Foreign buyers’ EUR 3.6 billion on Costa property bargains
By Kevin Barnett, 24 Jan 2012
The big leap in Spanish property sales in the last quarter of 2011 has spilled over into the New Year as international bargain seekers grab the best of the Costa deals from banks and hard-pressed developers.
After months of steadily rising sales volumes, there was an extra 2.30% boost at year end that took the year on year increase to 27% - the highest level since the recession started.
Foreign buyers spent €3.6bn (£2.3bn) on buying homes in Spain in 2011, as they took advantage of significantly discounted properties, according to data supplied by the Bank of Spain.
The figures show that foreign property investment increased for the second successive year after years of stalled activity. Germany and Nordic countries outspent the one-time big spending Brits, who have been slow in spotting the new opportunities.
With Spain’s economy in turmoil and the housing market in disarray, largely due to a major oversupply of homes and the international recession, property prices have been in freefall, attracting more bargain hunters in the process.
The hike in property sales in 2011 marks a second consecutive year of growth in international investment with last year’s sales beating the total value of transactions in 2010.
Many property professionals believe that the rise in foreign investment activity is a sign that property market conditions are improving.
But with about 400,000 key ready and bank-owned homes of likely interest to the international buyers, the existing glut of 700,000 properties could take years to be absorbed.
According to the Housing Price Index published by the National Statistics Institute there are now fourteen consecutive quarters in which home prices have negative year-on-year figures. This means that prices have fallen steadily since mid-2008.
A spokesman for bank-owned property specialists, PropertyInSpain.Net said average property discounts in Spain were now 43% based on those of peak boom year 2007 and prices were approaching the levels of those in 2005.
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Spanish Property News from PropertyInSpain.Net