Property Investment Advice - Investing in Spain
Published on 16th July 2008 by Don Ross
There are still some compelling reasons for property investment in Spain.
Did you know?
A total of 41,026 residents left the UK in 2006, the highest number in Europe, with total emigration increasing by 30% from the UK since 2001.
Why Spain ?
Spain offers the best quality of life in Europe, despite families earning an annual net income of just £16,789 - £8,500 below the average and less than half that of the UK.
The country enjoys low taxation, cheaper essential goods, higher than average life expectancy and a generous holiday allowance, uSwitch said.
Is the UK really that bad?
The research that led to the recent report has revealed that, despite residents earning the highest incomes, the UK offers among the lowest quality of life in Europe. The study assessed 19 factors to rank the UK in relation to nine other major countries across Europe.
Amongst the elements that made up the comparison, the price of fuel and other essential goods were high, spending on health and education was below average, holidays were shorter and, coupled with late retirement, the report placed the UK just above Ireland at the bottom of the uSwitch.com European quality of life index.
Despite earning more than £10,000 more than the European average, British families pay the highest prices for diesel, 18% above the average, and the second highest price for unleaded petrol, 6% more than average. They also pay 49% more for gas and 5% more for electricity - the third highest prices in Europe.
Spending on healthcare and education in the UK is below the European average while life expectancy is the third lowest at 78.9 years, compared to 80.9 in France or 80.7 in Sweden.
Whilst workers have the third highest retirement age, they also have the shortest holiday entitlement - a week below average, according to the study. The weather doesn’t help the case at all, with Britain receiving 80% less sunshine than Spain and 17% less than the European average.
Why invest in Spain ?
Despite the gloom over ‘credit crunch’ and collapsing housing markets, the shrewd investor will always buy when the market is low. It’s obvious really, buy low and sell high is the fundamental key to making money.
The housing market has always been a cyclical one and is therefore always seen as a medium to long term investment. The cycle has been historically proven and those who buy at the bottom of the market will always have the opportunity to sell later when prices recover. This strategy can also be hedged by investing off plan so that only the deposit is exposed during the build phase with the price guaranteed at the current low level. The benefit is that, as the price of the property increases, the benefit accrues on the whole of the price whilst only a fraction of that price has been paid.
The conditions exposed by the report above will not change significantly any time soon. UK will remain overcrowded and more and more people are likely to look to taking an early exit abroad. If Spain is the best place to live it would seem that there is a ready-made market for selling on or renting out property that has been bought when it was at its affordable best.
Certainly, the overheated market on the Costas will take longer to recover, but areas inland, where emerging market conditions can still be found, would seem to be worth taking a chance on.
Don Ross
General Manager of Ward & Co, has a vast range of experience in both financial services and property development. As an international speaker he has provided the inspiration that has led to wealth creation around the globe.
