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Property Investment in Spain 2008

The Spanish housing market offers significant benefits to investors. The market is buoyant, and relatively transparent. A comprehensive legal framework underpins both the purchase process and rules of property ownership, and ensures relative security for investors. This combination of performance and security makes the Spanish market highly attractive to overseas investors, an estimated 1.5 million of whom are expected to purchase property in Spain in the next five years.

Property investment in Spain has seen sustained growth since 1993, with significant rises from 2001 to 2004. Prices continue to rise, but with a slower growth rate compared to 2005 prices. While there is the prospect of further slowdown in the rate of growth, the Spanish market offers real potential for ongoing returns. Investors benefit from extensive historical data on this well-established marketplace when making investment decisions. Should any price fluctuation occur, investors who retain their property through a period of slowdown can still realize on their investment, when price growth resumes.

"A combination of performance and security makes the Spanish market highly attractive to overseas investors, an estimated 1.5 million of whom are expected to purchase property in Spain in the next five years."

The buy-to-let market sector is very popular, driven by the increasing demand for holiday accommodation, especially in summer. With low-cost airlines delivering holidaymakers from the UK and Europe to the main Spanish resorts, investors can hope to secure good yields from rental properties. The holiday rental market has also benefited from increasing numbers of holidaymakers booking flights and accommodation direct, over the Internet.

The British continue to contribute significantly to this market as both permanent residents and temporary visitors. A report from the Institute of Public Policy Research suggests that 3.3 million UK pensioners may be moving overseas by 2050, three times the current number. In addition, UK holidaymakers are key to the ongoing demand for holiday homes. The rental market offers average yields of between 3.5% and 5.5% in popular destinations, which, in turn, bolsters healthy capital values.