Spain is still the dish of the day

Although the overseas property market has expanded and diversified - where probably even the most obscure country has a website dedicated to the wonderful investment opportunities to be found within - Spain remains the perennial market leader; a position that we believe it is set to hold for a long while to come.
As far as love affairs go, the Brits’ infatuation with Spain has often bordered on the obsessive. From their constant desire to pop round for a visit (16 million Brits descend on Spain every year), the Brits have been doe-eyed for Spain since the first package-holiday tourists touched down in the liberal, swinging sixties. Since then, we have been transfixed by Spain’s beauty, heat and relaxed attitude. And while France is more ‘her indoors’ - appealing to an older, more traditional crowd - Spain has definitely played the role of the sultry mistress, where playing away has never been more fun.
But is the love affair over? Has Spain lost its appeal? Are our heads being turned by the younger, racier locations of Eastern Europe, Africa and the Caribbean? Recent press reports announcing Spain’s demise have been a little premature to say the least. There has certainly been a marked decline in property sales, and prices are no longer rising at the rate they were four or five years ago, but the property market in Spain remains one of the strongest and most dynamic in the world.
The facts speak for themselves: 800,000 new homes were built in Spain last year(2007), which is four times that of the UK. Of course, not every property is being snapped up, but there are still approximately one million British-owned properties throughout the country, with an additional three million foreign-owned homes on top, with the Spanish Ministry of Tourism predicting that a further three million non-Spanish residents will purchase property in the country by 2025. So the demand is definitely still there.
The wobble came about earlier in the year when shares of some of Spain’s leading property developers, saw their share price correct. To the uninitiated, this sparked a panic that the property market was heading for a crash, when in reality all that had happened was a slight correction of share values in the stock market; a correction that was required to stem the astranomical share-price rises that have come to characterise Spain over the past decade. The correction in the stock market was in fact forgotten within one month as share prices of the construction companies in most cases had recovered.
However, whereas the slump may have been felt in the more traditional areas of Spain – namely the Costa del Sol – property prices elsewhere have been healthy. Alicante has seen rises as has Murcia, and the Costa Blanca in general posted price increases of 8% over the past 12 months (according to Spanish Government figures). prices just are not collapsing.
Ally these figures to Spain’s nationwide standing as one of the strongest economies in the Eurozone and the picture for the Spanish property market really is not as bleak as it is being made out to be.
And anyway, the country’s attractions are immune to market conditions. If share prices fall, the sun still shines. If property prices remain stagnant, the wonderful way of life continues at its (extremely) leisurely pace. And if short-term investors are struggling to sell their properties, the Mediterranean breeze will still roll in, cooling the brows of even the most fraught investor.
The plan of attack in a mature market such as Spain’s should be to have a long-term plan. A 10 year timeframe should be the minimum plan for the sensible investor: ten years to soak up the sun, the culture, the language and, yes, the heady concoction of different cultures, each vying to put their own stamp on this ever-enduring and ever-accommodating land. So, do not neglect Spain – treat her with the respect she deserves and you shall be justly rewarded.