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Thursday, 20 November 2008 00:00 |
Welcoming more than 50 million tourists a year, Spain is one of the most popular holiday destinations in the world.
Nowhere is this more apparent than along the southern coast - Costa de la Luz, Costa del Sol, Almeria and Calida - where phenomenal demand for holiday rentals makes property investment in the region a worthwhile occupation.
For many, the allure of Spain lies in its relaxed lifestyle and first-class amenities. More than 300 days of sunshine a year can't hurt either - no wonder 31 per cent of all international British-owned residences are situated in the Mediterranean country.
Strong rental demand from tourists
The World Tourism Council holds Spain as the second most popular tourist destination in the world, a fact not lost on property author Kurt Schefken.
Commenting on the high rental demand seen in the country, he elaborates: "There has been a recent surge in holiday homes in Spain and for good reason.
"Property prices are less expensive than many other countries and the climate makes it ideal for vacationing year round."
Official estimates suggest that 14 per cent of all tourists stay in the southern region of Andalucia, with 8.5 million visitors heading to the Costa del Sol each year.
With the Institution of International Tourism in Spain forecasting annual visitor growth of three per cent, it is easy to see why there were nearly 160,000 searches for Spanish property in July.
In fact, the Globaledge Search Index also revealed 16,000 online searches for property along the Costa Blanca, 7,000 for Almeria and 6,000 for Calida.
Plans by the Spanish government to approve new commercial flight routes into the country will boost tourism further still, with golfing holidays in the Costa de la Luz - a popular choice among visitors - likely to increase significantly.
This will be beneficial for investors renting out accommodation. Just outside of Huelva, along the Costa de la Luz, the new 18-hole golf course at Nuevo Portil is surrounded by exquisite developments set against southern Spain's piney forests.
Economic factors
It is no secret that relative oversupply of houses in certain areas of Spain has, along with incomplete developments and rising prices, put a damper on the phenomenal property growth seen earlier this decade.
Analyst Morgan Stanley forecasts that the Spanish residential market will back on its earlier track by 2011. Along the Costa del Sol, for example, local property experts assert that prices have remained stable over the last year.
Although annual market appreciation of 4.2 per cent might sound modest compared to recent phenomenal figures, it is much more sustainable in the long-term and represents a stability that is not present in many other markets.
Prices are higher than in emerging property markets. In the Andalucian port city of Malaga, the average property costs 209,000 Euros (£163,000), but there have been a number of properties selling for up to 60 per cent below market value in recent times.
These properties represent excellent value, when considered alongside the strong rental yields of up to six per cent that can be enjoyed in the country.
Spain's southern coast offers things that many other property markets cannot - stability, strong rental yields, appreciable capital gain and proximity to the whole of Europe - making it a top-quality destination for investment property.
Peter Treherne, of Sheffield-based investment property consultancy Independence Properties believes that Spain can still play a role in investors' thoughts.
"Spain historically occupies a strong position in the conscience of the British investor, and there is no reason for that to change.
"While the market is readjusting, there are some fantastic bargains to be had and with diligent research and planning they can represent a highly profitable vehicle through these difficult times." |
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