Housing market in Spain expecting a surge in investors
23rd February 2011

The property market in Spain is all set to experience a surge in foreign investors following the news from experts predicting prices in 2011 will continue to drop.

The continued price drop is expected to come as a result of a combination of forces in the Spanish economy including an increasing unemployment rate, an excess of property in Spain following the collapse of the market and a high current level of bank repossessions.

The Spanish housing market has gone through a tough year, with some 200,000 distressed properties set to be added to the already overloaded market.

Present residential prices in the country are down 5% on the same period last year, which has compounded the diminishing of prices since 2007, with current levels at just 80% of those before the market collapsed.

Will Needham, editor of SpanishPropertyMagazine.com, believes the country's property market to be in a bad state, and will not recover anytime this year; however, he also advised prospective investors who were looking to buy at the 'bottom of the market', to wait a while before making their purchase.

He said: "The best data available to us indicates that prices are still falling and will continue to do so throughout 2011. The rate of decline appears to be falling, so those looking for the optimum time to buy should continue to exercise restraint". Potential buyers should also be selective regarding the location and type of property they decide to purchase.

There are plenty of bargains out there; nevertheless, holiday home buyers should look extremely carefully at the merits of each offering before making their final decision. The market is sporadic, so any investment should be made on a medium to long term basis.

If you buy a Spanish property then you will need to ensure it is fully covered by holiday home insurance. Here at Property Cover Plus, we can tailor a policy to meet your specific needs, ensuring no money is wasted on cover you don't require.