With Spain’s real estate market still declining, the government is turning to foreign real estate investors for help. The government has set up a commission with the goal of figuring out how to sell more property. The commission hopes to emulate regions like Valencia which have been very successful in attracting foreign buyers. For more on this, continue reading the following article from Property Wire.
The Spanish government is keen to attract more foreign buyers and one region popular with overseas holiday home owners has set up a commission to find out how to sell more properties.
Earlier this year the Department of Housing organised a European road show to promote Spanish property overseas.
Now the regional government in Valencia, a location that is very popular with foreigners, has set up a commission to study ways to sell more homes to foreigners.
In recent years, 23% of properties sold in Valencia have been bought by foreigners. The commission will study the market and ways to stimulate foreign demand for both purchase and rent.
‘We have to find out where the housing stock is and who the potential buyers are,’ said Isabel Bonig, the Valencian minister responsible for housing. She added that 30% of all sales to foreigners in Spain are in Valencia. Alicante is the most popular area with foreign buyers, accounting for 85% of sales.
The commission, comprised of government officials and representatives from the notaries, registrars, and chamber of commerce, will also look at ways to stimulate demand and promote property with a website, permanent information points and marketing activities.
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There is evidence that foreign buyers are returning to the Spanish market. Property sales made by foreign residents in Spain experienced an increase of 24.7% in the third quarter of 2011 compared to the same period last year according to statistics from The Ministry of Public Transactions.
This figure takes into account all foreigners who live in Spain while further statistics show that the provinces with the greater number of purchases by foreign residents were Alicante with 2097, Malaga with 951, Barcelona with 607, the Balearics with 516 and Santa Cruz de Tenerife at 476.
With this in mind, Spain looks set to continue this trend according to experts with a final rush of property buyers seeking out Spanish real estate. Experts are suggesting that tax breaks and low interest rates on savings accounts will be the main factors encouraging buyers to hunt down bargains.
‘The increase in property sales to foreigners shows that many buyers have been discerning enough to strike while the iron is hot and purchase properties that are well priced and in excellent locations,’ said Marc Pritchard sales and marketing director of Taylor Wimpey España.
The Holiday Lettings’ Insight Report for 2011 identified that there was a 3% increase in the number of enquires about buying Spanish property between January and October this year compared to the same period in 2010 while the report also discovered that people looking for holiday let opportunities in Spain was the second most enquired about destination among buy to let investors, after the UK, between January and October 2011.
Indeed, sellers dropped their asking prices by an average of 8.2% in 2011, according to Idealista.com, one of Spain’s leading property portals.
In terms of the cost per square meter, the average Spanish home now costs €2,084 per square meter, down from €2,270 per square meter a year ago.
‘Price falls accelerated in 2011. Everything suggests they will continue falling in 2012, by how much depends on what the banks decide to do with their real estate assets,’ said Fernando Encinar, head of research at Idealista.
‘They (the banks) will be the ones to slow down or speed up the price adjustment, and private sellers will have to reduce their prices and expectations, led not only by the economic uncertainty but also by what banks do with their prices,’ he explained.
Encinar is confident that the demand will be there if the price is right, and if banks will lend.
This article was republished with permission from Property Wire.