Is it time to join those buyers flocking back to Spain?

Recent official figures released by Spain’s General Council of Notaries show that house purchases by foreign investors have risen to almost pre-crisis levels nationwide. So the question is: has the time come for you to join them and buy in Spain?

The recent figures show that non-resident foreigners accounted for 28.4 per cent of all holiday property sales in Spain in 2012 – a total of 38,312 buyers, of which some individuals will have bought more than one home, so the number of actual transactions is likely to be even higher…

As non-residents, these property sales are classed as holiday homes, even though a fair proportion of those in the market will look to spend as much of their time in Spain as possible.

In 2007, a year that is routinely considered to have been the apex of the property boom, there were 41,787 house sales to non-residents; 2012 ran it very close. But while 2007’s bloated market inevitably burst, 2012 signals a more mature trend characterised by cooling house prices, better town planning and more transparency in the market.

In today’s more straitened times, there is less emphasis on high density, identikit developments built for the sake of building. Developments are only being given the green light if they have a unique selling point – an eco golf course or low-density luxury for example – and the majority of buyers are either self-financed (they have the cash) or are dealing directly with the banks who now possess staggering portfolios of previously toxic assets.

We are faced with a new reality of buying property in Spain. The Costa del Sol, for example, no longer dominates quite like it used to. Areas like Valencia and Catalonia are attracting foreign buyers, and those foreign buyers are no longer just northern Europeans – they are increasingly Russian and Chinese; two markets used to a completely different set of financing options, property preference and lifestyle choices.

The volatility of both the euro and sterling means that the ‘right time to buy’ is a perpetually moving target, and the steady price corrections in many areas mean that speculative investors have been scared off; people are now buying in Spain for personal reasons rather than profit. And it pays to take a longer-term view. The pre-boom situation was one of soaring profits for some and rule bending for many. But it was unsustainable. And while a handful got rich quick, a majority had their fingers burnt and lost a lot.

Today’s market is a much more sober place thanks to the last five years of corrections, new regulations and realisations, and a dousing of the metaphorical fires that drove some investors and lenders to act irresponsibly. The result today is a near return, in figures at least, to those heady days but with a few key differences that are making Spain’s property market fairer for all.

In short, 2013 looks like it will come to be known as the year when Spain’s property market righted itself once more. So what are you waiting for?