South Americans Scramble To Invest in Spanish Real Estate

South Americans have been flocking to buy up Spanish real estate assets in recent months, lured by attractive prices and prime locations in both the commercial and residential markets.

South Americans Scramble To Invest in Spanish Real Estate

South Americans Scramble To Invest in Spanish Real Estate

According to real estate agent Savills, investment in Spanish commercial property rose 10 percent in 2012 to 2.1 billion euros, driven by a surge of interest from South America.

South American investments made up 22 percent of the total in 2012, up from around 0.5 percent the previous year, and accounting for 55 percent of international investment.

Investors from Mexico, Venezuela and Colombia – to name but a few – are cashing in on the heady economic growth in their region to take advantage of opportunities in Europe. They have deep pockets and a long-term view.

So what makes Spain´s real estate market a good deal for its wealthy South American cousins?

  • Prices: These have plummeted since peaking late 2007 after a decade- long property boom. According to Eurostat data for EU member states released end-January, Spain notched up the largest annual decline in housing prices of 15. 2 percent in the third quarter of 2012 .
  • Location, location, location: Prime office property in Madrid is enticing Venuezelan and Colombian buyers, while big-spending Brazilians are heading for Spain´s islands and beach resorts, snapping up luxury villas and apartments on the Costa del Sol where prices have already dropped 50 percent in some areas.
  • Strong existing commercial links: Spain invested heavily in South America when it suffered a crisis over 10 years ago, fuelling strong growth in the banking, telecommunications and real estate sectors.
  • Historical, cultural and language ties: Spain can play an important role as a natural entry point for South American companies to the European markets.

Potential return on property investments

Ultimately, their investment in Spain´s commercial property market creates jobs and is good for the economy. This in turn can stimulate domestic demand, driving up prices in the longer-term. Planned changes to residency laws for property buyers are expected to drive greater interest from South America, as well as from China, Russia and India. Increased competition is seen fuelling upward pressure on prices.

If you are interested in exploring these investment opportunities, contact us!

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