OPW KEY FACTS… SPAIN

“Spain, the perennial favourite of the overseas investor is embarking on the road to recovery.”

It boasts 27% of all UK owned overseas holiday homes, has a beautiful Mediterranean coastline, diverse countryside, vibrant culture and much imitated cuisine. All these ingredients make Spain the most popular second home destination with British buyers and the world’s third most popular tourist destination. The most visited regions are Catalonia, the Costa Brava coastline and the Pyrennees mountain ranges. In terms of tourist popularity, the Balearic Islands come second only to Catalonia. With 300 days of sunshine a year, the Balearics attract British, German and Dutch property buyers in their droves and are also a favourite among Spaniards.

THE BEAUTIFUL BALEARICS
While the Balearics tends to attract the archetypal second home buyer– predominantly empty nesters and those looking for retirement solutions, it is now young families and professionals who are estimated to make up 40% of the buyers market in Mallorca.  Areas such as Andratx and Bendinat in the south west and Formentor in the north east, tend to be holiday home buyers favourites and consequently, have tended to draw the most investor activity. They are closely followed by Palma city as well as Deia and Soller in the north. Ibiza attracts young professional second home buyers of all nationalities. Now is a good time to buy on the island; land is limited and there are some good opportunities to be had. Ibiza is renowned as one of the most glamorous spots on the Med with activities to suit all and there is a strong rental market. San Jose is considered one of the most expensive parts of the island and Marina Botafoch and Talamanca areas have seen heightened investor activity and continue to boast strong values. There is high demand for country properties in the north, particularly from British buyers. For boat lovers, the island of Formentera is a short trip away with its crystal clear waters and secluded coves.

GREEN SHOOTS EMERGING
Recent statistics reveal prices in the Balearics peaked in 2008, having doubled in value since 2000. Due to the global economic crisis, they have decreased by 12% on average and in some in instances by more than 20%. The Murcia region in the South East has seen the greatest fall in values down 17% since its 2007 peak. Many areas of the Spanish Costas have been characterised by high levels of unsold, new build properties which have flooded the market, contributing to falling values, with discounts on such distressed assets of up to 50%.
Research indicates that in Andalucia price drops have been less severe. Sotogrande, one of the finest residential and sporting estates in Europe, with five polo fields and eight golf courses including the world class Valderrama, now offers good value property after significant price falls. Although there has been renewed interest in top end properties in southern Spain, a degree of uncertainty and caution abounds across all market segments in the region.