End of the Spanish Property Boom?
Last year, there were 800,000 houses built in Spain – more than France, Germany and Italy combined. This follows a number of previous years, where Spanish builders were working night and day to satisfy the demand from overseas property investors for apartments and villas near to the coast.
House price inflation in Spain has pushed up prices beyond that which is affordable by Spanish professionals. Singles and newlyweds are increasingly staying with relatives, until such time as they can afford to get onto the property ladder.
UK Spanish Property website The Spanish Property Register has seen hits drop from 2000 hits per week to around 900 hits per week in the last 6 months. Interested buyers are now starting to look further afield for cheap properties, especially into the new tranche of European Community members, such as Bulgaria and Slovenia.
About 750,000 British citizens have property in Spain, and we are now starting to see the “Holiday Homes Abroad – the Disasters” type program on TV. We see dubious planning practices, which allowed developers to build properties on land that you personally own, and new developments of high-rise apartments interposing themselves between your dream home and the spectacular views for which you bought the property in the first place.
There is also a trend for families and retirees who moved to Spain for the climate, trying to move back to the UK. The problems for them are twofold. Firstly, the glut in Spanish properties, and the changes that the country has seen in residential developments, means that prices in Spain are dropping. Secondly, the UK is continuing to experience house price increases, year-on-year. These two mean that many ex-pat families are finding themselves in a situation where they cannot sell their overseas property for enough money to enable them to buy a property back in the UK.
Dream home abroad? Think seriously about it.