Buying property on Spain's islands
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Articles on Spain
Spain’s popularity with British buyers is such a long-established fact as to make discussion of it virtually pointless. It boasts a great climate and lifestyle within close and affordable proximity to the UK, some areas still offer value-for-money property and many parts of the country are very beautiful. What more need be said?
The Balearics and Canaries have everything that the mainland has to offer, but with the added allure that comes of being islands. Sounds simplistic, but there’s something about living on an island – especially a sunny one – that appeals to the romantic sensibilities of just about everyone. “There’s an aura of exclusivity attached to island living,” explains Rupert Fawcett of Knight Frank. “The fact that an island is such a specific area of land translates into a perception of uniqueness that the mainland doesn’t offer.”
Of the Balearics, probably the most popular with British property buyers is Mallorca, for the simple reason that it’s fantastically accessible, both in terms of flights, which operate directly to the island throughout the year, and in terms of flight time, which is only around two hours from the UK. It also has a large ex-pat population, and a good mix of modern and more traditional housing, with properties that range from small apartments to large country estates.
Knight Frank is marketing a three-bedroom villa just moments from the popular town of Puerto Andratx, which boasts a marina, waterfront cafes and bars. Priced at €5.5 million (£3.7 million) it features staff accommodation and a striking contemporary design. The area is also host to Las Milanas, an exclusive luxury development of 70 apartments and penthouses, with first phase prices ranging from €560,000 to €1.35 million (£378,000 to £912,000). Available through Pentagon Estates, the development features spectacular views from sunny terraces, as well as swimming pools and lush gardens.
Another new project, which is being marketed by Shortcuts Property Search, is the first minimalist-style development to be built in Mallorca, and will be completed by mid-2008. Comprising six blocks, with six apartments per block, the apartments have been designed using natural materials and with an open-plan layout to maximise the sea views. Located within moments of Puerto Andratx, prices for a two-bedroom apartment start at €852,000 (£575,000), and from €1.15 million (£777,000) for a three-bedroom.
If a more peaceful mountain setting than the bustling Puerto Andratx appeals, there’s a beautifully restored country residence on offer for €7.35 million (£4.96 million) through Knight Frank. With six bedrooms – four in the main residence and two in the guesthouse – and a pool, it’s set on 1.8 hectares and occupies an elevated setting with views over the valley. And as if these weren’t enough to make the patio areas enticing, they also boast a bread oven and barbecue.
“Areas on the west coast of the island, such as Soller and Deia are also popular and command very high prices,” says Fawcett. For €4.5 million (£3.04 million), you could buy a traditional-style home between the two areas, with four-to-five bedrooms and spectacular views over the coastline and valley. Set on 2.5 hectares, its external areas include a large terrace and swimming pool.
Ibiza attracts a very different crowd from Mallorca, according to Fawcett, and it’s not because of its long-held reputation as a destination for clubbers and partygoers. “It’s moved on from that perception of dance club culture,” he says. “In fact, the clubbers who went there a decade ago are now in established, affluent careers and, because the island still has a bohemian vibe, they’re the ones who are going to buy property in Ibiza: they want a location where they can go out a couple of times but still have a nice, relaxed holiday. It offers the best of isolated, unspoilt areas with those bigger, more vibrant scenes.”
With the golf course and marina just a short drive away, €3.5 million (£2.36 million) will buy you a four-bedroom villa located two kilometres from Ibiza town, Recently built but rustic in style, this luxury property offers magnificent views of the whole coastline and of the islands, with the lower part of the 0.1 hectare grounds spreading down the valley to the sea. Alternatively, you could buy a four-to-five bedroom finca for €2.4 million (£1.62 million): despite its rural setting, it’s only seven kilometres from Ibiza town and three kilometres from the airport, with the beaches of Cala Jondal and Sa Caleta nearby. As well as the main house, which features spacious living areas, there is separate staff accommodation and various outhouses, which could be used as extra accommodation, subject to the relevant consents.
According to Fawcett, property in both of these major Balearic Islands has appreciated at the slow but steady rate of about five per cent over the past few years. This he says has been driven by normal market conditions and availability of stock. “Land is, obviously, limited and demand is high,” he explains. “But most people buying in the Balearics are looking for a lifestyle investment rather than financial gains – and those looking for a holiday property could certainly benefit from the strong rental market, if they chose to let their property out.”
Of the Canary Islands, Gran Canaria is not, as its name might suggest, the largest, but it is one of the most diverse, with climatic conditions that can have it snowing in the north while bright sun beats down in the south. It’s actually closer to Africa than it is to the Spanish mainland, and offers far greater value for money than resorts situated on and around those stretches of coastline: figures from Spanish property website kyero.com show average property prices in the Malaga and Alicante provinces are €315,000 and €250,000 respectively (£213,000 and £169,000 respectively), while the average price for property for sale in Gran Canaria is €222,000 (£150,000).
The Canary Islands, and Gran Canaria in particular, are positioning themselves as genuine rivals to the traditional Spanish second-home markets such as the Costa del Sol or Costa Blanca,” observes Martin Dell, managing director of kyero.com. “Property buyers are seeking value for money, capital appreciation and a year round rental market. Worries regarding over-development, land titles and corruption on the mainland have also encouraged British buyers to consider the Spanish islands.”
So what might your property search on Gran Canaria uncover? At the cheaper end of the scale, €169,000 (£114,000) is the price on a one-bedroom, one-bathroom apartment overlooking Playa del Inglés, with a swimming pool situated within the complex, while €221,600 (£149,500) will buy a three-bedroom, two-bathroom town house in Loma Dos, with a terrace, garden and views over the sea. Also in Loma Dos is a three-storey house with three bedrooms in a small, six-unit complex with a communal pool. On the market at €390,000 (£263,500), the basement, which includes a bathroom, could be converted into a studio flat for rental or in-law purposes.
