architecture and a passion for life – whether for football, dance or bull fighting. If you like to explore gothic cathedrals, enjoy food and local wine or relax in the Mediterranean Sea, it is easy to see why over 50 million people visit Spain (the second most visited country world, after France) every year.

Located in southwestern Europe, Spain has borders with Portugal and France but is otherwise surrounded by the Mediterranean Sea the Bay of Biscay and the Atlantic Ocean. Spain enjoys a warm and sunny weather for most of the summer and some areas in the winter months. In addition to Mainland Spain, Balearic Islands (Ibiza, Menorca, Mallorca) and Canaries (Tenerife, Lanzarote, Gran Canaria) are popular destinations for tourists.

The Iberian Peninsula was occupied by the Romans in the second century BC and the region of Hispania was formed. In the eighth century, Berber Muslims (or Moors) conquered all the peninsula and a large number of Christians, Jews and Muslims lived in close proximity. It was not until 1492 that Spain became a Christian country (now predominantly Catholic). That was also the year that Christopher Columbus, financed by Queen Elizabeth, discovered the "New World" and the Spanish Empire was one of the most powerful in the world. Spain had a large number of colonies in Central America and Mexico and many modern states of the USA

End But the 19th century, Spain lost its colonies in the Spanish-American and not an instability resulting in the Spanish Civil War (1936-1939) with a dictatorship established by General Franco. It was not until 1975 (on the death of Franco) Juan Carlos (grandson of King Alfonso XIII) was named successor and Spain became a democracy.

Despite a constitutional monarchy, Spain has a number of regions (17 regions and 2 autonomous cities), all with different identities and stories and in some cases – languages. People in these regions of Catalonia, the Basque Country and Galicia, refer firstly, the region and then another part of Spain.

Real-estate market

In recent years there has been a large increase in the number of foreign investors buying property in Spain, either as second homes or primary residences. In 2005, there were about 3.7 million foreign residents in Spain that shows the popularity of country immigration. There are large communities of British, Argentine, German and Bolivian residents in the country.

The country has long been a place of holiday favorite, with Britain among the most frequent visitors. Among the types of available properties, apartments, holiday homes and villas have been most popular. The direct comparison with the weather and climate in the UK offers the perfect place for summer vacation or retire somewhere in the past years – with many older people in the UK have the opportunity to emigrate to Spain after retirement.

After historical periods volatility, the Spanish economy has been fairly stable for some time, and relatively low interest rates more measures to encourage investment internal. While Spain is a vast land of different terrain, the transport system is easily accessible by car, plane or train. As the number of visitors is expected to increase significantly in coming years, increased investment in infrastructure is essential and in the hand.

The expected influx of visitors ensure a strong demand for property, and under a careful program of new construction, demand always exceeds supply. Although there was a large increase of 17.5% in the price of residential property in the second quarter of 2003 (compared with the same period in 2002) this rate is unsustainable. Provided a more gradual return for the coming years, with little potential for lower in the short and medium term.

The government recently announced that the reforms aim to increase the purchase Rental market share from 11% to 20%, freeing up some pressure from the market to purchase. Some 3.1 million vacant homes are going to enter the market, which would also relieve some pent up demand experienced in recent years.

Why invest in Spain?

Unlike countries like the United Kingdom, where the stock market investment is very popular, Spanish residents have spent a great part of their market investments values to direct property investment.

There is no doubt that the Spanish economy is driven by the holiday market, and Spain has been a place popular for many years. As property prices in the UK have shown dramatic increases in recent years, many are changing in the Spanish market offering better value for money. This constant flow of visitors has also fostered a profit rental market, with attractive returns available including in coastal areas.

As prices of coastal assets have shown a good growth in recent years the effect begins to extend inland, where the calm and quiet regions are proving to be popular among the older generation. So if you are looking for the vibrant, busy or a quieter, slower pace of life, there is something for everyone.

Perspective

While the property returns seen in the last 10 years are set to slow, many are predicting a strong housing market more controlled, with a constant demand to ensure an upward trend in the foreseeable future. In There are currently a number of long term property developments in progress and flatten the supply and demand trend line. Doom and gloom predictions for the sector Spanish property appears to be wide of the mark.

Spain really has something for everyone, whether you are looking for architecture and art museums of Barcelona, energy nightlife of Ibiza or the quiet life of Fuerteventura. Foreign investment in the housing sector continues to grow and is the main driving force behind the growth in the sector.

The buy-to-let market is also attracting much interest as the trend for holiday homes abroad continues. After the emergence of low cost airlines, is now so quick to travel to Spain, as it would travel far in the United Kingdom.

About the Author

The author of this article moderates at Totally Property – a
Real Estate Forum
that specialises in
Spanish Property
.