Saturday, May 10, 2008

Overseas investors should consider Spain's regional variations

The Telegraph stated that Spain has a fully developed property market; there are massive regional variations which can often give the wrong impression and people should consider the property market in Spain as places with different trends and attributes.

Spain is a diverse country and there are big regional variations where local supply and demand forces have a big impact on growth. The local dynamics can have an effect on performance more than common market forces. Real estate prices increased most in the province of Granada (8.5%) and Murcia (8.1%), and followed by Madrid (1.8%) and Alicante (3.3%).

According to Kyero.com, a leading Spanish property portal that publishes a Spanish Property Price Index has reported that asking prices fell by 2% in 2007 and the average asking price for 2-bed properties fell by 8.3% while asking prices for 4-bed properties rose by 3.8%. Figures from Sociedad Tasacion, one of Spain’s largest appraisal companies shows that average new build prices in Spain’s provincial capitals increased by 5.1% in 2007.

Property prices on a quarterly basis (when comparing Q4 2007 and Q1 2008 till March) has increased in certain provinces like Huelva (3.9%), Seville (3.6%), and 3.4% in Valencia, but fell in certain places like Murcia (-0.2%), Alicante (-0.8%), and Castellon (-1.3%). So Overseas property buyers should do their homework and consider regional variations in the Spanish market.

The Telegraph has reported that overseas property buyers consider Spain more of a "lifestyle destination", which means that people chose to purchase property there in order to enjoy themselves rather than reaping financial rewards. Spain continues to appeal for the overseas property investors for its beautiful coastline, sunny weather all year round, easier accessibility and a significant ex-pat community who are well catered for. There are enough fundamental reasons for the overseas investors to continue to enjoy Spain and many of the economic pointers look good.

Paul Bradley, spokesperson of Spanish Property Owners Guild remarked about Spain’s appeal that it will always continue to be popular.

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