Scandinavian Interest in Costa del Sol Property rises

According to the Ministry of Industry, Energy and Tourism, which released its latest statistics for tourism figures for the first quarter of 2014 recently, Scandinavian countries contributed to Spain’s surge of spring holidaymakers with 1.2 million visitors, an 8.3% increase on the same quarter in 2013. Scandinavians come, they see what they like and a significant proportion of them eventually returns to buy a holiday or retirement home in Marbella, Nerja, Fuengirola or other parts of the Costa del Sol.

Spanish banks have been slow to react to this “emerging market”. However, they are now starting to court Scandinavians already living at the Costa del Sol and those who may become future clients. Caixa Bank invited the Swedish communities of Marbella, Nerja and Fuengirola to a number of open day style meetings to present information about the bank’s financial services in particular and the country’s economic outlook in general. Around 500 people from these Swedish communities attended the meetings, where they were able to ask some of their most pressing questions and learn of the bank’s social projects in the greater Marbella area, too.

As one of the largest expat communities in the Malaga province, the Swedish contingent of property owners and those who may potentially become homeowners matters greatly to Caixa Bank. The Marbella meeting took place at the La Quinta Golf Hotel, where Scandinavian visitors received information about the real economic and social situation in Spain and, so Caixa Bank’s representatives hoped, went away with greater confidence in the country’s financial institutions.

The bank also presented information on the country’s tax system with regard to foreign residents and non-residents, whose knowledge of the full implications of their own country’s Double Taxation Agreement with Spain is often patchy.

With a banking presence in 14 countries and ca. 13.6 million clients in total, Caixa Bank is one of Europe’s biggest financial institutions. The first quarter of this year Spain saw an influx of 10.1 million foreign tourists, a significant number of whom will eventually become semi-permanent or even permanent residents with a bank account and a mortgage.
 
Tourism figures for the first quarter rose by 7.9%, compared to the first three months of 2013 and this has been a steady trend for the past few years. Therefore, foreign communities, be they resident or just passing through, matter greatly to the Costa del Sol’s economy and therefore Caixa Bank.

Tourism, not property sales will improve Spain’s economy

Foreign expenditure helps to employ local people, not just when tourists return to become holiday home owners. In the first three months of this year international visitors spent EUR 9,827 million, a 5.6% growth compared to the same quarter in 2013. Non-resident visitors contributed to Spain’s economy with 91 million overnight stays, a 7.4% rise on last year’s first quarter.
 
Andalucía welcomed 1.2 million visitors, many of whom decide to come back and remain at the Costa del Sol for longer periods of time, not just for a holiday. Renting a Marbella property before taking the next step and buying one may be responsible for the price of rental housing in the Malaga province having remained fairly stable despite falling house prices.

At the end of March this year, a landlord would have received an average rental income of EUR 618 per month before maintenance costs and taxes. This represents a fall of 4.86% compared to the same month last year, but a small rise of 0.36% compared to the previous month and a 0.1% increase over the final quarter of last year, according to data compiled by property portal pisos.com which covered all of Spain.

Although this small increase is reason to cheer, the portal’s CEO, Michelangelo Alemany, warned that such increases didn’t amount to news Spain’s property market had turned a significant corner. Demand was still kept in check by the poor availability of credit, with many people, foreigners and locals alike, still renting until the market improves and mortgages become easier to obtain.
 
“Financing conditions are slowly becoming more flexible, but it is too early to anticipate a massive conversion of renters to homeowners. The number of renters will still grow for a while yet,” Mr Alemany stated.

Year-on-year, Andalusia saw residential rent increases  of 0.06%, a positive trend that may convince more Scandinavian investors to snap up Marbella property bargains, as they tend to obtain finance in their own countries rather than bother with Spanish banks.