ENGEL & VÖLKERS 2007/2008 SPANISH PROPERTY MARKET REPORT

Barcelona, March 7th, 2008.

This report was prepared by Engel & Völkers, the international estate agents with over 300 offices worldwide, based on the findings of 60 of its offices throughout Mainland Spain, the Canaries and the Balearics.  It is reproduced here with permission. More on Englel & Völkers

MARKET REPORT INDEX
+ Executive Summary
COSTA DEL SOL
+ Calahonda & Mijas
+ Estepona
+ Marbella - East
+ Marbella - Golden Mile
+ Marbella - West & Puerto Banus
+ Sotogrande
BALEARICS
+ Ibiza
+ Mallorca - Alcudia
+ Mallorca - Inland & Country
+ Mallorca - Llucmajor
+ Mallorca - North East
+ Palma de Mallorca
+ Mallorca - Pollensa
+ Mallorca - South East
+ Mallorca - South West
+ Mallorca - West
+ Menorca
CANARIES
+ Las Palmas de Gran Canaria
+ Gran Canaria - Playa del Ingles
+ Lanzarote
CATALONIA
+ Costa Brava - Alt Emporda
+ Costa Brava - Baix Emporda
+ Costa Dorada - Cambrils
+ Costa Dorada - Salou
VALENCIAN REGION
+ Costa Blanca - Altea
+ Costa Blanca - Moraira
+ Costa Blanca - Torrevieja

Executive Summary

2007 represented a good year for Engel & Völkers and the company billed a total of €19 million on commissions earned in Spain, which was 30% up on 2006.  Undoubtedly, 2008 will be a challenging year for the Spanish residential market. However, Engel & Völkers is still confident it can make good returns this year and is already committed to opening 20 new offices over the next 12 months with an overall strategy of 300 offices in eight years.

The main points covered in this report are:

Cities

Madrid and Barcelona markets have slowed down but remain stable with good prospects for 2008/9.  The company’s confidence in these areas is underpinned by the fact that six more offices will open in these cities this year.

For the first time Malaga is included in the city section as the “capital” of the Costa del Sol.  Important infrastructure developments and new investment indicate future potential. Future city openings for 2008 include Tarragona and Gerona.

Spanish Coastline

The second home residential market has slowed down in many areas, particularly at the mid to lower end where there remains a surplus of property.   Although, the market is still moving property in general is taking longer to sell and vendors have to be realistic about pricing in what has become a buyers market.

The Balearics

Generally the market is holding well particularly at the top end where luxury, front line property and remains at a premium.  However, the lower to mid range priced property market (around €500,000) shows indicators of slowing down. 

The Canaries

This is possibly the region with the greatest potential over the next couple of years. Easy accessibility, guaranteed winter sun destination, plenty of coastline property and unique countryside provide instant appeal to Europeans from colder climates.  Four new offices planned for opening this year.

Trends

For quality property in good locations, the average spend has increased to €1 million.

There is a distinct move away from the traditional “Spanish” villa style to modern contemporary design.

For luxury properties, separate guest and staff accommodation, wine cellar and gymnasium have now become standard features.

Incoming foreign buyers are becoming younger.  An increase in big spenders under 40’s, making a move to Spain with their young families is now a definite trend.

Where’s the market going ?  Spain’s residential market still holds potential, particularly for well appointed luxury property.  Its’ strategic position in Europe for easy access, excellent climate, sophisticated infrastructure, world class sports facilities will still be there when the market has adjusted to the current economic climate.  Buyers must do their research to get the best value and vendors must be realistic about pricing.

Engel & Völkers Corporate Background

• + 300 offices in 27 countries on 5 continents (60 offices in Spain)
• more than 2,600 employees and independent collaborators
• more than 350,000 registered clients
• more than 87,000 properties for sale
• €160.7 million generated in 2007 in commissions worldwide – representing an increase of 30% over 2006.

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