Foreign residents fuel revival in the property market

However, sources at the ministry called for caution because during the second quarter of 2006, in the midst of the property boom, 30'000 property transactions were carried out.

Nevertheless, these latest figures have been welcomed by the real estate sector considering that the number of foreign residents registered in Spain now stands at 5.7 million, some 40'447 less than this time last year.

Market crash
But, the crash of the Spanish housing market, which has led to property prices falling sharply has proved very attractive to British buyers armed with a Pound which is much stronger than it was against the Euro this time last year. Scandinavian markets have also been attracted to Spain as an investment destination as have the Germans.

According to the ministry, average house prices are at around the same as they were in 2004.
2008 was the boom year for the foreign market, according to the ministry while the following year, the foreign property market crashed like the sector as a whole when during the first quarter of the year just 5'039 property transactions were secured across the country.

According to the Bank of Spain, foreign home buyers are currently spending 2.5 percent more on a property than they were a year ago and that during the first three months of this year, 1'163 million euros was spent by foreign property buyers.

Spanish market blues
However, according to the Bank of Spain, the Spanish market is still failing to show any signs of a revival.
For example, during the second quarter of this year, the amount of money invested in overseas property by Spanish buyers was 95 million euros, 50 percent less than during the same period last year.

And now Spanish banks are becoming increasingly desperate to release the thousands of repossessed properties they have on their books.