In a recent report called ‘Regaining the Confidence of Foreign Buyers’ (dated March 2008), Alicante’s association of developers (Provia) has gone on the counterattack in the face of international criticism of the region’s building practices, and a slump in demand from foreign buyers. Last week the association also called on the Valencian Government to do something about the sector’s bad press in the UK.
The report, written by consultants from Global Europe, argues that Alicante is one of the best places in the world to invest in property.
“According to all international organisations, Spain is a safe place to invest and save money, with a stable legal framework and an efficient judicial system,” says the report. “The excellent level of infrastructures, an efficient banking system, as well as a modern health and social services system, place Spain in general, and the province of Alicante in particular, well ahead of other “fashionable” destinations in the Mediterranean and the South of Europe.”
They are also at pains to point out how much Alicante has going for it when it comes to quality of life.
“Buyers – Spanish or foreign – who invest in the province of Alicante enjoy an exceptional natural environment, a healthy climate and an extraordinary cultural, gastronomic and sports offer,” says the report.
Turning to the property market, the report claims that property in Alicante represents a secure investment in quality. Alicante is at the forefront of sustainable construction, the report would have us believe.
With accusations of over-development in mind, the report tries to show that Alicante is one of the least built up regions in Europe. Figures are provided to show that 53% of the Valencian Region is virgin countryside, compared to an average of 37% for the EU. A ratio of built land to residents is used to show that Alicante, with 290m2 of built land per resident, compares favourably with countries like Belgium (590m2/resident), France (420m2/resident) and Germany (352m2/resident). The report ignores the fact that most of Alicante’s development is crammed into a thin strip on the coast.
“In brief, it must be highlighted that the real estate market in the Costa Blanca offers maximum guarantees to the informed buyer who looks for good returns and a quality product adapted to the new environmentally conscious times,” the developers conclude.
The English version of the report ends there, but the Spanish version goes on to fulminate against “conspiracy theories” in the foreign press, and “an orchestrated campaign by certain interest groups” to tarnish the region’s reputation as a destination for property buyers. They hint that property professionals of “dubious character”, selling competitive destinations in the Mediterranean and Southern Europe, are using scare stories to smear Alicante’s reputation.
The Valencian Region, of which Alicante is a province, has drawn heavy criticism from the European Parliament and the British press, amongst others, for so called ‘land grab’ laws that allow unscrupulous developers, in cahoots with local politicians, to present planning schemes that expropriate land from private owners, in some cases forcing owners to contribute hundreds of thousands of Euros to the urbanisation costs.
Many have also criticised the mindless over-development of many parts of Alicante and the Costa Blanca, in which greed and speculation appear to have played a bigger role than the provision of housing.
In a section entitled “Clarifications for the ill-informed”, the report tries to show that all such criticisms are unfounded.
On the ‘land grab’ question, the developers point out that all rural land can be reclassified as urbanisable if it serves the public interest. They argue that all expropriations are fairly compensated, which many would dispute, and that the authorities never reclassify land to make money (once again a moot point).
But most importantly, they argue that land reclassifications (and therefore the ‘land grab’ schemes that sometimes go with them) are purely the result of “an extraordinary demand for residential property from both Spaniards and foreigners.”
If there is any problem, and anyone is to blame, it is the selfish foreign property owners hoarding rural land bought on the cheap. These owners, by resisting planning schemes on their land, are thwarting the “aspirations of thousands of people from all over the world who want to live and work in Alicante.”
The report also assures us that the Spanish justice system is effective, and that nobody is above the law. That, of course, is of little comfort to owners if the law itself is part of the problem. “Talking of a conspiracy against foreigners, as some in the international media do, is nonsense,” says the report.
The report concludes by stating what a grand job the developers of Alicante have done in building housing for the hundreds of thousands of people who live in or visit the province, whilst stressing that they operate in a well regulated sector. We don’t make the laws, we just follow them, so don’t blame us, they seem to be saying.
“Some unfounded opinions in the national and foreign media have caused serious alarm by suggesting that developers are shady characters who build for their own selfish interests without reference to the requirements of society,” they complain. “These reports, encouraged by certain interest groups running an orchestrated campaign, have created a public opinion that is far from reality, the worst example of which can be found in the resolution of the European Parliament of 21 June 2007.”
Appeals for the Valencian Government for Intervene
Last week it emerged that Alicante’s association of developers has appealed to the Valencian Government to do something about the bad international press that the Valencian Region’s builders attract, especially in the UK. In a report sent to Angelica Such, the regional minister for tourism, Provia urged the Government to stop the European press criticising the Costa Blanca’s real estate sector, for which they blame the collapse in sales of holiday homes. It has also been reported that the developers have hired a PR company in the UK to help fight the bad press.
Local developers have been furious for some time about what they see as unfair press coverage in the UK, but what triggered this call for government intervention was the discovery of a link at the British Foreign & Commonwealth website to Abusos Urbanisticos No (AUN) website.
What the FCO website says is this:
“In the Valencia Autonomous Community (the Provinces of Castellon, Valencia and Alicante) and, increasingly, in other parts of Spain your land tenure rights can be severely curtailed by local legislation. Should your ownership of property in these Provinces be threatened by local legislation you should engage the services of a lawyer immediately. Also, you should contact the NGO, Abusos Urbanisticos No for more information and details on how they may be able to help. Please note that the British Consular Services cannot help specific property cases.”
According to Charles Svoboda, a retired Canadian diplomat, and the organisation’s founder, AUN is a “collective advocate for the rights of small property owners and the protection of the environment”. Local developers, on the other hand, see it is a lobby for foreign residents waging an international campaign against the Valencian real estate industry.
Why foreign residents would want to wage such a “campaign” is a mystery. “AUN is not conducting any sort of “campaign” against the real estate sector,” explains Svoboda. “If the sector has a bad reputation , it has done its worst all by itself to earn it. And if they call us a lobby group, just who is it we lobby? All we have done is take quite legitimate complaints to the Petitions Committee of the European Parliament, and inform the press of what is happening here.”
The Valencian government recently announced that it plans to overhaul the region’s planning laws (for the third time), but this doesn’t mean that the ‘land grab’ problem will go away.
The government, and the developer’s lobby, do not appear to understand, or perhaps they do not wish to see, why the rest of the world finds the ‘land grab’ laws so unjust. Until that changes, no amount of tinkering with the laws will solve the problem.
And by the same token, here is a list of other things that will not help restore the Valencian Region’s reputation as a destination for foreign home buyers: self-serving reports, complaints by the regional government, PR agencies in the UK, playing the victim, and trying to pin the blame on others.