Foreign investment in real estate in Spain totaled 4.84 billion euros at the end of 2006. This represents a 12% drop compared to the previous year and confirms a downward trend that began in 2005. There is a general consensus that the high prices of housing in Spain, with a special emphasis on the areas preferred by foreign buyers – the coasts – together with the slow but progressive rise in interest rates, are the two factors that have been identified as the main culprits of this decline in the volume of investment. The latest wave of urban planning scandals in some traditional tourist destinations and the protests of foreign owners over the Valencian Urban Planning Law have not exactly helped to reverse this trend either.

Read more