Recently there has been a growing trend especially amongst the Brits to invest in property in Spain, as I know from when I owned an estate agents in the town of Javeadealing with Costa Blanca houses for sale, but given all of the financial woes that the country have experienced in the last half dozen years, the question has to be asked whether these investments are of the wise plain sailing nature or if it is more of the case of the pain in Spain?
At one time not so long ago, Spain enjoyed something of a real estate boom as we all flocked to their coast seeking Spanish villas for sale for our holidays, or maybe Spanish towns for retirement, leading to increased demand for over a decade. Years of demand then suddenly turned into years of misery following the credit crunch as high levels of overbuilding coupled with the constant problems with the Euro gave way to woeful economic angst and plenty of horror stories.
The good news is that the Spanish government have not rested on their laurels and have worked hard to attract us back to their sunny Costas and promote the many bargains available. The authorities split the real estate market into two sectors with one reserved for all their Prime Property – this is where the Spanish banks that are desperate for cash have retained the most desirable properties with the best locations.
On the flip side is the Sub-prime Property where at the demand of the EU the not so desirable properties have been put into what has been referred to as the Spanish ‘Bad Bank’. The aim is for these properties to be sold off with very heavy discounts within the next decade and a half. The policy has paid off as the last couple of years have seen an increase in the level of Brits once again jumping on the property ladder and grabbing a bargain with the country offering some of the lowest prices seen in twelve years.
So prices may be low, but the question still remains on whether buying the properties are a good investment – especially if you are looking to buy spanish property to let. The answer is yes; providing you know exactly what you are doing as without a good knowledge of the Spanish property market your investment may become very vulnerable. Location is key to a good investment – constantly improving transport links can add to the attractiveness of the investment – and prices vary greatly in different regions. There are many spanish towns in which to live regardless of your age, or the lifestyle which you’d like to lead. Long term investments on the Costa Brava especially in some of the best parts which have not suffered from the curse of over-development are starting to look quite good, but the cost of property on the coast has started to force more investors to turn their interest more inland. There are also notes of caution to consider such as increased VAT on new buildings and changes to tax relief that mean the debate will continue but the current low prices in some parts of the country will make it hard for potential investors to resist.