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Is Spain’s relative attractiveness on the up?

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When you look around the world today, it’s hard not to feel a bit depressed about the turn of events in recent years, with a global pandemic, war in Europe, high inflation, exploding global debt, Western insecurity and neurosis, and hostile regimes flexing their muscles, to name just some of the threats to global peace and prosperity this Easter Sunday. My mate argues that the Spanish housing market could be benefits from this depressing global backdrop.

Back in 2018, Spain looked like a relatively unattractive investment proposition with its high unemployment and political instability, though quality of life considerations have always weighed in its favour. But, as the rest of the world looks more messy, does Spain look increasingly attractive in comparison? That’s what a friend of mine in the property business argues, and says it will lead to growing international demand for property for sale in Spain.

Spain has problems like everywhere, but as the problems elsewhere get more serious, Spain’s problems don’t look so bad, and quality of life considerations get more weight. Quality of life factors like a good climate, diet and culture have always been strong selling points for Spain. Now that everywhere else in Europe has high inflation, energy insecurity, and exploding public debt, Spain’s economic problems don’t look quite so bad.

Actually, when it comes to energy security, Spain looks better off than most. Whilst Germany is dependent on Russia for 40% of its energy, Spain has a gas pipeline across the Mediterranean to Algeria, the biggest facilities in Europe for importing LNG from the Middle East and the US, and some of the best potential for renewable energy sources in Europe. Spain is one of the few countries in Europe that does not depend on Putin for gas.

At the same time, the Spanish Mediterranean climate is one of the mildest in Europe, meaning low heating bills for many. Of course that hasn’t stopped energy prices in Spain exploding in the last few months. Gas and oil are fungible commodities, after all.

The war in Ukraine has also made Spain look relatively safe. Rather like the UK, which is protected by the Channel, Spain (and Portugal) are protected by the Pyrenees mountains. If armies ever come marching into Europe from the East, the Iberian peninsula is the best protected place in mainland Europe, and about as far away from Putin as you can get.

Spain has its political problems, but so does the UK, France, Italy, the US, and almost everywhere else. Spain does not stand out for political problems right now.

So, when foreigners look at Europe for a country to invest in, Spain looks relatively more attractive, even if it is no better than it was.

spanish quality of life
Spain has always offered an attractive quality of life

Take the US as an example. With the ‘Great Satan’ on the edge of a nervous breakdown, what are your options as an American in Europe? Northern Europe isn’t looking as together as it used to be, and the climate isn’t as good as the South. But in southern Europe France looks fractious, and Italy seems perennially dysfunctional. Portugal and Spain stand out for stability and quality of life, and Spain simply has more to offer than Portugal, my mate argues.

This might explain why a growing number of US citizens are buying property in Spain, many of them taking advantage of Spain’s Golden Visa scheme. In the last quarter of 2021 American’s bought 178 homes in Spain, the biggest number on record. The US is a small but growing market. And non-European foreigners bought 18,156 homes in Q4, also a record, suggesting that the rest of the world sees Spain as a good place to invest.

If my friend is right, the messy global backdrop is a tailwind for Spanish property sales. I’m not so sure, but I certainly wouldn’t rule it out.

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