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WHERE TO BUY: SPAIN’S PROPERTY HOTSPOTS

Much of Spain is back on track after the global crisis, says Karen Tait. But where are the best places to invest in property, and who is buying up?

After years of being stuck in the doldrums, it’s widely agreed that the Spanish property market is well into recovery. Spain’s General Council of Notaries reports just over 18 months of continuous growth, which is expected to extend well into 2016 and beyond. Furthermore, quarterly figures show that home sales in Q3 last year rose in all Spanish regions except Navarre, suggesting that the recovery is not limited to big cities and the coast.

Marbella appeals to a broad demographic while Barcelona has an international following

Marbella appeals to a broad demographic while Barcelona has an international following

What is particularly clear is that prime properties in the best locations are still highly sought after, and while prices remain relatively low compared to before the crisis – offering fantastic opportunities for buyers – the question is, of course, how long they will stay that way.

Where to buy

‘Spain has seen an impressive uptick in activity over the last 12 to 18 months,’ reports Mark Harvey of Knight Frank. ‘After average falls of 40% from the 2008 peak, property prices began to stabilise in early 2014 and have, in certain locations, started to rise again.

‘Hotspots worth considering include Marbella, Barcelona, Madrid and Mallorca, where prices are showing healthy signs of stability and in certain cases showing modest price increases. The south and south-west of Mallorca put in a robust performance in 2015.

A stunning five bed villa with an infinity pool in Andalusia

A stunning five bed villa with an infinity pool in Andalusia

Above: Five-bed villa in La Zagaleta Golf and Country Club, £6.75m from Knight Frank (0207 861 5034)

Son Vida showed an incredibly 100% increase in transaction numbers when compared to 2014 while Puerto Andratx saw a 40% jump in volume. ‘The revival in demand for luxury property in Spain reflects growing global concerns and the poor performance of many other asset classes,’ he continues, ‘which has helped drive demand toward value and growing interest for largely discounted real estate in key locations.’  

‘We’ve witnessed a gradual reduction in stock levels across Spain combined with a sharp increase in inward investment from investment funds seeking development land and luxury hotels. Many US banks and pension funds have increased their holdings expecting strong mid to long-term growth potential. This bodes well and you might say announces a revival of the market and the beginning of a new real estate cycle.’

Harvey advises that buyers look to ‘international destinations which benefit from good airlift but also offer comprehensive amenities and compelling year-round lifestyle choices. This will help provide a solid rental income and ultimately help underpin the long-term value of the purchase and liquidity.

Mallorca is enjoying a period of growth - we love this luxury villa with it's own wellness centre

Mallorca is enjoying a period of growth – we love this luxury villa with it’s own wellness centre

Above: Five-bedroom home in Son Vida, Mallorca, £6.9m from Knight Frank (0207 861 5034)

‘We would not recommend going off the beaten track as these are the areas that suffer most in a downturn,’ he adds. ‘Focus instead on the tried and tested such as Marbella and surrounds, which appeal to a broad demographic. Barcelona has an enduring international following underpinned by its bustling city and economy. The Costa Brava appeals to many nationalities due to its largely unspoilt coastline and proximity to the Pyrenees, France, Girona and Barcelona.

‘The Balearics will continue to outperform due to restrictive planning constraints, limited land and growing protectionism which will all help support values and demand moving forward.’ Leisure opportunities are also a key part of the appeal, believes Harvey: ‘Golf remains a magnet and combined with warmer climes is likely to entice a growing ageing population from northern Europe.’  

Who is buying?

‘European buyers are mostly looking for a holiday home rather than permanent relocation,’ explains Christopher Vent of Winkworth Spain. ‘They are motivated by the fact that the Costa del Sol enjoys more than 320 days of sunshine per year, property prices are competitive and, of course, the lifestyle is unbeatable.

‘For Middle Eastern and Arabic investors, whose currency is pegged to the American dollar, the weak euro is a huge draw and they are keen to invest in European assets. They love the leisure facilities this coast has to offer and the less humid summers, plus the area is considered a safe place to invest in.

Sun, sea and sand...who wouldn't want a place in Spain?

Sun, sea and sand…who wouldn’t want a place in Spain?

‘The new UK pension release rules mean that people are now able to draw down their pensions earlier,’ adds Vent. ‘The Costa del Sol is not only for the wealthy; liquidating pensions means that UK residents are deciding what to do with the extra cash – and a holiday home in the sun is a wonderful option.

‘In addition, UK house prices are at an all-time high and homeowners are therefore able to remortgage their home to purchase a holiday or investment property elsewhere.’ While some parts of Spain have been flooded with properties, this is not the case in the more desirable areas. ‘Some exciting new projects and developments are now planned and being released on the coast, says Vent, ‘but we are still experiencing a shortage of quality properties for our waiting clients.’

MORE: MODERN SPANISH ACCENTS FOR A BRIGHTER HOME

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