Real Estate Market

One of the most important investment measures carried out by the Spanish government is supposed to be the liberalization of the real estate market allowing the market entry of foreign investors. Because of the warm climate hundreds of thousands of foreigners, mainly Brits and Germans, have decided to buy a house and settle down permanently in Spain. This immense influence stimulates the local tourist and real estate business.

According to a study of the Spanish BBV Bank 150.000 houses are bought by foreign residents in Spain every year. This adds up to 15% of the whole real estate business. Recently, the number of business transactions on the Spanish building market has been doubled, although a backwards trend in the metropolitan areas is already expected.

The Spanish newspaper “El ABC” even claims in an article (June 13th, 2004) that about 1.8 million Spanish houses belong to foreign tourists being attracted by the climate, the low property prices, and the life quality. An increasing number of tourists purchases a second home in Spain (about 90,000) and the number of immigrants living, working, and buying houses increases as well (45,000). Most of the homes which are acquired by European tourists lie next to the coast. The price difference between coast and inland properties is enormous.

In spite of the worldwide economic stagnation the demand for properties at the Costa Brava increases constantly and exceeds the offer. The consequence has been a continuous price rise between 15 and 20% during the last years.

Experts expect the real estate market at the Costa Brava to be stable for vendors and buyers. A current study carried out by the Advanced Management Services Group (AMSG) expects 800,000 new European clients looking for property in Spain until 2010. This should guarantee the future success of the local real estate market.

Cadaqués belongs to the Costa Brava and is one of the most expensive areas in Spain and benefit from the neighbourhood Baix Empordá. A square meter in a luxury apartment may cost between 3,000 and 6,000 Euro whereas a square meter in a detached villa can cost between 4,100 and 7,800 Euro. A medium-sized villa costs about 900,000 Euro. The price increasing rate was 30 to 38% between 2000 and 2003.

For decades, most of the foreign residents were German- in peak times up to 65%. Due to the bad conjuncture in Germany many of them tend to sell their objects. Thus, the properties are mostly in a good condition. Additionally, many infrastructural institutions are multilingual (doctors, shops, and craftsmen). Beside German customers there are many French and local people interested in houses as well as other nations e.g. Russian, Dutch, Swedish, British people. The prices used to increase and have reached a high level. Compared with other Spanish regions the prices are still apt because of the unique character of the settlement.