Since 1996 there has been a property boom in Spain, fuelled by low interest rates, low unemployment and the introduction of the Euro. The combined effect of a strong domestic market and a buoyant second home market has seen sustained appreciation in capital values.
A lot of the demand has come from northern Europe. It is estimated that 1.1. million foreigners (non-Spanish) now own holiday homes in Spain, of which around 500,000 are British. As development around the coastal areas has reached its limits, continued demand has started to push property prices and values higher.
A report by the German bank LBS published in 2000, concluded that by the year 2005 a further 800,000 European Union citizens will purchase a property in Spain.
2003 official Property Price Increases in Spain
According to Sociedad de Tasacion, property prices rose in 2003 by:
17.5% in Almeria, 20% in Malaga, 17% in Marbella, 19.8% in Fuengirola,
22.4% in Torremolinos, 9.4% in Tenerife.
Figures released by consultancy group DBK and ratified by the Provincial Association of Promoters show that 30,000 homes were sold to foreign investors which generates a staggering 400 million euros an average of 133,333 euros per home. Foreign buyers purchased 3 out of every 10 new homes that were built last year along the Spanish Costas, where a total of 135,000 homes were constructed, of these 34.4% where in Andalucia, 25.9% in the Valencia region (90% in Alicante), 13.3% in Cataluna and the Canary Islands, 7% in Murcia and 5.9% in the Baleric Islands.
According to a report by Hamptons International, the European Union recently identified the Costa del Sol as the fastest growth area in Europe in terms of population. Currently some 2.5 million people live on the costa, this figure is expected to rise to 6.5 million by 2011. UK. residents currently account for 750,000 of the resident population. In 2001, 10 million people flew into Malaga International Airport, 2.5 million of these were from the UK. In 2002 this was predicted to rise to 12 million.
