The real estate industry in Spain has again had a very successful year and developers as well as estate agents have again indicated good sales in 2006. Current reports have stated the average price of re-sale property on the Costas have risen yet again in the second half of 2006 by between 10% and 15%.

Since 1998 demand for properties in Spain has risen steadily every year and demand still exceeds supply. With the current 12 million visitors to the Costas expected to rise to some 20 million in the next five years, that increasing demand and restricted supply should see prices moving upwards for some time.

We at Insight Spain believe this trend will continue for many years to come due to the following reasons:

1) At present some 1.1 million holiday homes in Spain are owned by foreigners and almost half of those are British and there is little sign of that slowing down. Some surveys predict as many as a further million non-Spaniards buying Spanish homes by 2007. Even if just a fraction of these people purchase in the next few years it will show sufficient demand to keep the real estate industry healthy for many years to come.

2) The mortgage rate in Spain is very low. In fact it is the second lowest in the European Union for new loans (after Finland). Spanish banks offer very good conditions for lending money and this, added to the fact that investing in the stock market remains uncertain, has stimulated the demand for properties. Because of this, a lot of investors and other people who want to spend their money wisely have invested in properties in Spain and in a lot of other parts of Europe.

3) The recent enlargement of the EU implies a bigger market for Spanish real estate in the near future. 75 million Europeans have joined the union and it will not take long before they focus on the booming Spanish real estate market. Especially in Poland, Hungary and the Czech Republic where large groups of people are interested in investing in residential tourism real estate in the South of Europe.

4) The introduction of the Euro single currency has made it much easier to compare property prices. People now have a better understanding of property values as well as other goods and services in Spain in comparison to other countries in the Eurozone.

5) The Spanish Costas are different to other international resorts in that they are home for tens of thousands of people from all over the world. Not just holiday resorts anymore, they have transformed themselves into 12 month destinations. A cosmopolitan way of life is evident in all aspects, with a multi-national mixture of cultures, traditions, languages and professions that set Spain apart.

6) With more than 4,000km of coastline and some of the cleanest and most beautiful beaches in Europe, Spain enjoys over 300 days of sunshine every year with average temperatures between 18° and 30° C. From spectacular landscapes to sandy beaches and rocky coves, from mountains to plains and from lush green forest to orange and lemon groves, Spain has it all.

7) Low cost airlines are flying more frequently to more and more locations in Spain and fierce competition is keeping the costs down as mainstream airlines offer competitive deals along side the low cost carriers. Spain is no more than 3 hours away from any UK Airport and this has helped make it a great short break year round destination.

8) Equity release has reached record levels in the UK (at around £57 billion in 2003) due to the rapid rise in UK property prices. Much of this has been used to buy cheaper European property outright and this trend looks set to continue as more people cash in on their UK property gains.

9) With outstanding leisure facilities encompassing a wide range of water sports, sailing, golf and horse riding, not to mention an abundance of nightlife which range from quiet restaurants to vibrant pubs and clubs, Spain is perfect for all kinds of buyer. How can we be so blatant about this? Well the fact is, we have moved from the UK to live here and we love it!

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