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Ex-UK Residents Setting Up Home in Spain

September 11th, 2007

This post came about due to a question raised by a reader of the House Buying Blog with regards to language barriers that English speakers may encounter when living in Spain. There are bound to be some problems if you don’t speak the language, but this needn’t be so much of a problem if you are among your own nationality. The following table lists recent figures denoting the number of UK ex-pats living in the different Spanish regions.

REGION UK RESIDENTS
Andalucia & Costa del Sol 34,949
Balearic Islands 10,998
Canary Islands 14,925
Costa Blanca 29,225
Costa Brava 8,478
Costa Calida 4,484
Costa del Almeria 4,491
Costa del Azahar 3,482
Costa de la Luz 3,688
Costa Dorada 1,300
Extremadura 152
Madrid 6,782

Aragon and Navarra Spanish Property Guide

August 29th, 2007

In terms of areas for investment in the Aragon and Navarra regions there are two clear cities that require your attention as potentially excellent investment opportunities – Pamplona and Zaragoza. If one takes the region as a whole, property is at a consistently lower price than much of Spain as the area has yet to be discovered by overseas property investors and most of the property is inhabited by Spanish nationals. Indeed, if you were to venture further south to the Teruel area you would find prices there to be half the Spanish national average. However, the safest areas for property investment in the Aragon and Navarra region should be considered Pamplona and Zaragoza.

Pamplona Property Investment

Pamplona, the capital of Navarra, is a compact city with narrow winding streets, which are steeped in history and strong academic ties (the city houses three universities). The city is most well known for the Fiesta de San Fermin, which attracts a worldwide audience on the 6th July. When the running of the bulls takes place there is a massive tourist influx, which can certainly help with short term rental opportunities and for longer term rentals, there is a burgeoning student population.

Property pricing has increased dramatically in Pamplona, which is not to be surprised based upon the many merits of the city such as the spectacular scenery, historic buildings, and excellent educational and conferencing facilities. Although house pricing has increased in recent years it is still recommended as a property hotspot in the Navarra region and could provide strong yields. You could expect to pay the following for average properties Pamplona -

€195,000 for a 1 bedroom property
€255,000 for a 2 bedroom property
€315,000 for a 3 bedroom property
€430,000 for a 4 bedroom property

If you sought to rent your property in Pamplona you should be looking at the following returns per week -

€290for a 1 bedroom property
€350 for a 2 bedroom property
€540 for a 3 bedroom property
€780 for a 4 bedroom property

Although if you are renting your property as part of a short term let during the Fiesta de San Fermin it is expected that you can double your standard pricing as there is huge demand from the visiting tourists.

Zaragoza Property Investment

Zaragoza is situated in the Aragon area of Spain and is the regional capital. Similarly to Pamplona the city can offer beautiful scenery with stunning views of the Pyrenees. The Romans in 14BC founded the historic city originally and there are currently approximately 700,000 inhabitants with many more commuting to the city for work.

The city is ideally situated on the main transport backbone between Madrid and Barcelona, which has helped to drive property pricing up. A factor that should be noted is that Zaragoza is not currently a major tourist destination; however, the inhabitants of some northern European nations are starting to adopt the city as a tourist venue, which could be a catalyst to propel property pricing to greater heights. The city is growing at a quick pace and there is a cosmopolitan feel to the centre of the city. On the negative side, due to the expansion there can be traffic congestion problems at peak times in the city.

The city centre boasts a number of new housing which can be expensive (certainly when looking at the region as a whole), however, if you are prepared to move slightly outside the city centre you can certainly obtain better value for money. If you were looking to buy property in Zaragoza you could expect to pay the following prices -

€165,000 for a 1 bedroom property
€250,000 for a 2 bedroom property
€400,000 for a 3 bedroom property
€600,000 for a 4 bedroom property

If you sought to rent your property in Zaragoza you could be looking at the following returns per week -

€450 for a 2 bedroom property
€660 for a 3 bedroom property
€850 for a 4 bedroom property

Aragon and Navarra Profile

August 28th, 2007

Aragon and Navarra are located in the north east of Spain and neighbour the Pyrenees mountain range. Navarra is a Basque region and the capital Pamplona is known worldwide for Los Sanfermines festival, which takes place every June. For the uninitiated, individuals attend the festival from around the world to “run with the bulls” down the cities narrow streets.

To the eastern side of Nararra is Aragon, which stretches for much of the country from the Pyrenees Mountains in the north to the small town of Teruel in the south. Aragon is one of Spain’s most geographically interesting regions and the Ordesa National Park in the north is a very popular area for visitors wanting to experience the splendour of the Pyrenees with its gorges, waterfalls and above all else spectacular walks. A great deal of the area is only accessible during the summer months when the snow has melted sufficiently to allow access. Towards the south of Aragon is the regions capital city, Zaragoza. The city is currently the fifth largest in Spain and there are over 700,000 inhabitants.

