There was a 27% rise in the volume of overseas nationals who bought properties in Spain last year, according to official figures provided by the Bank of Spain.
According to the data, foreign property buying activity in Spain is back to levels last recorded in 2009, suggesting that international consumer confidence is improving.
While some foreign buyers are purchasing for investment purposes, others are simply taking advantage of the distressed nature of the market, with a view to securing a cheap holiday home in Spain.
Spanish property commentator Mark Stucklin says: “What is driving this increase in foreign investment in Spanish real estate? At least part of it will be due to a significant increase in the number of foreigners buying holiday-homes and retirement homes on the Spanish coast, which some of the estate agents and developers I talk to have noted.”
The Spanish property market is ultimately suffering from a chronic oversupply of homes, which explains why the supply of new homes has come to a virtual halt in order to allow the existing glut of properties to be absorbed.
According to the latest figures from the government, the existing level of planning approvals for new residential properties has fallen by 93% since the peak of the market in 2006.
Article taken from International Estate Agent Today. 17th May 2012