Spain’s Golden Visa scheme picks up speed

Spain’s Golden Visa scheme is picking up speed. After a lacklustre start to the initiative, investment soared 62.8 per cent last year, according to reports from newspaper Cinco Dias.

The scheme offers permanent residence in the country, which includes travel within the Schengen area, to investors who spend a minimum of €500,000 on real estate. While similar schemes in other countries have enjoyed strong success, Spain’s Golden Visa scheme has struggled to generate a strong response. Despite that initially slow start, though, new figures suggest that the scheme is picking up speed, with Golden Visa investment jumping 63 per cent in the year to October 2016: from €1.05 billion in October 2015 to €1.71 billion.

Real estate accounts for 94 per cent of all Golden Visa transactions, with Chinese and Russian buyers leading the way. The number of purchases by Chinese buyers jumped 75 per cent year-on-year, while Russian investment volume rose 46 per cent. Madrid and Malaga were the most popular destinations respectively, followed by Alicante, Valencia and Barcelona.

The surge in Golden Visa transactions highlights Spain’s diverse international appeal. Indeed, the country is normally associated with British buyers, keen to retire on the sunny Costas and turn as pink as lobsters alongside other UK expats. With the UK voting to leave the European Union, though, the pound’s weakness against the euro appears to have sapped some of the momentum from British buyers in Spain.

According to data from Kyero, British buyers are now increasingly looking to budget options to counter the more expensive currency exchange rate. Demand for properties below £50,000 on the Spanish site is now “hugely outstripping” supply by four to one.

Richard Speigal, Head of Research at Kyero.com, comments: “There are a host of factors pushing buyers towards ruin renovation at the moment. We’ve seen from the huge boom in searches for Spanish property that the Brexit vote seems to have, if anything, whetted Brits’ appetite for Spanish homes rather than driving down interest. At the same time, buyers from the UK are looking for cheaper solutions as a result of the pound’s decline, so buying a dilapidated farmhouse and doing it up is an attractive option.”

While Russian and Chinese buyers step up their activity, meanwhile, Swedish investors are also moving in to fill any spaces in the market.

According to Shario and Property Registrars, sales to Swedish buyers jumped 22.7 per cent in Q3 2016, while UK sales dipped 16.3 per cent.

Shario co-founder, Mark Stücklin, tells OPP.Today: “Swedish demand is important in Alicante and the Costa del Sol, where they are the second biggest group of foreign buyers behind the British. I expect they will become even more important after Brexit, which has reduced the number of British buyers.

Indeed, Swedish sales at the end of 2016 (2,797) outstripped 2015 (2,755), with home purchases in the last two quarters each reaching around 1,000.

Like Russian and Chinese buyers, Swedish purchases are also focused on Alicante and Malaga.

Daniel Nilsson, Chief Executive Officer, of Fastighetsbyrån Overseas, the international division of Sweden’s biggest estate agency, comments: “The main bulk is concentrated on the peninsula, 54 per cent on Costa Blanca and 29 per cent on Costa del Sol… We also see increasing demand for big cities like Barcelona, Alicante and Málaga, not only the traditional destinations.”

Swedish buyers are “loyal and less impulsive” than British buyers, notes Shario.

With overall enquiries for Spanish property doubling in December 2016 on TheMoveChannel.com, wherever they come from, whether high-end or on a bargain budget, Spain’s housing market does not look to be short of foreign buyers in the near future.

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