Spain’s Property Bubble Burst

March 12, 2009 - PRLog -- The downturn in perennial hotspot Spain’s fortunes has been given a lot of column inches of late. Still it’s not all doom and gloom – in fact, if you are a second home owner in Spain, the current crisis could well be a blessing in disguise…

Spain has topped the list of Europe’s most popular countries to emigrate to more times than I can remember.

The sun, sand and sea proved a killer combination and tourists and investors flocked to Spain in droves, causing property prices to sky rocket.

Then the credit crunch came and prices in Spain started to fall, compounded by a glut of unsold apartments built by overenthusiastic developers eager to cash in when the market was piping hot.

Average house prices have fallen by around 6.5 per cent year on year, with experts predicting that the decline will continue well into 2009 with an annual fall of around nine per cent.

So, with prices falling and no sign of an upturn in the near future, buyers are not entering the market, which opens up a good opportunity for second home owners as more and more people look to rent rather than buy.

With the demand for rental accommodation rising, due to people finding it harder to secure mortgage financing and reluctance to buy into an unstable property market, second home owners who do want to rent out their home should see stronger demand and higher returns than ever.

Peter Pickett, from estate agent Casas Almería, said, “Over the last few months we've seen an increase in the number of people who are looking to rent somewhere for a period of around three months.

“Some are waiting to see what property prices do and if the Euro/Sterling exchange rate improves, while others are still trying to sell their UK home in order to finance their property purchase in Spain,” added Mr Pickett.

Cash buyers who are ready to move fast want to be in the location in which they want to buy in case a real bargain does come onto the market. Buyers who don’t require mortgage finance can snap up a goodie as many desperate vendors and developers are reducing prices by a whopping 30 per cent.

Spanish locals are also wary of the current market and are looking towards the rental sector, something which is traditionally dominated by tourists and expats looking to start a new life in the sun.

Prior to the economic crisis that is sweeping the globe, only a tiny minority of Spanish nationals opted to rent rather than purchase their own homes.

But, as often happens in a crisis, things change and more and more Spaniards are now joining the hoards of tourists and expats enquiring about rental properties in Spain.

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HowTo offers consumers free access to the full text content of a range of information-based non fiction books across abroad, business, careers, family, learning, money, poker, property, wellbeing and writing sectors. Visitors can read all or part of any of our titles online, or download a PDF version for a small fee.