Saturday, 5 February 2011

Investment in Spanish Property Expected to Pick Up in 2011

Spain’s property market is expected to draw investors this year and perhaps even the next couple of years due to predictions that its economy will experience more stable growth.

CEO Pere Vinola stated to Reuters last Wednesday that there would be significant opportunities in Spain because it will be easier to rotate portfolios.

Also reported was that Spain’s savings banks have had a lot of change and have consolidated to more than half their numbers to clean up their balance sheets.

The ailing property market has had its negative effect on banks and the economy as a while, but experts believe that the market will be beginning to pick up this year.

Experts also believe that the Spanish property market will recover quicker from its debt crisis than the wider economy because of low rent prices and the demand for properties increasing. Spain is in strong demand for tourism and people looking for vacation property, retirement homes, or second home.

Rents are low right now and may even continue to see slight decrease for awhile but it is predicted that an increase will occur this year, according to Thomas Beyerle, IVG’s head of corporate social responsibility and research.

Developers are hoping that the positive reports are true, as plans to push forward with construction of properties move forward. According to Taylor Wimpey de Espana, a large developer in Spain, 25 percent more properties sold last year, in 2010, than the previous year. This is good news for developers, as the percentage of completed and built property stock being sold comes in at nearly 100 percent.

A good example of the kind of investment property that will draw investors: Azure Overseas is currently marketing 2 bedroom 2 bathroom apartments in Costa Calida at just £121k. The bank repossessed properties are available with 100% finance and an interest rate of just 2.5%.

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