Spanish property overvalued, says study
The buy-to-let study compared prices and rents across four different cities: Madrid, Barcelona, Seville and Valencia. It found that the "vast majority of areas" offered poor rental returns to investors, because prices remained "disproportionately high".
"Property prices are still overvalued in our country," explains spokesperson Lleana Izverniceanu. Just 7 per cent of homes in the 300 neighbourhoods analysed were thought to offer rental return worth investing in, with 85 per cent of properties considered too expensive.
The report is targeted at careful investors, rather than speculative buyers in search of a speedy return. Indeed, values are not expected to rise significantly in the medium term, as they have done in previous market booms.
Despite the somewhat negative rating, though, Spanish property remains extremely popular among overseas buyers, thanks to a bottoming market and favourable exchange rates between the pound and the euro.
Indeed, sales of existing Spanish homes have rocketed by more than 50 per cent in the past 12 months, according to the National Institute of Statistics, with overall sales jumping 15 per cent year-on-year in February 2015.
Sales of new build homes, on the other hand, dropped 30 per cent year-on-year.
Spanish homebuilder Taylor Wimpey Espana says it has enjoyed a "bumper start" to 2015, with web traffic up 16 per cent and sales up in Mallorca, Costa Blanca and the Costa del Sol.
Why does the country remain so desirable? "Spain offers a unique combination to buyers looking for sun-kissed luxury," explains Marc Pritchard, Sales and Marketing Director.
"Its numerous blue flag beaches (Spain has 573 in total – more than any other country) are perfect for families, while those with older children or travelling as a couple delight in its championship quality golf courses. The clement weather means that outdoor activities are rarely 'rained off' as they are in colder climes and the combination of sun and water makes for some fantastic memories."