More British Buyers willing to secure their Spanish Place in the Sun

Out of the 156 international exhibitors promoting holiday home buying destinations at the “Place in the Sun” real estate fair in London over the weekend of 28th to 30th March, 56 or one third were dedicated to Spanish property. The dream of owning a home in Marbella at the Costa del Sol, it seems, has reawakened in many British buyers.

More than 6,000 visitors came to see what properties they could get for their money in holiday destinations around the world. Around 45% of British residential real estate investors are ready to purchase a Spanish property within the next six months, according to real estate advertising and marketing organisation Inmoaction, who compiled data from the 112 property enquiries received during the three-day fair.

The “ Place in the Sun” fair caters largely for people looking to buy a holiday home or permanent home in the sun, so 98% of visitors who attended this year’s fair would be looking to buy just one property each, not investing in a portfolio of Marbella or Costa del Sol properties.

Other major international exhibitors’ stands were dedicated to destinations like France, Italy, Brazil and Portugal as well as the US; the Sunshine State Florida was in particular demand.

Out of the 112 enquiries Inmoaction collected, a round 60% were from property buyers interested in Spain’s Catalonia, Andalusia and Valencia provinces.

“We can confirm that, while these are the three preferred regions, the enquiries are varied, and agents from any region of Spain can generate a significant niche market in the UK. For example, surprisingly we have received eleven enquiries for the north of Spain alone, including Burgos,” explained Daniel Talavera, Inmoaction’s director. He added that all buyers preferred 3-bedroomed properties.

The rekindling of British buyers’ interest in Spanish holiday homes is likely to be the result of the decline in Spanish property prices. Since the market crashed in 2007, Spain’s property market has seen a 47% price fall across the board and prices are still falling in many areas. Just as its neighbour Portugal, Spain has seen a resurgence of interest from its traditional markets such as Germany and Britain as a consequence.

Emerging Markets

However, according to a new report by Meravista, an Algarve property portal, Russian buyers are also out in full force to snap up Spanish and Portuguese homes. Meravist’s report makes for interesting reading, for it dispels many myths why Russian buyers invest in property abroad.



While the common consensus among estate agents has been that Russians would predominantly buy in sunny locations, where they can have access to a Golden Visa, leading to immediate rights to residency in an EU-member state, Meravista’s report has revealed that this is not necessarily so.

Instead of luxury, sun and ease of cross-border travel, Russian buyers value stability above all other factors. Their number one country to invest in is rain-soaked Britain, followed by Germany and France.  The UK property market especially, because Britain is still seen as the most stable EU country, both politically and economically.
 
Although Marbella and the rest of the Costa del Sol have experienced a surge in Russian investment over the last couple of years, wealthy Russians are taking their money where they envisage the greatest capital gains, namely London and Paris, where Russians account for 20% of all commercial real estate purchases.
 
The average well-to-do Russian investor has $5.5 million to spend, which explains the rise in sales of London’s prime properties but also why office rents have not suffered as badly in the capital as the downturn of the UK’s economy might have suggested.

Spain and its neighbour Portugal, along with Bulgaria, are still considered bad choices for real estate investment due to falling prices and uncertain economic outlook. While market analysts believe that the incredibly cheap property prices in these countries should lure more Russian buyers to the fore, they also acknowledge it may take up to 5 years before investors will be able to see capital gains.
 
Interestingly, most Russian investors calculate along those lines, viewing their property purchases, be they in London, Paris or in Marbella, very much as a medium to long-term investment. However, at least 50% of all property purchases made by Russians in 2013 were for a place in the sun holiday home.