Property News

Increasing Investment in Spanish Property

Em Morley - May 29, 2015

This year has not been good for the euro, with sterling showing signs of great strength. It is therefore no surprise that 200,000 more Britons are considering investing in the Spanish property market.

The latest Spanish Property Market Confidence Index (SPMCI) from Spain’s primary property portal, Kyero, found that about 71% of estate agents in the country had more confidence in the market in the first quarter (Q1) of 2015 than the previous year.

Including 160 English-speaking and 216 Spanish-speaking agents in Spain, the study revealed an optimistic attitude towards the market from the English speakers.

Increasing Investment in Spanish Property

Increasing Investment in Spanish Property

Director of Kyero, Martin Dell, comments: “The strength of sterling has played a key role in the confidence divide that we are seeing currently between English-speaking and Spanish-speaking real estate agents in Spain.

“Some 30% of English-speaking respondents have highlighted stronger sterling as the most significant change over the past few months. For Spanish-speaking agents, increased marketing tops the table of significant changes, with 26% of respondents flagging this up as the biggest change.”1

It is clear that there has been further marketing to British property investors this year, with agents offering complete investment packages in coastal resort areas.

Properties that were taken off the market months ago have been brought back with huge discounts, with some offering up to 110% loan-to-value (LTV) mortgages.

Professional management firms are releasing homes back onto the market in an attempt to attract British investors. To still earn healthy profits, companies are using agents on a time-sensitive, volume sale basis.

Despite it being a great time for British investors to buy Spanish property, experts expect them to wait a while to experience any marked capital appreciation. Many areas on Spain’s southern coastline have become swamped by empty, half-finished developments, often owned by banks.

When these are completed and sold, the offers and low cost mortgages provided restrict any property price growth.

However, for experienced investors, a simple purchase is straightforward. Record high numbers of tourists are visiting Spain, causing almost guaranteed rental income in resort areas.

British buyers purchasing the right property in the right place will enjoy healthy returns.

However, investors should note that agents are pushing British buyers to act quickly. Always remember to research, calculate and take your time before buying. There are so many properties on Spanish banks’ books that the bargains are set to continue for some time.

It is also unlikely that there will be huge price growth in the next two years, as there is a substantial oversupply of homes.

1 http://www.propertyshowrooms.com/spain/property/news/agents-report-rising-investor-demand-for-spanish-property_313419.html