Where and why should I invest in the Spanish property market?

Why invest in overseas property?
Investing in overseas property has consistently gained in popularity, driven by the profusion of overseas property television programs and the growing awareness that we all need to take control of our future finances.

Many markets have emerged, or are starting to emerge, as more countries are joining or proposing to join the European community and of course in many of these underdeveloped countries the property prices can be so low in comparison to UK prices.

It should be noted however that many EU members may vote against future inclusions within the union. They are unhappy with what they perceive as excessive growth.

As a professional, investment orientated company, we are constantly monitoring new and emerging markets and below, you will find a summary of our thoughts, research and experience. Additionally, as I am sure that you view your overseas property investment seriously, we would strongly recommend that you study the findings of the Royal Institute of Chartered Surveyors (RICS). We have published their reports on the European housing market in an easy to follow form within our other info section. These independent reports, mirror our belief that the Spanish market is very much still the most buoyant Investment Property marketplace within Europe. Just click here to view!

Why invest in Spanish property?
We all know that the weather in the UK is not great and as a nation we need some sunshine from time to time, probably because we see so little of it. When the sun is shinning people are happy with their lives, but as soon as the sun disappears for a few days many of them are scouring the papers and travel websites for a sunny break. There are many locations around the globe that offer sunshine to those willing to get on a plane, but the first choice for many is the Spanish coast.

Spain still offers the most accessible, reliable and affordable sunshine available, always an important factor when considering purchasing and renting a holiday home, or retirement property, a factor that ensures future growth. You can even drive here if you can’t find a plane to catch.

In addition it is the most southerly location in Europe that can offer anything like the modern infrastructure, accessibility, facilities, standard of living that will be demanded by future purchasers.

Property prices are increasing constantly and historically Spain has always been a low cost investment area with abundant cheap properties available. Our view is that this will change within the Spanish coastal strip, an 80km wide strip from the Costa Brava to Huelva, just below Portugal. The IPS opinion is that Spanish property values will move up a level in comparative pricing between other European countries and in the future will include some of the most expensive real estate available.

Prices and perceived status can change and in the future years we believe that value for money will be a past condition. The reasons for this are clear and not least of which is the constant stream of transients of all ages permanently moving to and holidaying in Spain from all over Europe. It is commonly forgotten that property is not just sold to UK citizens.

An increasing demographic moving to Spain do so permanently, citing the climate and quality of life as the major motivators alongside a first class health service as well as lower taxation. As communication speed around the world improves through broadband workstation location ceases to be important, freeing many more families from their need to be “where the work is”. Unemployment levels are good, there is a stable economy the cost of living is low and politically there is not much chance of a nasty surprise.

Another point to remember is that the Spanish populace buy property as well and their market is growing, in particular the rising first time buyer demographic that are now choosing to leave home and seek independence from the family, traditionally they would stay with the parents until much later.

Where in Spain should I invest?
Spain as an overseas and holiday home location was really established when it joined the EEC some 20 years ago. Most of the development was centered on the Costa del Sol and primarily the area around Marbella. Many, many people have invested in and around these areas in the Costa del Sol making tremendous profit on their investment.

The most spectacular growth in this region occurred between 1999 and 2004 and it was only in the later part of this period that the decline in the market within this particular area of Spain became apparent.

This slowdown and adjustment in values was necessary as property and land prices in this area had left the rest of coastal Spain in its wake and market realignment was inevitable as the disparity was unrealistic.

As this region slowed, other parts of Spain started to fit its profile before the boom and improved rapidly on their already steady growth, people are simply now buying elsewhere.

Some other locations that are established as main tourist areas in Spain have since had major growth and regions like Murcia have become equally well known. It is these areas of Spain that IP Spain specialise in, namely parts of the Northern Costa Blanca, the Southern half of the Costa del Azahar, specific areas of Murcia and Lanzarote in the Canaries.

Why is the growth now occurring in these areas? They have a climate not dissimilar to that on the Costa del Sol, so unsurprisingly it was only a matter of time before the local amenities and infrastructure improved in much the same manner. The natural beauty in these areas is very much still evident and many would argue far superior to that seen elsewhere in Spain.

Other important factors to consider are their climate, they have some of the best beaches in the country, low budget airlines fly from most airports in the UK to Alicante, Valencia and Murcia, San Javier, with a new international airport under construction in Murcia at Corvera and another planned at Castellon, north of Valencia, in addition they benefit from fantastic infrastructure with good roads, motorways, and train services.

IPS are centrally located to these areas and are able to monitor trends and find emerging areas which will enable our clients and indeed ourselves to obtain much better than average returns. We have after all a direct financial interest in finding the best projects as we are property investors ourselves.

There is a growing trend to move inland from both the northern Europeans that are relocating to Spain as well as from an earlier wave of retirees and relocated residents that are seeking a more Spanish environment in which to live.

At the same time towns and places of interest that for various reasons missed the touristic boat before are being discovered and launching themselves onto the market, usually because of an improvement in the road network and access.

So, how do the new emerging markets compare?
Historically the most dynamic overseas market has been Spain and it is very interesting to make comparisons based on the trends established in the Spanish marketplace with emerging markets.

When new markets start to develop and the property prices appear to be extremely good value two questions to ask as an investor are: who will I sell to and who can I rent it to, another is how many months will I be able to rent the property for?

The answer to these questions can often be found by asking the following:-
1 - Will the climate encourage people from other parts of Europe to want to holiday or live there?
2 - What standard are the local amenities and infrastructure?
3 - Will the local population be able to afford to buy or rent the properties?
4 - Is the availability and cost of flights an issue?

As the emerging markets stand at the moment, we could not predict the resale and rental potential with as much confidence as we can within the areas of Spain in which we operate.

Disclaimer
The information in this website is provided by IP SPAIN and whilst we endeavour to keep the information up-to-date and correct, we make no representations for warranties of any kind about the completeness, accuracy and reliability with respect to the website or the information within the website. Any reliance you place on such information is therefore strictly at your own risk. If you have any questions about this website or the services we provide please feel free to contact IP SPAIN.