Spain's property market sustained by immigrants - and divorcees
Spain's domestic property market is being buoyed by a number of factors - from a rising number of immigrants to an increase in single households.
The Financial Times highlights a report from Angel Berges, a partner at Analistas Financieros Internacionales - a Madrid consultancy - who estimates that immigrants will buy some 170,000 homes in Spain this year (almost one quarter of total demand for new houses). "There is no risk of a property crash in Spain in the short or medium term thanks to new demand generated by immigrants," Berges told the FT.
Since 2000, Spain's immigrant community has quadrupled to more than 4 million - or 9% of the total population - and an amnesty last year resulted in almost 700,000 illegal migrants being awarded job permits and residence papers. However, with only 16% of immigrants owning property (according to estate agent Fincas Corral) there is enormous potential for further sales. This fact alone has compelled some analysts to forecast economic growth at 3.1% for 2006 and 3.2% in 2007.
Berges also drew attention to Spain's rising divorce rate, with more than one in five marriages now ending in separation or divorce. This has been intensified, in part, by a new fast-track divorce law introduced by the Socialist government - with an 80% increase in divorces to 87,000 last year. This, in turn, is generating demand for about 140,000 new homes a year, according to estate agents, and the FT quotes Fernando Encinar of Idealista.com - a Spanish real estate portal - who said: "Property developers are now actively targeting divorcees by building more studios and one-bedroom flats."
Source OPP May 06