Golden visa sales slump as benidorm property booms
Photo: Popsique
Spanish property sales jumped 45 per cent in the first quarter of 2014, according to the General Council of Spanish Notaries, a statistic that highlights the extent to which Spain's property market has improved since the financial crash. Indeed, sales in March were up 37.6 per cent year-on-year.
While much has been made of the potential impact of the country's recently introduced Golden Visas, though, designed to stimulate overseas investment from outside of the EU, new figures from El Pais reveal that the scheme has been something of a damp squib.
Just 72 people have signed up for a residency permit after making the minimum required investment of €500,000 since its introduction in September 2013. Half of these are Chinese and Russian buyers, says Spain's Secretary of Immigration, while other investors have come from Ukraine, Lebanon and Egypt.
The figures do not compare well with Spain's neighbour, Portugal, which introduced its own Golden Visa scheme. 470 were issued last year, according to the country's Foreign Minister, while 49 were issued in the first three weeks of January 2014 alone.
Some estate agents are optimistic that take-up will increase over time.
"[Spain's] figures are very similar to the initial take up in Portugal, where there was only a handful in the first six months, but the first year ended up with over 700 successful applications," Jason Ham, Head of Business Development for Lucas Fox, told The Local. "We expect the same to happen."
Others are more sceptical of the overall recovery. Mark Stucklin of Spanish Property Insight says that while other figures from the Spanish National Institute of Statistics (INE) show sales jumped 26 per cent year-on-year in March 2014, the market is in reality just "bottoming out".
Indeed, the country's recovery in the last 12 months has been distorted by the introduction of various temporary tax break offers, designed to spur sales over short periods. Relative data year-on-year, therefore, is less reliable than is traditionally the case.
Other factors have also clouded the figures.
Bankia told El Mundo property sales tripled in the first quarter of 2014 year-on-year, but Kyero notes that the comparison is from an exceptionally low base: just 659 properties were sold by the group in the first three months of last year because of the transfer of toxic assets to Sareb.
Over a two-year period, though, estate agent Mercers has enjoyed a more stable rise of 60 per cent per annum. Even Director Chris Mercer, though, argues that the recovery can only truly take form once lenders loosen restrictions for borrowers.
Nonetheless, for the Costas, including everywhere from Murcia to Alicante, there is a localised surge in sales underway. Areas such as Benidorm, where a significant expat community, is located, continues to attract Brits, who have traditionally been one of the biggest buyers of Spanish real estate.
Indeed, Benidorm was the third most searched-for Spanish location on TheMoveChannel.com in the 12 months to January 2014, while the Community of Valencia accounted for one in four enquiries - behind only the region of Andalucia, which accounted for 30.84 per cent. A large portion of the site's users are from the UK, indicating sustained interest in Spanish property, particularly holiday homes along the Coast.
According to the land registry's most recent statistics, the proportion of homes bought by foreign buyers in Benidorm stands at 11.2 per cent.
Kieran Byrne, the managing director of HomeEspana, told The Olive Press: “We don’t expect a rapid turnaround in market conditions in Spain, but at least in the Costa Blanca we have seen increased buyer interest.
“More second-home buyers from abroad are discovering how far their money goes here.”
The Golden Visa may not be bringing over buyers from outside the EU, but in Benidorm, the property market's recovery can still bank on the Brits.