Better Spanish borrowing costs a boon for the property market

2013 has so far brought welcome good news to Spain

The Spanish government’s tentative reforms of its economy have enjoyed moderate and positive success so far in 2013, with latest figures showing that the country’s borrowing costs have fallen for the first time in almost a year.

Last week, the government’s €71 billion funding programme took Spain’s borrowing costs below five per cent for the first time since last March – a move that not only earns the country valuable breathing space on the markets, but also injects a dose of confidence into the economy as a whole.

So what does this mean for the people of Spain, many beleaguered by unemployment and stagnant wages? In the short term, they are likely to feel little positive effect, but it’s great news for prime minister Mariano Rajoy, giving him and his party the confidence they need to continue with their reforms.

Rajoy is reluctant to request further financial aid from the EU, and this latest positive vote of confidence in Spain’s economy bodes well for the country’s recovery. Such an economic easing is good news for the property industry, too, which will thrive on the stability that such good news headlines bring.

More good news recently came Spain’s way too when official figures showed that the number of tourists visiting the country in 2012 rose by one million. Last year, a total of 58 million people visited Spain – three per cent higher than the 57 million who visited in 2011.

With tourism accounting for 11 per cent of Spain’s GDP, this was welcome news indeed.