News: Spain market heading for winter chill?

Tue, 20 Nov 07

Given the kind of headlines which have emerged with the slowdown in the Spanish property market, one might sense the palpitations experienced by news that property sales in the country are going down by 45 to 50 per cent this winter...

The reality, however, is very different, according to Les Calvert, director of overseas real estate website Property-abroad.com. "Sales obviously do decrease over the winter period, especially on Spanish mainland," said Mr Calvert, who explained that the real reason for this was simple a seasonal habit which saw people enquire about properties between the summer holidays and November, then again in the new year after a Christmas hiatus, with the actual visits to check out the properties prior to buying taking place in the warmer months.

The exception, he noted, was the Canary Islands, due to their latitude and warm year-round weather. More importantly, Mr Calvert noted, the sales might drop off in winter on the mainland, but the reverse is true when it comes to the number of enquiries: "People do sort of gather around the fire and think they've had enough so the enquiries do tend to busier during the winter periods, especially after Christmas."

Seasonal factors

Thus it may be fairly assumed that the sales figures in wintertime are certainly not an indication of a sudden market fall, but rather a seasonal factor. But many still doubt the long-term strength of the market due to the slowdown and claims of over-building in certain areas.

However, there are still plenty of factors that can be mentioned in favour of the Spanish property market. Spain property.biz cited the foreign investor-friendly government policies and the fact that there are just two taxes to pay - income tax and refuse collection tax - as major attractions. In addition to this there are those which appeal specifically to the British, such as the weather.

Already both Barclays and Yorkshire Bank have seen increases in enquiries about lending to buy in sunny climes this year, a fact they attribute to the wet summer. This has further been confirmed by the news that research from travel agency TravelRepublic.co.uk has established a 500 per cent year-on-year increase in bookings from Britons heading to Spain over Christmas.

Good news for BTL

This is good news for buy-to-let investors as this boosts the potential market for rental holiday property. While a drier summer in Britain next year may diminish this factor, Spain will - barring something particularly unexpected as a result of climate change - always offer a surer prospect of good weather.

Then there is the long-term migration factor. Today the Independent reported that the number of Britons migrating overseas has now reached 600 per day, according to the Office for National Statistics, with sunnier countries being the popular destinations. While some head far away to Australia or the US, Spain and France get the bulk of European emigration. 56,000 people headed to Spain last year.

Thus with Britain providing ever more people wanting to either live or go on holiday in Spain, the property market there can enjoy the prospect of ever-increasing demand from the UK, which will continue to underpin the market, whatever time of year it is.




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