There are quite understandable reasons for this – a wonderful climate, simplicity and reliability of the transaction, the availability of mortgages, friendly attitude towards Russians and much, much more. All this clearly outweighs the existing problems. There is also a well–established tradition among wealthy people to buy a house in Spain, so that the real estate market of this country attracts the most attention.
The discovery of Spain
The development of Spain by foreigners began, of course, from the Mediterranean coast and islands. The British began to buy Spanish real estate earlier than others, and in the sixties they had the widest choice of opportunities – in almost any resort it was possible to buy a house or a piece of land for a song.
Stuart Andersen, one of the former editors of the British edition of Homes Overseas, recalls that in 1964 he was offered to purchase a plot in San Antonio on the island of Ibiza for only 500 pounds - and he refused to buy several hectares of land on the very seashore, simply not imagining how he would be able to dispose of them. At the same time, a two-bedroom apartment in Marbella could be purchased for 3,100 pounds, and a studio in Torremolinos did not even reach 2,000 pounds in price.
It is not surprising that, having the widest possibilities for choice, the first foreign buyers of Spanish real estate stayed at the resorts that are most attractive in terms of climate, landscape, as well as transport accessibility. First of all, these are the Costa del Sol and the Costa Blanca, which are still considered the undisputed flagships of the Spanish real estate market. In addition, tourism has been developing purposefully in both these regions since the sixties and seventies, so that potential buyers of real estate were well aware of the advantages of these coasts, and recreation infrastructure and transport were actively developing.
The formation of the market
It's hard to believe now, but until the mid-sixties, Spain was a somewhat backward country by European standards. Having received no economic assistance after the Second World War under the Marshall Plan, she could only rely on her own forces. The adoption of the so–called "stabilization plan" in the shortest possible time made the country competitive - from 1960 to 1974, its economic indicators grew faster than any other country in the world, with the exception of Japan. And yet, Spain got rid of the image of a poor and not too developed country for a long time.
Until the nineties, Spanish real estate was considered not too prestigious and, accordingly, not very expensive, especially in comparison with such traditional buying countries as France and Italy. However, then there was what is without any exaggeration called a construction boom – from 1997 to 2005, prices increased by 170% on average in Spain, and even more in popular resorts.
It would be wrong to assume that such a sharp rise in prices in the country is primarily due to foreign investment. In fact, many factors coincided here that determined the demand from the Spaniards themselves - another round of development of the Spanish economy, extremely low mortgage rates, high availability of borrowed funds, etc. However, it was foreign buyers who warmed up the Mediterranean resorts.
To a large extent, the growth of popularity and prestige of real estate on the Spanish coasts was facilitated by the activities of Jesus Gil as mayor of Marbella. The wonderful transformation of a small town into a fashionable resort is his handiwork. Today, Marbella worthily represents Spain among the most luxurious destinations for holidays and real estate purchases. As for the prices of the local resort properties, they are the highest in Spain – the multimillion-dollar value of the villas does not surprise anyone.
As a result of a purposeful policy to develop the tourism industry and attract foreign buyers of real estate, by the beginning of the 21st century, Spain had become a European leader in these areas. In terms of the number of tourists, it is now second only to France, and in terms of investment in resort housing, it has no competitors at all.
The confident tread of civilization
So, recent years have become a time of unprecedented prosperity for the Spanish construction industry. Apartments in resort complexes were sold out long before construction was completed, and sellers could conduct a very strict pricing policy, spurring an already high increase in the cost of housing. To satisfy the phenomenally high demand, a significant amount of vacant land was required, and in many regions, primarily on the Costa del Sol, the density of development began to exceed all reasonable limits. And besides, urban planning standards.
Indeed, it is difficult to imagine a situation more favorable for the development of corruption. With the light hand of local officials who received bribes from development companies, land on which construction was strictly prohibited was used for new resort complexes. This illegal activity has acquired the greatest scale in the already mentioned Marbella, where almost all the heads of the city hall were arrested last year. There have been no such high-profile scandals in other regions, but this does not mean that there is no corruption there. However, the Spanish government is seriously aiming to make the construction business free from bribes, and I want to believe that this desire will not remain just words.
Excessively dense development has reduced consumer properties of real estate on popular shores, and corruption scandals, extreme in which conscientious home buyers turn out to be, have forced investors to be more careful. As a result, the previous ultra-high rates of price growth are no longer there. The best growth in value in the current conditions is demonstrated by new buildings in those regions where previously there was no dense development.
First of all, such areas include the province of Murcia and its Costa Calida coast. More recently, the purchase of real estate by foreigners was prohibited here, since the largest naval base is located in the main port of the Cartagena region. Now the restriction has been lifted, and the coast of the once agrarian province is rapidly being built up. So far, the main part of the offer is construction at the off–plan stage with prices 15-25% lower than on neighboring coasts such as Costa Almeria and, especially, Costa Blanca.
The interest of buyers in such coasts as Costa Asaar, Costa Dorada and Costa de la Luz is also growing. They are characterized by poor transport accessibility, as a result of which the development of the local real estate market has not been as rapid as on the more popular coasts. But now there are attractive sites for construction, and the prices are not too high. For the same reasons, even the Atlantic coast of Spain, previously completely unpopular, began to be in demand.
As for the Costa del Sol, it's not so bad here either. There is no sign of panic or market decline. The prestige of the coast and the best climate in Spain make the situation very stable, and for those who consider these factors the most important, there is still no better choice. If desired, you can also find projects here that promise good returns, as a rule, they are located closer to Gibraltar.
Costa Blanca was less involved in corruption scandals, and the price level here was not as high as on the Costa del Sol, so today this coast remains quite attractive in terms of price growth. Note that in addition to the traditionally prestigious and expensive northern part of the Costa Blanca, there is also a southern one - less picturesque, but more affordable. It so happened that for Russians it is the Costa Blanca that is considered the most attractive region, so its stable position is good news.
No matter what happens in politics and economics, Spain will always remain a very attractive country for buying a second home – the guarantee of this is the wonderful climate, the friendliness of the locals. Although Spanish prices have not been low for a long time, but the competitive advantages of this country are so strong that its position in the international real estate market is unlikely to be threatened in the foreseeable future.