Is this the ‘Spanish Spring’ moment for Spain’s property market?

As leading investors plough money into Spanish property, will others follow?

Fashion trends and revolutions may be poles apart in what they actually mean for the individuals involved (ridicule and/or cult status for one, freedom and/or further oppression for the other), but they both have one common ground: people power.

It is people who topple governments and slowly turn the tide of history. It is people who stand up to persecution and overthrow despots. It is people who power the ‘no make-up selfie’ craze and raise millions for cancer charities. And it is people who decide whether skinny jeans and sandals will be ‘in’ this summer.

So when respected economists and analysts begin talking about a ‘Spanish Spring’ for the country’s property market, they are not looking at some faceless spreadsheet or stock market graph, but the actual real decisions that actual real people are making…

Recent reports that billionaires George Soros and John Paulson have invested huge sums of money into the Spanish property market were initially handled very carefully. Here were two famously cautious, thoughtful and conscientious investors throwing money into an industry that many left for dead a few years back. Experts – careful not to enquire whether either tycoon had taken leave of their faculties – mildly questioned these decisions, particularly that of Paulson, who actually foresaw the 2007-2008 US subprime crisis and made millions in betting against it.

But, after having each poured $127 million into Hispania – a new real estate investment trust based in Madrid – critics have revised their opinions on their joint decision to bet on Spanish property. Soros’ and Paulson’s investment came just weeks before a flood of reports remarking on how well the country’s economy had patched itself up after years of floundering. This new, shiny, confident Spain has confounded a number of critics, and looks set to enjoy a wholly positive 2014 across its export, industry and property sectors.

Although property prices in Spain remain some 30% below their peak values of five years ago, momentum for investing in Spain has increased. Global estate agents Savills last week reported that foreign injections of capital into Spanish real estate increased three-fold in 2013, reaching €850 million in total (up from just €320 in 2012).

The decision of Soros and Paulson to back Spain was not only carefully calculated on their part, but has also had the (no doubt predicted) effect of imbibing the sector with renewed confidence, encouraging others to turn again to Spain, creating an almost virtuous circle of investment.

“Some international investors have patiently been waiting for years for the right moment to move into the Spanish property market,” said Savills’ head of research for Spain, Gema de la Fuente. That moment, it seems, is now.

Evidence that a “Spanish Spring” is mounting in other areas came last week when British mobile phone giants Vodafone snapped up Spain’s largest broadband provider Ono, while credit ratings agency Moody’s upgraded Spain’s credit rating and Spanish government bonds enjoyed a ten-year low on the markets.

Despite continued warnings of shaky recovery and fraught fragility (warnings that are welcome because they ensure nobody gets carried away), the feel-good factor that so defined Spain’s economy a decade before is most definitely trickling back. And if the people start to believe it too, then who would seriously bet against it? After all, it isn’t usually a bad bet to side with somebody as smart and as savvy as Soros.