Palma.—Foreign investment was up by 17 per cent in 2012 to its highest level since 2004, according to the latest figures from the Bank of Spain, and the Real Estate Registry report shows that the British accounted for a 16.61 percent share of the foreign property market.

In total, foreign investors accounted for eight percent of total property sales in Spain last year and in second place, and a long way behind the British, were the French with a 9.96 percent market share.

The Russians were third with a 9.62 percent share followed by the Germans with a 7.92 percent share.
However, the British have been stronger.
For example, in 2010, the British accounted for a 23.44 percent share of the market, but it still remains the dominant force and, as a combined investment block including the Russians, French and Dutch, grew by six percent last year.

And, while the sales figures are encouraging so too are the investment figures.
The Bank of Spain's report shows that foreign nationals spent 5.54 billion euros on Spanish property last year, compared with 4.7 billion euros in 2011, and 3.6 billion in 2009 euros.

Confidence
In the final quarter of last year alone, overseas investors spent 1.8 billion euros, up by 56 per cent compared with 2011, and by 92 per cent compared with 2010, showing just how much confidence seemed to increase as the year progressed.

A combination of falling property prices (some prices are down by 50 per cent since the peak) and efforts being made by regional real estate agents and tourism boards to improve Spain's image among investors has contributed to the increase in investment, but the strength of the pound against the euro last year also helped in terms of improving affordability.

Right now, however, property in Spain can be acquired on better terms than have been seen for quite some time.
If investors do their homework, seek proper advice, and are willing to be in it for the long term, it is still possible to buy with confidence, say the experts.

And, the Spanish government is making a concerted effort to court even more foreign investment by touring key global markets offering a wide range of incentives to potential foreign property investors.

Further encouraging news is that last year, the British, Dutch, Scandinavian, Belgian and Russian property investors preferred coastal destinations and the Balearics as the most popular accounting for nearly 25 percent of the overseas property market.

Last year, for example, British investors bought a total of 4'148 properties in Spain.
2'162 (52.12 percent) were new builds while 1'986 (47.88 percent) were used housing.
The Bank of Spain's report, also published this week, reveals that on the flip side, at the moment the domestic Spanish property market is flat with little increase in activity either at home or overseas.

Fifth year fall
In fact, last year, for the fifth consecutive year, Spanish investment in overseas property fell.
However, the Bulletin has learnt that while the first two months of this year were very buoyant for the foreign property market, business has slackened off slightly since Easter but with the tourist industry forecasting a very good year for the British market, that should translate into a surge in interest in properties, especially if the pound can regain some of its lost strength.