Aragon and Navarra are easily accessible and are served well by airports such as Zaragoza, Reus and Barcelona (which is just over a 2 hours from the region).

The economy in Navarra is primarily driven by agriculture, although Pamplona is becoming a cosmopolitan city with well regarded convention facilities and very good universities. In the Aragon region, Zaragoza is the main economic centre and it is estimated that over 1 million workers migrate into the city on a daily basis.

First Things To Do When You Have Moved To Spain

July 20th, 2007

It can be a daunting prospect to move to an entirely new country to set up home. However, the key to any successful move whether domestic or international is to prepare thoroughly and have plans laid for when you actually arrive. Our previous post touched upon what you should prepare prior to your move, this post will provide you with a checklist of things you should consider doing once you arrive in Spain.

  • Primarily you should go to your local police station in Spain or comisaria and request your NIE (numero de identificacion de extranjeros) number. All residents and visitors need an NIE number if they intend to pay taxes, set up utility bills, buy and sell property and pay Spanish council tax. Without the NIE number none of these are legally possible. You should allow up to 6 weeks for the application to be processed.
  • Individuals that are retired from work should apply for a residence card. An application form can be downloaded from http://www.mir.es In order to obtain the card you will need to take the completed application form to the comisaria along with your NIE number, passport, marriage certificate (if applicable) proof of address details, medical certificates, health insurance details and 4-5 passport sized photographs of yourself.
  • If you are from the UK and are of pensionable age, if you contact the UK Pensions Service and inform them of your new Spanish address, they will still be able to send you a UK state pension.
  • If you are to be self-employed in Spain you will need to register with the INSS (Instituto Nacional de la Seguridad Social) so that you can arrange for social security tax payments to pay for your healthcare requirements.
  • You could chose to take out private healthcare insurance.
  • Once you have your NIE number get a telephone line installed at your property by contacting the local Telefonica office, obtain a water rates contract at your local town hall and contact the electricity supplier and arrange for electricity to be supplied to the property or if it is already in place, arrange for the contract to be changed from the old owner into your name.
  • Create a new will that takes into account your new Spanish assets. This should be draw up with a Spanish solicitor so that any vagaries in Spanish inheritance law are addressed from the outset.

The Current Spanish Property Market By Region

July 18th, 2007

Even though Spain has been a stronghold for property investors over the last several years, there has been a definite slow down in market prices. Several reasons can be attributed to the recent slow down such as increased competition from countries such as Morocco and Bulgaria that are potentially able to offer a greater yield in a shorter time, and a wave of bad publicity that has damaged the Spanish real estate market as a whole. This should not deter you as the Spanish property market could now be considered as a buyers market as panicked investors are attempting to sell at the first sign of a slow down in price increases.

Although there has been a demonstrable slow down in Spanish property price increases, this should be put into context. Spanish property inflation in 2003 was at nearly 19%, in 2004 it was at 17% and in 2005 it was 13%. Against these high figures, a normalisation of property inflation can initially look catastrophic, however, this is not necessarily the case and Spanish government figures show a 9% increase from 2005-2006, so there appears to be a soft slowdown.

Due to the varied nature of Spain both culturally and geographically, each province can be seen as autonomous in its own right when property prices are calculated, with the highly priced resorts in the Costa’s compared to the lower costs of the more traditional northern regions. This obviously translates to varied gains per region.

Prices for average regional property prices in Spain are provided courtesy of Spanish Property Insight at www.spanishpropertyinsight.com

REGION PERCENTAGE INCREASE THOUGHOUT 2006
Andalucia 9.7%
Aragon 12.9%
Asturias 8.6%
Balearic Islands 11.8
Canary Islands 8.0%
Cantabria 12.3%
Castilla y Leon 9.9%
Castilla La Mancha 9.6%
Cataluna 10.7%
Comunidad Valenciana 7.2%
Extremadura 8.4%
Galicia 12.9%
Madrid 6.1%
Region de Murcia 7.5%
Comunidad Foral de Navarra 6.4%
Pais Vasco 9.2%
La Rioja 9.8%
Spain overall 9.1%

As the figures show above, there is a large variance of increases based on region. At the lowest end Madrid at 6.1% up to Aragon and Galicia growing at 12.9%.

Property professionals have found a tightening of the market, although high end properties are still fetching a premium, therefore, it is imperative that as much research is conducted as possible. There are property owners that will have bought their Spanish properties at the height of the property boom in 2003-2004 that will likely have to sell at a level significantly below expectations and this is where you may be able to grab a bargain by making reasonable offers. Moreover, figures show that there were 800,000 housing starts in Spain in 2006, which works out as the same in the UK, Germany and France combined. This being the case, there will likely be a significant imbalance in the market which could lead to nervous developers offering property at heavily discounted rates.

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