Assetz® News - Ways back for Spain

Ways back for Spain

19th June 2008 |

To many people, Spanish property is a dead duck, a market which has had a boom time and is now seeing its chickens come home to roost after years of excess boom, wild speculation and overdevelopment.

However, to continue the avian analogy, there may be plenty of others who consider that Spain's market is actually a phoenix poised to rise from the ashes, rather than a country where the goose that laid the golden egg has been slain.

The best way forward for Spain may be to learn from the errors of the past and to introduce new factors into the equation that may bring the investors - and market confidence - back in big numbers.

Not all will necessarily manage this. For example, rather than blame the credit crunch or a market correction for a 50 per cent drop in sales at the La Manga del Mar Menor in Murcia, the owners have been pointing the finger at environmental group Greenpeace for publishing photos in a book that forecasted severe flooding in the locality caused by global warming, the International Herald Tribune reports.

Whatever the merits of Greenpeace's claims, it may be stretching matters to suggest the falls were mainly down to them. However, the fact that this view has been taken by someone in this case does not mean that others are not thinking hard about how the best way to proceed with development is.

In a separate article by the same paper, it has been reported that the Andalusian government has decided to place limits on golf course development, with one concern being that such moves are being used to facilitate the building of new apartments on environmentally sensitive land, as well as using up scarce water resources. The law will limit the number of new homes that can be built next to courses, which will be classed as sporting facilities. In a comment which may echo concerns over the saturation of cheap development on the Costas, Sipke Feenstra, chief commercial officer for Netherlands-based developer La Perla International said: "It's a good thing to put more regulation to control the supply and quality."

There are other things that can be tried apart from avoiding oversupply and not damaging the environment. The government has tried to encourage buying, ready2invest reports, with housing minister Beatriz Corredor urging sellers to lower their prices and claiming: "Now is the right moment to buy a flat or house."

But what may really boost the Spanish market is new development, something which may bring about a geographical shift from some traditional hotspots, but in turn benefit areas that the focus shifts to.

Those areas with improving infrastructure may benefit in this way. According to Spanish property portal Kyero.com, the development of the high-speed AVE rail network is an example of this happening, reports holidaylettings.co.uk .

Kyero's research has pinpointed Malaga as one location where this is the case, with the city, now linked to the AVE, having average house prices that are 24.7 per cent above those of Andalucia and 23.7 per cent above the national average. Similar premiums are evident for other cities on the network such as Seville and Cordoba.

So for those looking to see the Spanish market provide some new hotspots, the answer may be to check out where forthcoming AVE expansion will take place.