Ex-pats behind Spains property boom

Expats are emerging as a driving force in the Spanish economy, boosting demand for new housing, analysts say. House-buying by expats helps to sustain the country's construction boom, reports the British daily The Financial Times.

"There is no risk of a property crash in Spain in the short or medium term thanks to new demand generated by immigrants," says Angel Berges, a partner at Analistas Financieros Internacionales, a Madrid consultancy.

Berges told the paper he believes immigrants will buy some 170,000 homes in Spain this year – almost one quarter of total demand for new houses. In the past six years, Spain has seen a huge increase in its immigrant population.

The number of immigrants has risen to 4 million, making 9 percent of the population of over 44m. One in three immigrants moving to the European Union since 2000 have gone to Spain. Spain's rising divorce rate will also help to drive up demand for new houses.

Estate agents say people who have split up will buy up to 140,000 homes in 2006. Last year there was an 80 percent increase in divorces, to 87,000. It follows the introduction by the present government of the so-called 'express divorce'.

The number of separations fell by 51,000 as most people opted for divorce.

Strong property investments

Property investment in Spain has sometimes been overshadowed in recent years by stories of the growth in Europe's emerging property markets.

Those in the know, however, Spain has rarely been out of mind, with conditions remaining excellent for capital gains & demand from locals & foreigners alike extremely high.

As reported today by Expatica, the desire to own property is still strong among Spaniards, even after interest rates were increased.

Mortgage loans increased by 37.7 per cent in January when compared with 12 months earlier, reflecting much higher confidence & a growing trend of homeownership in the country in general.

Expatica reports that the Bank of Spain has criticised the European Central Bank for the current rate saying that it is "expensive", but it is clear that families are willing to go through with property transactions all the same.

Demand from foreign investors is always likely to remain high and this has played a significant role in sustaining almost unrivalled house price growth over the last couple of decades.

Because of Spain's thriving reputation for sports & golf in particular, many choose to purchase holiday homes around developing golf resorts, with many intending to rent their properties out to holidaymakers who head back to the lush fairways & immaculate greens every year.

Of course, it is rare to discuss Spain's allure without mentioning its beautiful beaches & property investors have also been boosted on this front.

Over the years, many people have been tempted to construct buildings by Spain's celebrated beaches without having any kind of exit strategy or a real purpose for the property. It is an unfortunate trend that has left numerous dilapidated buildings blighting the stunning scenery of the coastal areas.

As reported recently by Expatica, however, this is being tackled with the decision to allow the Spanish authorities to demolish structures along the country's coasts, with 63 already torn down.

Adding investment appeal to the areas, it is hoped this will lead to renewed enthusiasm from those who have been put off by the accumulation of functionless bars, homes, walls & industrial buildings.

Almeria has seen much of the action, but nine structures have also been pulled down in Murcia, where investors have already been making significant gains in recent years.

Based on the Mediterranean coast of Costa Calida, Murcia is only 40 minutes from Alicante airport, while it is thought it will receive one of its own by the end of the year, providing yet another incentive to invest.

Spain property still the best!!!

Despite the lower property prices, Bulgaria ranks after France and Spain based on the popularity of the country as property destination for British investors.

Nearly 43 per cent of the foreign property purchases occurred in the two countries, 999 Today reported. Australia ranks third with 11 per cent. Bulgaria remains fourth with 10 per cent, followed by the US with four per cent.

Most British investors look for holiday property abroad, the online publication reported. Additional factors, increasing the appeal of property, include the availability of cheap flights and easy access to resorts.

Bulgaria's expected EU membership attracts increasing number of property investors, representatives of Assetz real estate consultancy said.

Once Bulgaria joins the union, property prices there will rise significantly, 999 Today reported. Still, Bulgaria will need some time to achieve the investment level of already established property destinations, Assetz representatives said.