Buy-to-let investors turn to distressed Spanish property12/11/2013
Since the Spanish property boom ended, investors in real estate in the country have largely focused on modern new build homes in popular tourist destinations.
However, the tides appear to be turning and according to the Global Property Guide, more and more buyers are looking to distressed property as buy-to-let investments.
With prices now so low, people are even bulk-buying real estate in anticipation of future gains.
Fitch Ratings claims repossessed residential properties in Spain’s major urban centres can be bought at 71.6 per cent below their original value. Rental rates in the country are now also de-linked from inflation and can be increased by landlords more frequently. This makes the buy-to-let sector much more attractive, especially now lease durations can be much shorter and non-paying tenants can be more easily evicted, the Global Property Guide explained.
Spain is certainly working hard to attract more property investors and has introduced a law whereby foreign owners that rent out their property to working people under the age of 30 can claim tax relief of between 60 to 100 per cent on rental income. With banks beginning to shed distressed assets throughout the country, it is possible for investors to enjoy strong yields. The holiday let market is also a great place to be for buyers in Spain, with tourism numbers remaining buoyant and demand high in places like the Costa del Sol.
Low values are becoming a selling point for Spain and a comparative analysis of data by Fotocasa.es. recently revealed that recovering sales in regions are linked to cheap house prices. Properties247 reported that of the six regions that saw sales increase during the third quarter, four experienced price falls. These include Murcia, Catalonia, Valencia and La Rioja, which saw values decline between 11 and 16 per cent. Beatriz Toribio, head of research for Fotocasa.es, told the news portal: “This data demonstrates that, in the current context of economic crisis and tightening of credit by banks, the only way right now to get rid of the large housing stock that exists in Spain is to lower the price.”
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