Spain - Market Growth

Due to its location, maturity and ease of access via budget airlines, the Spanish property market continues to grow. Learn here what the future of Spain’s property market is expected to offer. Over the years Spain has gained worldwide acclaim as one of the safest and most highly lucrative locations for property investment, while annual returns of some 20% have been easily achieved. More recently however, predictions are showing a slight slow down in the market. Despite this, in 2005 the average increase in Spanish property prices was 13.4%, which still represents a very healthy capital return.


Many investors view investment property in Spain as a solid option and prefer it to riskier alternatives in other worldwide emerging markets. Although property prices have risen substantially, good returns on investment can easily be achieved while Spain relentlessly holds onto its great reputation as a holiday and property hotspot.

More tourists are purchasing second homes in Spain each year and the number of immigrants living and working in Spain and buying homes is also on the increase. Most of the houses bought by tourists from other European Union member states are situated along the Mediterranean coast. However, due to a new sense of adventure amongst Spanish property purchasers, many are looking for key inland locations for newly built or even older properties in need of renovation. Well researched, lower priced properties in suitable locations are proving to be as lucrative as the top end properties to be purchased on the Costa del Sol. These properties are currently boosting the economy and developing a fresh, new more affordable property market in easily accessible and well serviced rural destinations.

Meanwhile, Spanish mass tourism continues to soar: in 2005, Spain greeted 55.6 million tourists, representing an increase of 6% on the previous year. This is largely due to better transport and tourist infrastructures, including the increase of budget airlines and low cost holiday deals that have become increasingly popular in Spain.

Rental income from buy-to-let investments is of great interest to investors as high rental yields can be expected in the new luxury coastal resorts. With the superb weather in Southern Spain offering potential for all kinds of year-round holidays, the main tourist season can stretch from March to November, offering great rental investment potential.

According to some estimates, over one and a half million foreign people will invest in property in Spain over the next five years.

Reasons Why Spain is an Intelligent Property Investment Location:

  • Spain welcomed 55.6 million tourists in 2005 and this figure has been on the increase each year.
  • Spain is the second most popular holiday destination in the World.
  • With more than 300 days of sun every year and numerous golf courses and beautiful beaches, Spain offers year-round rental options.
  • Easy, budget access from many locations via low cost airlines
  • Good transport infrastructure with modern roads to many locations.
  • Still a lower cost of living, compared to the UK.
  • Diversification from a UK-only property portfolio
  • A good investment alternative to today’s riskier stock markets.
  • Simple property acquisition and legal procedures with no language skills required.
  • English widely spoken in resort areas.
  • Stable economy and solid returns on investment within a safe market.
  • Financing readily available with low interest rates.
  • Residential internet bookings rising steeply and benefiting the "buy-to-let" market.
  • Relaxed lifestyle and warm climate continue to attract ever increasing numbers of visitors and re-locators.
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