Homes that have languished on the Spanish property market for years are being smartly snapped up by savvy foreign investors. The latest data issued by Spain’s National Institute of Statistics (INE) illustrates that sales of resale property surged over the last 12 months, with a recorded annual increase of 34% in completed sales transactions nationwide.
Last quarter’s data provided by the UK’s leading real estate website for homes abroad, Rightmove Overseas, shows that there is significant interest in acquiring Spanish property across the Costa Blanca amongst UK buyers, with an 85% increase in the amount of searches for Alicante regional property performed by potential buyers for the year to date.
According to David Loughlin, Property Consultant at Carols Casas Estate Agents based in La Marina, the increase in interest from UK buyers stems from a favourable exchange rate and recent changes in UK legislation. “We’re seeing a great deal of interest from British buyers this year keen to capitalise on the strong Pound, and changes to the ways in which people can access their private pension benefits has meant that some customers are choosing to invest in foreign property, instead of the more traditional choice of an annuity”, he said.
“For now, prices remain very attractive for British property buyers, and a modest detached villa with a private swimming pool can still be purchased for the price of a flat in Yorkshire“, he pointed out. “Spain has made a remarkable and consistent financial recovery over the last few years, restoring consumer confidence in Costa Blanca’s property market. With uncertainty over the UK’s proposed EU referendum and the implications that a British exit from the Eurozone might hold for Brit’s at home, many potential buyers have adopted an ‘it’s now or never’ approach to their foreign property purchase”, said David.
But he warns that British buyers are facing ever increasing competition for resale properties from other foreign investors from Holland, Belgium, and Russia. “Resale properties don’t attract the premium that new build properties do, they offer excellent value for money as a second home or investment property”, he explained. “We’re receiving growing interest from Russian customers looking to invest in Spanish property following the financial turmoil and political instability in Greece and Cyprus. You just don’t get that here in Spain”.
Local housing stocks are being further exhausted by investors, as they place their properties into holiday or long term rental to make an active and immediate return on their investment, in addition to the passive returns of an expected longer term increase in value. “There is a genuine local demand in the Torrevieja area, particularly for long term rental properties from people who come to work in the recovering Spanish economy”, reports David.
“With fewer resale properties coming to the market locally we’re in the profound situation that, if things continue to escalate as they are, we may end up with very little to sell”, he said.