This country is now the 6th largest property market worldwide

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Lifestyle property investment is the name of the game in Spain

Madrid
Madrid

Spain’s real estate sector seem to have always had an on-again-off-again relationship with investors – it underwent a property boom up to the Global Financial Crisis before prices and investments dived in 2008 – but it looks as though the Mediterranean country is back on track in 2015 and is destined to become a glittering investment proposition once again.

The Corner reports how Spain is now the sixth largest real estate market in the world, according to the latest research from CBRE, overtaking perceived giants like France, Canada and China and improving on last year’s 11th place finish.

In the months to September 2015, investment in Spain’s property market already stood at EUR10.8 billion (USD11.75 billion) and is expected to hit EUR13 billion (USD14.1 billion) before the year ends.

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Spain’s previous record for property investment was EUR10 billion (USD10.9 billion) during 2007.

Both commercial and residential Spanish opportunities have been swept up by investors, with the latter very much determined by individual lifestyle choices and the desire for a second home, according to OPP Today.

“This time around the market is lifestyle driven by affluent buyers seeking a new home. This is the main difference from before, in the last boom ‘amateur investors’ blew the market in to a construction frenzy ultimately leading to a market crash,” explained Adam Neale, owner of Costa del Sol-based real estate agency Terra Meridiana.

Neale analyses that overseas buyers make for about a third of his clients in the Balearic Islands, about 15 percent in Andalusia, and much higher in prime areas like Marbella and Estepona in the Costa del Sol.

More: Spain’s foreign property market hits 9-year high

Chinese investors are particularly active in Spain’s commercial property sector. Euro Weekly News reports that billionaire Wang Jianlin, owner of Dalian Wanda, is in talks to buy 75 percent of the behemoth Oropesa del Mar resort near Valencia for EUR1.2 billion (USD1.3 billion). Wang’s group is also very active in big ticket deals in Madrid and Barcelona, while the tycoon also now owns a 20 percent share of football club Atletico Madrid.

“The Chinese investor is looking further afield, they’re looking at where the next growth potential will come from. Over the past year, Spain obtained the greatest number of Chinese buyers,” said Andrew Taylor, co-CEO of Juwai.com, on preferred Mediterranean investment destinations.

According to CNBCSpanish real estate portal Idealista found that Spain’s attraction to Chinese property investors lay in the “adjustment in prices and good economic prospects” of the country. While property prices are steadily increasing, yields are also attractive and higher than United Kingdom and London counterparts.

 

Image is by cuellar and used under a Creative Commons licence

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