2008 - Not the year for Spain

The property market in Spain is 'dead' and unlikely to improve in 2008, according to two experts.

International lawyer Oscar Ricor said that because the Spanish economy is so dependent on the construction industry he cannot advise investors to consider buying at present.

About 20% of Spain's economy is dependent on construction compared with 8% on other European countries and developers and building companies have been cutting jobs and closing in unprecedented numbers. Unemployment has risen to 8.3% and manufacturing is the weakest it has been for years, according to Ricor.

'I would be extremely cautious about investing in Spain right now because the Spanish economy is worsening rapidly,' he said.

Spanish Property consultant, head of SpanishPropertyInsight.com said a hefty correction is needed before Spain's property market can truly begin to heal. 'Spain's economy has become too dependent on construction and now that's going to have to adjust. I can see it coming down to the EU average, which means knocking 10 percent off of Spain's GDP,' he said.

'The market is dead as far as purchasing goes but investors with property along the coasts may be able to find enough holiday renters to get them through these hard times. But overall I don't seem anywhere in Spain offering good value yet from a financial returns point of view. I would say you can quite easily sit out 2008 and not miss any great opportunity,' he added.

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