Spain wakes up to property threats

Article Date : Wednesday, November 16, 2005

Despite numerous surveys and reports suggesting that eastern Europe is the hot destination for the buy to let market, many Spanish property developers have not been listening – until now.

The threat from countries such as Bulgaria and the Czech Republic had been dismissed for a long time by property developers in Spain, especially while the property price boom continued and prices remained high. But as property price inflation has cooled during recent months, Spanish daily El Mundo has revealed that property professionals are now getting a little worried by the new competition.

While the buy to let market has seen a major increase in countries in eastern Europe, the traditional haunts of British investors have felt something of a squeeze, which is now beginning to bite in Spain. However, the new competition could prove to be of value to property investors, as Spanish developers realise that they no longer have the monopoly on foreign investment and will have to work hard to ensure prices remain low.

Otherwise, there is a threat that people will start to look elsewhere, in a move that would be very damaging for the Spanish market and economy as a whole. Therefore the Spanish government will also be looking to reduce the cost of new buildings in the country as a way to deliver fresh impetus to the market and attract more investors back to the region.

Examples of the Spanish government's moves to improve matters have already been seen, with the recent efforts to reorganise the way property and land is priced. Now that the companies involved in property development are beginning to realise that there is no longer a crest of a property wave to ride, they are more likely to look into developing cheaper alternatives to bring more investment to the country.

News provided by Assetz.com

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Spain wakes up to property threats

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