Any headline regarding investment into Spanish property would be sure to grab attention, but the news that investment has reached a record high so soon after the crisis is welcomed by all involved in the property industry.
Back in 2008 when the recession hit and the property “bubble” burst, Spain become one of the worst hit countries in Europe with new construction coming virtually to a standstill and banks refusing mortgages. House prices dropped by 8% in 2008 alone, and over the period between 2008 and 2013 they fell by 37%. Naturally this led to a sharp decline in investment which has only begun to stabilise in the last couple of years.
Investment has now surpassed pre-crisis levels and is expected to be in excess of 13 billion euros in 2015. This is three times the amount invested in 2013 and 25% more than in 2014.
Where has the money come from?
This investment is comprised largely of foreign money, predominantly the USA, the UK and France; however Spanish companies are now regaining their confidence and are becoming much more involved than they have been since 2008. Builders and developers alike are now bulk buying land again, which has led to an upturn in prices in parts of Spain. Recent figures have shown an increase in land prices in the Valencia region of 18%, which reflects this.
Why invest in Spain?
Aside from the obvious reasons of sunshine, culture and lifestyle, Spain has become one of the top destinations worldwide for foreign investment thanks to its now stable economy and relatively low property prices.
Recent figures by leading global property company CBRE have ranked Spain sixth in the world behind the USA, the UK, Germany, Japan and Australia. This is a dramatic improvement from just a couple of years ago when in 2013 Spain was the 16th most favoured place to invest in the world, and 11th place in 2014.
Investment in Spanish property is predicted to continue in 2016. Almost half of the 13 billion euros has been spent in the business premises sector, in particular in Madrid and Barcelona, which paves the way for Spain’s recovery to continue well into the future.