Real Estate Market in Roses

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.