Octubre 2011· Newsletter

Manzanares Abogados · Lawyers
www.manzanares-es.com

Foreign investment in Spanish real estate growsForeign investment in Spanish real estate grows

a 32,8% up until June

The foreign money returns mightily to the Spanish “brick”, quite probably as a result of the important discounts. The foreign investments in real estate grew 32,8% during the first semester of 2011 in Spain, as compared with the same period of 2010, reaching, according to the Bank of Spain, 2.445 million Euros.


Moreover these investments have been superior to 1.000 million between April and June for the second quarter in a row, something that did not happen since 2008 before the last slump in these purchases.  In this second quarter the purchases increased 16, 1% in comparison with the first one.


Despite this recovery, the Ministry of “Fomento” has put into practice a 'road show' to boost the foreign demand and direct it to the properties on the coast.

 

However this trend was corrected in 2007, when 5.341 million Euros coming from foreign investors were received, 13, 3% more than in 2006.
Following this trend, 5.331 million Euros were added as a consequence of foreigners’ direct investments in Spain before the end of 2008, 1% more than the same period in 2007.


In 2009, the “brick” crisis discouraged these investments, that fell 31,5% to 3.651 million.


In spite of the foreign investments, the Ministry of “Fomento” is carrying out in two stages since April, a 'road show' to encourage the foreign demand and direct it to the dwellings on the coast where more than 50% of the stock is located.


After a first phase of institutional contacts where the situation of the Spanish real estate market was set out in the main European economic centres, a second phase was initiated last September. Developers and banks led by “Fomento” have travelled to Hamburg (Germany) to rebuild the commercial bridges destroyed during the crisis.

 

In 2009 the “brick” crisis discouraged these investments that fell by 31, 5%.

 

According to “Fomento”, and as part of these strategies, the secretary of the Ministry of Housing, Beatriz Corredor, will accompany 14 Spanish firms to Stockholm (Sweden), including developers and banks that will meet investors. The next event will take place in London in October.

 

Spanish investments abroad, in the opposite direction.

With respect to the Spanish investments in real estate abroad, they fell 44,8% during the first semester of 2011, in comparison with the same period in 2010, which worsens this way the 17,4% drop recorded at the end of last year.
Nevertheless these investments totalled 126 million Euros at the end of the second semester which means twice as much as the 60 million Euros used to buy properties abroad during the last three months of 2010.