According to the Association of International Property Professionals, known as AIPP, the number of overseas transactions out of the UK was up 21% in 2007, to a record 240,000. Many of the largest areas of investment are favourites (including France, Italy and Portugal) – but still top of the list is Spain.
The country was named the No 1 preferred investment location in 2007 by investors from the UK who purchased foreign property.
Still, many are looking at the reality of investments here. Some Spanish property developers who have done very well over the last few years are now facing a very large problem when realistic pricing sets in. The country is seeing a number of changes happen, including the economy slow down and the fact that lenders are now requiring more criteria to be met before they will lend.
Many feel that once these property firms get into monetary trouble because of the falling prices, then the true value of the real estate will be exposed – which could cause a number of problems for all property owners.
Some investors and economists predict that a similar crisis to that of the subprime lending troubles in the United States could be seen in Spanish property. Yet, it is unlike that it would be as transparent to the public.
