Holiday home investment up by 17 percent in 2006

INVESTMENT in second homes will reach 28'929 million euros in 2006, which is an increase of 17.02 percent from the 24'727 million euros predicted for this year. This was confirmed by Manuel Gandarias, President of Live in Spain, an association which includes the principal Spanish holiday home estate agents. Gandarias was giving a preview of the study on “the holiday home market in Spain: situation and outlook”, produced by the Association and directed by Live in Spain, which expects investment in holiday homes to reach 37'000 million euros in 2008, a total which, according to their calculations, will equal tourist income in the season 2007-2008. Also, Live in Spain estimates that the investment in the holiday home market will continue to grow in the next five years, reaching 45'000 million euros in 2010. The demand for holiday homes in Spain will rise to 121'000 homes next year, which is an increase of 3.56 percent in comparison with the almost 117'000 houses which will be sold this year, according to the association's estimates. Of the total second home market, the national demand is for 68'555 houses, while foreign demand amounts to 52'288 homes in Spain. This, according to Gandarias, means that the market is almost evenly split between Spanish and foreign buyers, although he believes that in the next few years the rise in investment will come from third markets, such as the United Kingdom and Germany. Because of this, the president of Live in Spain predicts that the demand for homes situated around the coast will grow in the next five years and reach 150'000 in 2010. In spite of this positive outlook, the president criticised the lack of support by the Administrative bodies with regard to the promotion of the holiday home market and bringing better stability to the sector. “The holiday home market is an important part of the estate agency sector and, although it is only 25 percent of the total, it could reach 30 percent if the demand for first homes falls” he said. Gandarias stressed the economic importance of the holiday home market in Spain.
He said it is a key factor for the generation of employment, not only in the construction industry but also in the long run, with staff necessary for the maintenance of the services offered by the new residential complexes.