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Property in Spain Price flattens out

Yet again the British press are into a bit of Spain bashing, There's nothing like asome bad news from Spain to make you feel better with life in old blighty is there? Bit like the feeling you get when your neighbours shed catches fire.

Those Headlines like "Spanish property owners in panic" sell newspapers. We've been here (Spain) for nearly two decades and no one I know is having any panic attacks. Because of the the vast influx of Brits in Spain over the last 3 decades we have had two distinct property markets, domestic and foreign, unlike France, Italy, Ireland or the UK where you could reasonably expect to sell your property to either a national or a foreigner.

Both property markets have happily co-existed together, very few foreigners buying into Spanish Areas and very few Spanish buying into tourist areas. Only three times in the past thirty five years has there been any upset when due to either over development or oil crises, property prices fell for a very short time.

After the Millenium there were several changes in the property market in Spain, introduction of the euro, currency and property speculation from the new states from the old USSR and Europe, low interest rates, banks flush with money to lend and middle aged people releasing equity from their homes to fund their investments all joined together to fuel the biggest growth in property building Europe has ever seen on the Costa del Sol and Costa Blanca. This was further boosted by the collapse of traditional investment vehicles such as pension funds, stock markets and insurance policies with investors looking for a safe haven for their money.

The domestic property market in Spain carried on oblivious to all this still rising by 5 - 10% per year whilst the foreign investment market went into orbit with rises of 20 - 30% per year. Recently we've had over six years of massive increases in this sector with investors and developers making great returns.

A lot of the press stories led on the crash of real estate developers funds on the local Stock market with building companies losing aprrox 35% of their equity, what they failed to point out is that for the past seven years they have been making up to 65% per year.

What is happening is a readjustment in the property market. The investors markets and the local market need to get a little closer nearer to each other that's all. Investors and property owners who hang around for the medium to long term will see a rapid return to sensible growth, after all property IS and ALWAYS HAS BEEN the best medium or long term investment. Little Hiccups may provide headlines but can never affect your medium term property investments.

Some investors will get their fingers burnt (thankfully not our customers) but then some investors seem to behave like sheep or lemmings rushing towards the pot of gold with no real knowledge or simply because Jim down the local pub bought one so it has to be a top investment. Possibly a certain area is trendy... (remember Provence and Tuscany?).

This will happen also in other so called emerging markets such as Northern Cyprus, Bulgaria, Romania and the Baltic States. used to work as a consultant in some of these markets ten years ago and that was the time to invest not 2007. Watch out for the newspaper headlines soon, "Life savings gobbled up in Turkey" or "Couple lose everything in scary bulgary"

So are you a property owner in Spain? Here's my advice - Get yourself a bottle of Finca Luzon jumilla red, relax, enjoy the weather and don't worry - We are talking about bricks and mortar here and Spain has made 17% pa for the last 30 years despite these occasional hiccups and will always continue to.

Article Source: http://www.topicinfo.com

Russell is a Spanish property expert based in Murcia. His very popular web site, Murcia Direct, caters for Polaris World and Murcia rentals and he also is a Golden Partner of Polaris World Golf Resorts

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