Spanish property is enjoying a new wave of overseas investors, most likely due to the substantial discounts on offer. Foreign investment in property in Spain surged by 32.8% in the first half of 2011 over the same period in 2010, to 2,445 million euros, according to the Bank of Spain.
Moreover, these investments exceeded 1,000 million euros for a second consecutive quarter between April and June, something not seen since 2008, before the property bubble burst. In this second quarter, the increase over the first quarter’s transactions was 16.1%.
El Mundo reported that foreign investment in property in Spain has fallen steadily since 2003, when it peaked at 7,072 million euros, down to 6,650 million euros in 2004, 5,495 million euros in 2005 and 4,716 million euros in 2006.
However, this downward trend stopped in 2007, with 5,341 million euros from foreign property investors over the year, 13.3% more than in 2006.
Spain gained 5,331 million euros in foreign direct investment until the end of 2008, up 1% over the same period in 2007, but in 2009 the property crisis discouraged investments, which then fell back to 3,651 million euros.
Due to the importance of foreign investment, the Ministry of Public Works embarked on a ‘road show’ on April 1, to encourage and direct foreign demand for housing on the coast, which accounts for more than 50% of the ‘stock’ of unsold housing. The next round of meetings with developers, financial institutions and investors will take place in London in mid October.
Spanish investments in real estate abroad, on the other hand, fell by 44.8% during the first half of 2011 compared to the same period in 2010, which deepens the decline of 17.4% registered at the end of last year.
