Unlike its football team, Spanish property has had a less than positive press recently. Reports of sliding prices and isolated cases of 'land-grab' have begun to ring warning bells with Brits – and a radical new law just introduced by the Spanish government is unlikely to help matters.

Under new legislation, half a million British expatriates living on Spain's Costa Blanca are set to lose their right to free healthcare. Authorities have said that the Costa's retired European residents are placing an impossible burden on  Spain's healthcare services. Until now, free healthcare has been offered to all expats working and living on the Costa Blanca in order to encourage investment in the area's property market – but with Spanish property prices collapsing, the Valencia government has judged that this is no longer a lucrative arrangement. 

Spanish property prices have also been hit hard by the credit crunch, as second home owners are forced to see their Costa properties.

However, according to Mark Bingham of Owner Invest, there is a silver lining to the black cloud of Spain's property market problems. "Spain has been dragged into the fray as a result of recent bad press about isolated cases of land grab and has undoubtedly been hit hard by the lack of UK buyers at a time when many are curbing their spending," he says. "Spain, unlike the UK and USA, has a silver lining, though, as many Spanish nationals have not spent excessively. Therefore experts predict that the property market will recover quickly and the levelling off of the currently high Euro will be instrumental."

He continues: "One must also consider the rental market. Differing from the UK, rental is a popular way of living in Spain and as such there is still a huge demand - a demand which is likely to grow in the short term and one which will keep the Spanish property market buoyant. However, Spain does have one thing in common with the UK, it is a 'buyers' market and currently there are bargains to be had. Those investing now in a flat market are assured of lower entry costs, coupled with the burgeoning rental market. These two factors plus analyst predictions that the Spanish property slump is temporary make this an exciting market to be investing in."

Key to making a successful Spanish property investment in this difficult time is finding the right developer – many are prepared to offer excellent deals to buyers. Andrew Benitz, Director of Titan Properties, says that the weakening of the Spanish property market has required a strategic rethink from the developer.

"Martinsa-Fadesa is in a stronger position than many of its compatriots since its creditors have recently shown considerable faith and refinanced its debt holdings favourably," he says. "The loan involving 45 Spanish and international banks promises interest-only repayments for three years and Martinsa-Fadesa's cashflow now has renewed strength. Other developers with liquidity problems have not thus-far been so fortunate and are becoming strangled by falling cash flow, rising costs and no access to new credit. The good news for buyers of Martinsa-Fadesa product is two-fold, their money is safe thanks to the company's financial backing and secondly the buyer is in the driving seat and entitled to various perks."

Martinsa-Fadesa is currently offering apartments in Costa Esuri, a golf development alongside the River Guadiana. Prices have been lowered to 160,000 euros for a fully-furnished two-bedroom apartment close to Huelva Airport.

Polaris World is another developer who has managed to keep afloat in the face of the credit crisis. Their prices start at 119,800 euros for a one-bedroom golf apartment in the Mar Menor region of Murcia.

Search for property overseas

Read the latest Spanish Property Bulletin FREE

For more information visit:
www.titan-properties.com
www.polarisworld.com

Spain v Russia
Euro 2008 semi final
At Ernst Happel Stadion, Vienna
Kick off: 19.45

Article first published 26 June 2008