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Spain's foreign legion

19th September 2005 | back to article listings BACK    print this article PRINT

Many Britons often aspire to own a second home in Spain, or plan to escape these shores to head to the country in their retirement.

And new figures suggest that the UK is not the only country to consider Spain to be the ideal place to invest in property, as nearly one-in-ten of the country's residents are now originally from overseas.

According to figures collated by Spain's national statistics office, of the country's 44.3 million residents, over four million are from other countries. The figures came as a result of a government amnesty, to try to discover how many foreign nationals are working illegally in the country. But the results have also found a large number of legitimate workers plying their trade in the country or having retired there in their later years.

The number of foreigners living in the country represents a massive rise compared to seven years ago, when the proportion of foreign people living in Spain was just 1.6 per cent, at 0.63 million.

Many of Spain's foreign nationals are living there having invested in property, but there is now a question mark over whether more people will continue to arrive in Spain, or whether the foreigners' love affair with the country might be coming to an end.

Although prices remain lower than in the UK, properties are becoming more expensive, largely because it is such a hotspot for property investors from around the world. And with the emergence of eastern European countries as potential property investment hotspots, the Spanish could find that they have priced themselves out of the market.

But one company has scotched rumours of a slowdown in the Spanish property industry. Spanish property firm Kyero has produced research to suggest that the industry is in fact continuing to show good signs of growth. Foreign interest in Spanish property is, according to the firm, as strong as ever, meaning that people are not being put off by Spain's growing reputation and the prices that go with such a status.

If this is the case, then it is very good news for the Spanish property boom, because the conclusion that can be drawn from Kyero's research is that investors choose Spain for reasons other than simply because it is cheap.

Rather than picking Spain as a cheap option, many people now see the country as a highly desirable place to live, and therefore it does not appear to be in direct competition with eastern Europe, where the focus is still on the inexpensive nature of property. Spain looks set to establish itself as a long-term property hotspot, with the emphasis on quality and value for money.

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