Almost every article written about Spain names a new
property hotspot billing it as the 'next big thing' and it is true
that there are a lot of areas offering potential for investment, if
buyers are willing to head inland and leave the coast behind.
Contrary to other reports, GE Money believes that the Spanish
market will rise strongly in 2008 because of the bargains available
in less well-known towns and villages. It claims that investing in
Spain is still safer for long term investments than investing in
new emerging markets.
Despite the trepidation surrounding the predicted Spanish
property market crash, it seems that there are pockets of Spain
which offer affordable properties with some potential for capital
growth and rental income.
Barcelona and Seville
Although eternally popular with tourists, Barcelona enjoys
minimal yields of between 2.6% and 3.75%. What is more, enormous
price growth of 17.2% makes it a market only the most moneyed can
invest in.
With good flight connections and prices 30% cheaper than the
national average, Seville is becoming increasingly popular with
foreign investors. Recommended property types for longer-term
investments are either 1-bed apartments with parking in the city
centre or a 'finca' (family home) with a pool outside the city.
With a huge student body in need of rental accommodation, Seville
saw a 33% growth in property values from May 2005 to 2006, a trend
which shows no signs of abating. There are also still property
bargains to be had with average property prices being 41% below the
national average at €144,000.
Valencia
One region tipped as a particularly good investment destination
is the area around Valencia, made strong thanks to a massive
programme of State and private investment that was carried out in
preparation for the 2007 America's Cup. Tourist numbers are also
increasing with nearly five times the number of arrivals than in
1992. Infrastructure has also been dramatically improved including
a new metro line connecting the port with the airport, and a new
Central station to accommodate the High Speed Train (AVE) which
travels at speeds of 300km per hour and interconnects all the major
cities in Spain. In particular the traditionally Spanish coastal
town of Castellon, north of Valencia, saw a marked price increase
of 35% from May 2005 to May 2006 from €167,000 to €225,000.
Galera
Galera in northern Andalucía would suit people with a smaller
budget wanting peace and quiet away from coast. Renovated cave
houses are common in this area and are available from as little as
£13,500 un-restored. Restored cave houses are still relatively low
in price with most costing under £80,000. £80,000 can also buy a
range of properties in surrounding areas from farmhouses to village
houses all in need of restoration but still cheap to attain.
Costa de la Luz, Costa Almeria, Costa Tropical
Whilst the sunny, sandy Spanish Costas are areas that have
attracted the vast majority of foreign investment historically,
high price and over-development mean they are no longer considered
a canny investment hotspot.
Less-developed coasts such as the Costa de la Luz, the Costa
Almeria and the Costa Tropical offer lower prices with greater room
for development. These areas attract people looking for a more
authentic experience of Spain, and a landscape less ravaged by
construction. Property prices on the Costa Tropical are cheaper
than on the Costa del Sol, and the area is proving popular with
foreign buyers.
The Costa de la Luz is Spain's largest coast, and property here
still offers good value for money, having escaped the mass tourism
that affects other areas of Spain. This area couldn't be more
different from the Costa del Sol, though the two are neighbours.
Its golden beaches are long, wide, wild, often deserted – and more
likely to be backed by sand dunes or pine trees than high-rise
apartment blocks. As 30% of the region is a protected area, it has
consequently remained quiet and undeveloped.
The Costa Almeria is probably the area that will be expanding
most in the near future. The province hosted the XV Mediterranean
Games in 2005, and Easy Jet has begun operating cheap flights to
Almeria airport. The 12 month period between May 2005 and May 2006
saw a steady 12% increase in property prices from €171,000 to
€191,000 whilst enquiries for 2 and 3 bedroom properties in the
area increased by 14% in the first half of 2006 compared to the
same period in 2005.
Two places worthy of noting are Islantilla near Ayamonte and
Chiclana near Cadiz which offer first-time investors good value for
money, with apartments available from around €100,000 (£68,000) and
beautiful beaches, golf courses and unspoilt countryside on the
doorstep.
Fuerteventura
The closest of the Canary Islands to Africa, Fuerteventura is
another area that is worth watching, and is the least developed of
the four main islands. Fuerteventura has the warmest year-round
temperatures of the islands, with recorded winter highs of around
20˚C, making it a good bet for year-round holiday rentals and also
giving it the potential for a 52-week rental income. Prices for
houses here average €235,000 (£158,024), much lower than the other
Canary Islands, Spain and Portugal.
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