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Property boom is over …and that’s official
• 17 May 2007 •
THE property boom in Spain is over.
Economists are now watching any future price adjustments for indications of whether the market longer-term is likely to burst like a bubble, or go down slowly.
The Bank of Spain has revealed that last year foreign investment in real estate fell one third to 4.8 billion euros, compared to 7.1 billion euros in 2003.
Blame for the price falls are over-exploitation of urban land, corruption and fiscal laws, with potential foreign buyers consequently thinking twice before investing in second homes in
Spain.
The building bonanza in recent years was aided by cheap loans, with the number of new homes built in Spain over the last seven years more than the total of all collectively built in France, Germany and Italy.
While an estimated 760,000 Britons now live in Spain, the high property prices that are now a part of life in many areas, including in Alicante and Malaga, are putting many would-be buyers off.
“prices have fallen, especially in the last 18 months,” said Brian David, president of the Spanish branch of the British company National Association of Estate Agents, based in Marbella.
Gordon Turnbull of Blue Med Estate Agents, in Murcia, said “We are building too many houses. Nearby places are swarming with re-sales. People thought their investment was going to revaluate and give a big profit, but it just has not happened.” One or two-bedroom coastal apartments with community pool and garage that sold two years ago for 155,000 euros are now worth about 135,000 euros, he added.
While four out of every 10 people in a survey said that Spain remains their chosen holiday destination, many indicated that it is now expensive, leading to Bulgaria and Croatia becoming more popular. |  Return to Top
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