Spanish Property: From an Investor's to a Consumer's Market

The Spanish property boom that took place over the last ten years seems to have come to an eventual end throughout 2007, when overall prices rose by 4.8%. This price increase is normal for a non-booming market but is very modest when compared to yearly increases of up to 20% experienced during the real estate boom.

This transition from a booming to a non-booming market signifies a negative change for investors to whom Spanish property no longer represents a lucrative opportunity for quick, easy profits. With reduced national demand and settling prices, the Spanish real estate market is no longer and investor’s paradise.

But for private consumers searching abroad for a retirement or vacation home in a beautiful, easygoing environment, the shift in Spanish property has been a positive change. The re-stabilization of prices, while reducing the chance for quick turnover and huge profits, has made the market a more consumer-friendly place for a number of factors.

From the perspective of a private homebuyer, Spain’s booming property market during the last decade gave rise to hostile conditions. Individual buyers found themselves helplessly stuck between the interests of these powerful entities, which invested minimal time and effort in satisfying actual consumer needs and sought instead to multiply their profits at all costs.

Sellers, faced with a seemingly endless flow of demand, were all but guaranteed a quick and easy transaction. Buyers, on the other hand, were placed in disproportionate competition among themselves. This created a situation where the rights and needs of the buyer were often bypassed or altogether ignored.

Thus, for the last decade, the Spanish property sector has been the playground of powerful investors, construction companies, estate agencies and other sector-related businesses. Visible proof of this could be seen through the disproportionate number of estate agencies that popped up on nearly every street corner and the many construction cranes that towered above the Spanish cityscape.

During this ten-year period Spain’s economy depended in large part on the tremendous stimulation generated by the real estate boom at various levels of the country’s economy and infrastructure. Spanish cities were radically modernized and today enjoy excellent infrastructure, services and quality of life.

As this tremendous property boom finally comes to an end, private consumers find the Spanish real estate sector to be a much more accessible, amenable market. Once-skyrocketing prices have returned to regular levels, and companies are once again pacing adequate emphasis on consumer satisfaction.

Buyers are no longer in fierce competition with each other and can approach the home-buying experience with a higher degree of relaxation and confidence. And while market conditions will always be in a state of change for the better or for the worse, the experience of living in Spain presents a more stable reality.

Excellent weather, breathtaking sceneries and a profound and inviting culture make Spain one of the best locations on the planet to invest in an overseas property. As long as these factors remain present – and it’s hard to imagine they’ll change anytime soon – foreign homebuyers will continue to be drawn to this beautiful country.