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Spanish property prices suffer cool winter

9th January 2007 | back to article listings BACK    print this article PRINT

Property prices in Spain are suffering a cool winter but Brits looking for holiday homes are still flocking to the Iberian Peninsula.

New figures from overseas property seller Kyero report that asking prices in Spain have fallen this month from €249,000 (£167,000) to €245,000 (£164,000).

However, further investigation of the data reveals that the national average is heavily skewed by Barcelona, where homes on the property selling website are advertised at an average of €608,000, some 148 per cent above the mean for the country as a whole.

As 20 out of the 29 regions included in the survey were below the national average, it can be concluded that property price inflation in the country essentially depends on the region, as many are very much dependent on the fluctuations of the tourist market.

Other reasons for a depressed property market could lie in the flurry of homes built in tourist areas over the last few months, leading to oversupply, and the recent spate of housing scandals involving local authorities.

Despite the winter pessimism, Paul McMullan, web manager, of property firm Escapes2 advised that the best places to invest were outside the more developed regions.

"Probably, where the America's Cup will be next year [Valencia]," he said. "Prices [there] haven't risen as much as the Costa Del Sol and the Costa Blanca, you will buy them for buy-to-let and avoid places that have been highly developed.

He added that for jet-to-let investors, the best places to look are "at cities such as Barcelona".

But Mr McMullan said that many Brits are still flocking to dream locations in Spain in spite of the dampened housing market. He claims that this phenomenon is occurring "especially in the south in the Costa Blanca".

"There are huge expat communities in those areas because it is still affordable to sell up here and buy down there and have money left over.

"It is still popular with retirees, I wouldn't say that it is a great investment, but it is still a good place to live. That is why it is still popular with people looking to buy holiday homes."

Last week Spanish property expert Mark Stucklin of Spanish Property insight said that the market was moving to favour the buyer and that this could mean a growth in quality accommodation as developers would be forced to focus on building top-of-the range apartments and villas in ideal locations.

"I am optimistic about the best quality property and developments in Spain, which I think will benefit from a flight to quality as the market dips," he explained.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/3208.html. Alternatively, please see our full press release archive.

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