Although hundreds of Spanish families are still being evicted every day for defaulting on their mortgages, foreign buyers have returned in force to the country's depressed property market.
New data from the Bank of Spain last week showed that foreign purchases in 2013 exceeded €6bn (£5bn) for the first time since 2004.
According to Knight Frank's Global Property Search, online searches for properties in Spain increased by 29% over the first three months of 2014 compared with the same period in 2013. More than a fifth of all Spanish residential sales – 55,187 transactions – were to foreign buyers.
"Foreigners are the only dynamic segment of the market today," says Mark Stucklin of Spanish Property Insight. "These are people buying on the coast and in cities like Barcelona." And it is not just private buyers, he says: institutional investors are also in the market. "The likes of Goldman Sachs, JP Morgan, Blackstone, George Soros and Bill Gates are all getting into Spanish real estate."
Some institutional investors are buying in bulk from Sareb, the so-called "bad bank" that has acquired thousands of unsold properties from failed Spanish banks and building societies.
The bank controls about 200,000 property assets – homes and developments – and it is selling houses at a rate of 60 a day. Sareb is now implementing a new strategy for marketing and selling the €50bn in real estate under its control, which could create yet further opportunities for international investors, says Stucklin.
According to Kate Everett-Allen of the international residential research department at Knight Frank, a surge in sales of both residential and commercial property began at the end of last summer, especially in Madrid and Barcelona, and included buyers from the US and Latin America. The French have also become big buyers around Barcelona.
A report by Spain's society of property registrars says Britons are still buying more property than buyers from any other country; they account for 15% of all sales to overseas investors, but that is down from 34% in 2007. French (10%), Russians (9%) and Belgians (7%) are next biggest.
For would-be British buyers, there are two key factors that are enticing renewed interest. The first is a belief that the worst of the eurozone crisis has now passed and that house prices, which have plunged 50% in some areas, are not going to fall much further.
"People who want to make a lifestyle choice with a second home see that, if prices haven't bottomed out after seven consecutive years of falling, they are close to it," says Everett-Allen.
The second factor is exchange rates. The euro-pound rate, which last July stood at €1.05 but is currently €1.21, is key: "When the euro reaches €1.22 the phones start ringing," she says.
For other, non-EU, nationalities, the Spanish government's so-called "golden visa" is also likely to spur demand. As yet there are no figures showing the impact of the visa deal, which offers legal residency to non-EU citizens who purchase a property valued at €500,000 or more. But estate agent Savills says a similar scheme in Portugal has succeeded in attracting Chinese buyers.
According to Spanish estate specialists Lucas Fox International Properties, Barcelona is among the current property hotspots for overseas investors, with growing demand for upmarket homes. More than four in 10 purchases there are as a second home, with many buyers planning to convert the properties into hotels or holiday flats. The agency says there has been a surge in interest from Russian, Chinese and Israeli buyers. Other agents report new interest from Scandinavians, as well as clients from the Middle East and parts of Africa.
It is at the very top end of the market, where the wealthiest overseas investors hunt for a place in the sun, that business is most brisk. The upmarket estate agent Engel & Völkers Spain said in a recent report that the firm's Mallorca offshoot had "sold more properties at the top end than in any other year of our 12 years of operations in this area".
Knight Frank classes "premium" clients as those able to pay at least €500,000 for a property. But the majority of Everett-Allen's clients, she says, are buying houses at two to three times that amount.
In the glamour areas of Ibiza, and Marbella and Sotogrande on the Costa del Sol, there are even the first signs of a shortage of available property, according to Stucklin.
"Most of the property on the coast will sell at the right price. Coastal developments will always be attractive.
"What will be harder to sell are the developments that have grown up around provincial towns in the interior. Unless the population increases, who will buy them?"
Story courtesy of the Guardian.