Encouraging a fresh perspective on Spain real estate was the goal of last week’s visit to the UK by Spanish Housing Minister, Beatriz Corredor, and Minister of Development, Jose Blanco. The trip, labelled a “property investment roadshow”, was the first in what will be a series of promotional visits by the Ministerial team. With a quarter (23.4%) of all property purchased by foreign investors in 2010 coming from the UK, Spain prioritized Great Britain for its initial roadshow leg. This will be followed by forthcoming tours planned for France, Germany, Holland, Sweden, and Russia.
The trip did receive some negative feedback from those who had previously been burnt by investment in Spanish property. Notably, some of those who had lost money in 2007 and 2008 in illegal property deals in coastal areas were quick to flame forums and news reports with details of their experiences. Other forum correspondents balanced the view with reports of their own successful property investments and at times relocation to Spain. The common elements for those who had lost money were using lawyers and real estate services with limited English/Spanish translation skills and where the full details of the housing deals had not been properly documented. Using a comprehensive real estate service such as that offered by Lucas Fox – with everything from support during your first visit to Spain, connection with relocation services, and access to bilingual lawyers and accountants – is a protection against these risks. Housing Minister Beatriz Corredor noted that housing problems represented only 1% of Spain real estate trading amongst Britons, but all the same was devastating for those impacted.
The trip occurred in a week of busy discussion about the current potential of property investment. From comments by the Ministers and from online sources, Lucas Fox has identified 15 reasons why now is a good time to consider property investment in Spain real estate.
Comments from Housing Minister Beatriz Corredor start our list with 3 enhancements she noted will safeguard those looking for real estate in Spain:
1. Regulations now ensure that new developers provide all paperwork showing building consent and zoning approvals to potential buyers.
2. A sales register with legal status of all properties is now available online, with an English version to be launched later this year.
3. A new police team and special prosecutor have been established to prevent planning corruption.
Minister of Development Jose Blanco added another 6 reasons to consider property investment:
4. Spain is a safe country with low levels of crime and danger.
5. Its proximity to the UK make it a great alternative base with easy access.
6. Spain’s weather and stable climate make it a fabulous holiday retreat if your property investment is also to double up as a holiday home.
7. Spain’s quality of life is high, with Spanish cities like Barcelona and Madrid ranking high in the world’s most liveable cities and with coastal areas envied by countries around the world.
8. Spain offers a full range of public services that are accessible to all European residents.
9. Spain’s infrastructure is world-class, including an extensive fast train system across the country, world leadership in use of renewable energy sources, and commercially efficient port and air terminals.
In a week in which Ministers Corredor and Blanco were talking up reasons to invest in real estate in Spain, Wall Street columnist Brett Arends wrote more generally about why now is a great time to look at property investment:
10. “Prices are cheap.” This is definitely true of Spain, where investors can take advantage of bargain prices. Recent years have dropped free-market housing prices by an average of 15.4% (20% in real terms) according to the Spanish government.
11. “Banks will have to sell.” Arends’ point is a key motivation for the roadshow. Bank ownership of property slows the national economy and re-releasing properties into the market is needed to reduce the weight of housing overstock on the nation’s economic engines. This means it’s a buyers market as banks are keen to offload their housing portfolios.
12. There is a good rental yield potential: In some areas, purchasing real estate in Spain can start earning income as rental property. Holiday rental demand has increased by 20% this year according to some holiday rental specialists, mirroring increased Spanish tourism levels this first quarter of 2011.
13. While Arends is focused on the US property market when he says that there are cheap mortgages available, the same can be said for Spain, with banks jostling to create new loan packages for savvy investors.
14. In his Wall Street Journal column this week, Arends has reminded his readers that real estate is a good long-term protection against inflation, noting that traditionally real estate returns on average 1 or 2% above inflation.
15. And finally, Arends points out that other investment options like bonds are not necessarily offering a good alternative return.
All up, these arguments point to some strong reasons to reconsider property investment in Spain real estate now. With the roadshow sure to drum up interest as it continues its European leg – especially in Germany and Russia where there is already a buzz of excitement for real estate in Spain – wise investors would do well to start looking at properties now. To get started, contact a Lucas Fox representative on +(34) 933 562 989 to discuss your goals for property investment in Spain real estate.