Some on the Costa del Sol have been predicting a slowdown in spanish real estate yet people from northern europe continue to flock to places like the Costa del Sol and southern Spain in search of warmer climates and more secure investment opportunites.
Over the last 20 years or so Spain has seen some staggering rises in the prices of property, especially in the coastal areas. Areas like the Costa del Sol, the Costa de la Luz and others are seeing healthy growth and are often talked about enthusiastically on travel programmes in the UK and other countries and these tend to coincide with surges of interest in these areas. The Costa del Sol and Costa Blanca are two of the most popular tourist spots and consequently are prime investment areas for property. Property prices are relatively high in both areas but because there's such a huge demand for housing on both Costas and the fact that the UK housing market is fairly stagnant you can be fairly sure that if you put your money here its a pretty sound investment.
Investing in the Costa del Sol and Andalucia
The area of Andalucia (which includes the Costa del Sol) is by far far the most popular destination for foreigners and accounts for 40% of all tourist housing in Spain. The foreign property sector was estimated to be worth 3.5 billion euros last year, three times its value in 1995, while house prices have risen by an average of 90 per cent in the same period. Construction this year is estimated to have risen by 10 per cent with prices up by an average of 16 per cent. This has also greatly contributed to the creation of jobs with well over a million new jobs both direct and indirect being created in the last year alone as a direct result of the housing market.
Whose buying in Spain?
Britons make up the biggest national group by far buying property in the region of Andalucia, accounting for 52% of all foreign buyers, followed by the Germans (22%) and the French (8%). Recently Barclays Bank estimated that a million more Britons were already planning to buy property in Spain, joining around 300,000 who already spend all or most of the year on the Costa del Sol.
Off-plan opportunites Spain
Off-plan developments in Spain can also be a great investment and the returns can be phenomenal. Its not unusual to see a 60 - 70% return on your investment before the development you have bought into is even finished. Also, keep an eye out for distressed property sales; properties bought off-plan with the purchasers experiencing financial difficulties before completion can be achieved. This usually results in the property being offered at a substantial discount to what the property is actually worth just to get it off their hands.
If you are thinking of buying off-plan be wary of companies who offer to sell you property guaranteeing to rent it out for you once you have purchased. There are companies who are able to do this for you quite successfully but there are also others who can't and simply won't bother once the deal is done. Always check the background of the company you're buying from and if possible get lots of references.
For more information and advice on some of the issues discussed here or any other interest in property in Spain you may have please Contact us and we will be happy to help.
