These figures were somewhat higher in many regions, e.g. 14.4 per cent in Galicia, 16 per cent in Almería and Huelva (Costa de la Luz), and 18.1 per cent on the Costa del Azahar in 2005. Figures published by the Ministry of Housing for the first quarter of 2006 showed a national price rise of 3.4 per cent, with some areas considerably above this (e.g. the Balearics and Girona (Costa Brava): 4.7 per cent, Malaga: 4.4 per cent and Castellon (Costa del Azahar): 4.1 per cent, which suggest annual increases for 2006 of between 13 and 19 per cent.
The most expensive places to buy a property in Spain are the major cities: Madrid (average €2,785 per m2), Barcelona (€2,366 per m2) and Malaga (€2,049 per m2). At the other extreme, prices in the provinces of Extremadura and Galicia average around €1,000 per m2.
The property boom has brought with it a massive increase in construction with over 800,000 new homes started between June 2005 and June 2006 alone (up 4 per cent on the equivalent period in 2004/2005), as the skyline of cranes in many areas testifies. In resort areas, rising prices are fuelled by the seemingly endless demand for holiday homes, particularly from foreigners (especially British), and nearly one third of homes in Spain are second or holiday homes.
However, higher property prices and interest rates meant that non-resident investment in property fell by nearly 17 per cent in 2005 (Bank of Spain figures) and this tendency is expected to continue during 2006. On the other hand, domestic demand for property continues and nearly a million properties exchanged hands in Spain during 2005, an increase of over 6 per cent on 2004.
Many experts, including the Bank of Spain and The Economist, consider the current property situation to be inflated, with property overvalued by as much as 20 per cent, and have warned of the dire consequences a drop in prices would have on Spain’s economy and on individual mortgage payers. Nevertheless, it’s generally expected that property prices will continue to rise in the second half of 2006, with overall increases for the year of over 10 per cent; a Ministry of Housing report published in July 2006 predicted a 12 per cent rise. Few are daring to predict the market in 2007, although one expert expected an increase of between 8 and 10 per cent.
Apart from obvious factors such as size, quality and land area, the most important consideration influencing the price of a home is its location. The closer a property is to a major city, the more expensive it is; for example, an average quality two-bedroom apartment in a reasonable area costing €120,000 in a town costs two or three times as much in a major city or a fashionable coastal resort. Property is cheapest in rural areas, where a farmhouse with outbuildings and land may cost the same as a studio apartment in Madrid or Marbella, although prices in rural areas situated relatively near popular resorts have risen spectacularly in recent years.
The quality of properties varies considerably in respect to materials, fixtures and fittings, and workmanship. Value for money also varies considerably and you should compare at least five to ten properties to get a good idea of their relative values. You usually pay a premium for a beachside or golf course ‘front-line’ property.
When property is advertised, the total living area in square metres ( metros cuadrados), written as m2, and the number of bedrooms ( dormitorios) are usually stated. When comparing prices, compare the cost per square metre of the habitable or built ( construidos) area, usually referred to as metros útiles, excluding patios, terraces and balconies, which should be compared separately. If you’re in any doubt about the size of rooms you should measure them yourself, rather than rely on the measurements provided by the vendor or agent.
A garage ( garaje) is rarely provided with apartments or townhouses, although there may be a private parking space or a communal off-road parking area. Some apartment blocks have underground garages, and lock-up garages can often be purchased separately for apartments and townhouses for €15,000 to €40,000 in resort areas. Villas usually have their own car port or garage. Without a garage, parking can be a nightmare, particularly in cities or busy resort towns and urbanisations in summer (or at any time of the year in some places).
For those seeking the sun and who can choose where they want to live, the cheapest properties are on the lesser known costas, such as the Costa de Almería, Costa Cálida and Costa del Azahar.
Prices on the most popular costas, the Costa Blanca and the Costa del Sol, have risen dramatically in the last few years and it’s now almost impossible to find a bargain. The Costa del Sol has some of Spain’s most expensive property, particularly along Marbella’s ‘golden mile’ where you have to pay at least €1.5m for a fashionable address.
Prices on the Costa Blanca start at €120,000 for a two-bedroom apartment and from €350,000 for a two-bedroom villa. Prices on the Costa del Sol are usually at least 25 to 50 per cent dearer than the Costa Blanca, although they vary considerably depending on the area and town. Prices are generally slightly lower on the less popular eastern Costa del Sol than at the western end, i.e. west of Malaga city.
Property in the Balearics is generally around 25 to 50 per cent more expensive than on the costas, and Ibiza and Majorca also have some of Spain’s most expensive property. Prices in the Canaries (which have year-round letting potential) are now less expensive than on the mainland, particularly on the smaller and less accessible islands, although island properties generally command a premium over their mainland counterparts due to stricter building controls, the higher cost of building land and the smaller market. Approximate prices on the costas are shown below:
The more expensive your home, the more you must pay in property taxes, wealth tax and the deemed income tax on letting income, which are based on a property’s fiscal or rateable value. Community fees for a community property also rise in direct relation to the value of a property.
 Blinklist |
 Bloglines |
 Del.icio.us |
 Digg |
 Diigo |
 Facebook |
 Furl |
 Google |
 Ma.gnolia |
 Mr.Wong |
 Netvouz |
 Simply |
 Spurl |
 StumbleUpon |
 Technorati |
 Yahoo |
