Spain has long been a favourite destination for holidaymakers, retirees and investors from the UK. With nearly a million Brits calling this country home on at least a part-time basis, there is simply no denying the strong draws Spanish investment had in the past. But, now as the pricing bubble is bursting, many are wondering if buying property in Spain still holds the luster it did in the past.
Property price increases in the second quarter of 2007 fell below the inflation rate. This is the first time this has happened in a decade. Add to this the fact that real estate offices are closing by the hundreds, and some investors are feeling more than squeamish about buying property in Spain now. This might not be a justified reaction, at least for people with a buy-to-let investment strategy and some capacity for embracing risk.
In this article we’ll take a look at what is happening and how investors can still cash in on buying property in Spain. The reality is there is a cloud having over the Spanish property market, but rays of hope are still shining bright in some areas.
Whilst it is very true the pricing growth potential in Spain has certainly lost its appeal, overall Spanish investment has not. There are still some very viable strategies for making money in the Spanish property market.
As price growth falls and adjustable rate mortgages start to adjust upward, there is a reasonably good chance that prices will start to really tumble soon. Since the Spanish rental market still remains quite lucrative in tourist areas, this could open the door wide for some excellent investment potential. Investors looking for a fast opportunity to flip, however, might want to search elsewhere for the time being.
So, how can savvy investors still find Spanish gold?
One of the best ways to cash in on high rental returns is to carefully research tourist destinations for investments. The Costas remain hot and so do the big cities of Barcelona and Madrid. Many investment experts are also pointing to the Murcia region as an area of growth in a country of slowdowns. This region saw growth of 10.7%, whilst other areas only grew in pricing by about 2%.
With tourism still very strong in Spain, investors who seek to cater to the holidaymaking market are likely to continue doing well. The proximity of this country to the UK, ease of travel here and the incredible sights and beautiful weather are still packing in tourists by the millions. Spain’s EUR 225.4 billion tourism industry is anticipated to continue growing by more than 4% per year.
Spain’s pricing bubble might be bursting, but opportunity is still quite ripe here. Investors who are drawn to the sun, sand and culture of Spain can find gold in the Spanish property market even in the face of adversity if they adopt the right strategy.
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