Contradictions over state of Spanish market

Experts are predicting that Britons owning overseas properties could reach record levels this year.

Foreign exchange firm Moneycorp says that the number of overseas second home owners has already increased from 550,000 to 800,000 in the last two years.

The news comes at the same time as contradictory evidence about the state of the Spanish property market which, says another report, is on the slide.

According to the Kyero.com Spanish House Price Index, average property prices in Spain have fallen 1.2 percent from €250,000 to €247,000 over the last three months (June – August 2007).

Another national newspaper reported that hundreds of estate agencies across southern Spain have gone out of business. The story said that this signalled the end of a buoyant housing market that has fuelled the country's economy over the past decade and that many British owners of Spanish homes were now facing major losses.

This appeared to be backed up by the Organisation for Economic Co-operation and Development which stated that Spanish house prices were so over inflated that there would be “an abrupt adjustment” causing property prices to plunge.

But figures released by the bank of Spain and the Association of Spanish developers have contradicted these predictions.

They say Spanish property investment rose by a staggering 19.2 percent, as compared to the figures for the same period of 2006. Foreigners invested 2.252 billion euros in Spanish property up to the end of May.

The association of Spanish developers (APCE), in an article in the Spanish daily ABC, state that almost all of the 1.6 million new properties built in Spain over the last three years have already been sold which, says the organisation, proves there is no slow down in the Spanish property market
The Kyero Spanish House Price Index found Alicante to be the most representative of the average property price of €247,000 whilst Malaga province remains the most expensive popular destination amongst Britons with average property prices of €310,000 - 26 percent above the national average.

Catalan-speaking Barcelona, Mallorca and Girona top the Index as the most expensive in Spain with average prices of €621,000, €429,000 and €425,000 respectively.

Bargains are still to be had inland with the provinces of Cordoba, Albacete and Jaen offering the lowest priced properties (averaging €148,000, €142,000 and €91,000 respectively).

The Canary Island of Fuerteventura, despite a doubling of population since 1998 (49,020 in 1998 to 105,000 Jan 2007 – Spanish National Institute of Statistics), still offers an average property price of €229,000.

Source: Fly2let