Closer to the €1 million mark, there’s a three-bedroom duplex available in El Hornillo for €893,000 (£603,000); it boasts proximity to Meloneras golf course and Maspalomas beach, as well as a large underground garage space. And if golf is a priority, there’s also a €950,000 (£642,000) semi within a complex of 14 units, located in one of the island’s best courses, Salobre. There are views in every direction, whether of the course, the dunes and ocean, or of the mountains inland.
Golf tourism has been an important factor in the growth of the Gran Canaria market in recent years, with three new courses opened and government confirmation that licences for 18 more courses are soon to be granted. Accessibility is another driver (no pun intended): “Being only four hous away from the UK, more and more budget airlines are interested in servicing this destination,” observes John Goldacre, of local agents GoldAcre Estates.
And according to figures from kyero.com, the average price of property has risen by over 20 per cent since July 2006, with average property prices in the typical Canarian fisherman’s village of Arguineguin on the south-west coast of the island sitting at €347,000 (£234,500) – a whopping 68 per cent above the national average. There are still affordable options in the immediate vicinity. Travel just five miles north, though, to the popular family resort of Puerto Rico, and average prices are 43 per cent below the national average, at €117,500 (£79,500).
Tenerife represents an enduringly popular option in the Canaries. In fact, it’s estimated that over 40,000 homes on the island are owned by Brits, and with restrictions on new developments, thanks to a 2001 government decision, price rises, in comparison to the mainland, have been strong and consistent.
It’s not just the foreign market fuelling growth, says Lesley Beeson, of Tenerife Property Shop, in association with Savills. “Tenerife’s resident population is one of the fastest growing in Europe,” he says. “Local demand remains strong and with new mortgage lenders on the market offering a greater range of products, it’s become easier for residents to borrow.”
Rental properties can also be lucrative, says Beeson, especially because of the influx of families seeking to holiday on the island. “For example, townhouses in the popular Torviscas area of Las Americas fetched about €900 per month three years ago, whereas now these properties are more likely to fetch €1200 to €1400 a month – an almost meteoric rise.”
Savills International has a range of property for sale in Tenerife on offer, including a ground-floor studio priced at €84,000 (£57,000). Located in a complex with a heated swimming pool, pool bar, 24-hour reception and an onsite rental scheme, the property is within minutes of Los Cristianos, which has a great array of beaches, shops and restaurants. There’s also a one-bedroom apartment, which is one of only four on the Fañabé holiday complex (the rest is aparthotel). All amenities are onsite, including bars, restaurants and a supermarket; the property is on the market at €215,000 (£145,500). If it’s golf you’re after, there’s an exclusive new development, comprising a mix of duplexes and apartments, set on a course, with prices starting from €279,000 (£188,500). All of the properties come with their own garages and have been designed to maximise the fantastic views of the fairways, ocean and mountains. Choose from ground floor units with gardens incorporating private spas, or those on higher floors, which feature front and back terraces – or go the whole hog and buy a duplex, which has both.
CASE STUDIES
Mallorca
Allison and Mick dated briefly in 1982 before going their separate ways and meeting up again in 2002, with a little help from Friends Reunited. Both disgruntled with the travel time involved with pursuing their careers in the UK, they decided to use a holiday in Mallorca as an opportunity to investigate the possibility of relocating and setting up a business together.
“I’ve run bars and nightclubs throughout a great deal of my working life,” says Allison, “so when Mick said that he’d always wanted to open a bar, I said, ‘let’s go for it!’”
They were very skeptical about one of the four resorts they looked at, where virtually every business was for sale. “It begged the question, ‘why?’” says Allison. They steered clear of said resort, “But Cala d’Or really appealed. There are local restrictions on building heights and exteriors, so it’s an attractive resort, where everything is safe, accessible and intimate.”
They ran the Wet Your Whistle Bar for three years before selling it at a tidy profit in January of this year. “It was hard work,” says Allison. “We didn’t employ staff, so it was just the two of us, 15 hours a day, seven days a week, six months a year. You reap the rewards the other six months of the year, though, when you can just take it easy.”
The couple now own a holiday rental business, not only letting out their own two-bedroom investment apartment but also managing rental properties for clients. They’re thinking about buying a third property and eventually, says Allison, would like to build up a large enough property portfolio to deal solely with their own rental business. “Now that we don’t need to be in Cala d’Or for the business, we’d also like to sell the apartment we live in and buy a finca a bit further out – but that won’t be for a few years yet,” she says.
Tenerife
Alan Spencer and his wife were seriously contemplating buying property in France, and were actively looking for properties on the web. “We knew a few people who had done it and it sounded charming and idyllic, as well as being in easy reach,” says Alan, a keen motor-homer. “But we found that once they’d finished their renovation projects, they were a bit isolated, so that put us off.”
They’d never considered Spain – “And certainly not the mainland, it just doesn’t appeal,” says Alan – but on holiday in Tenerife, they decided they had nothing to lose by looking around.
“We approached Tenerife Property Shop, looked at about 12 properties and came back from holiday having bought one,” says Alan. The property, a one-bedroom apartment in Amarilla Golf, overlooks the course and has views of the sea from one terrace and of the mountains from the other.
“Few people are buying and selling in this complex at the moment and I can see why,” says Alan. “There’s a huge amount of development going on and there’s dust and dirt everywhere – but you have to be able to see past that. I’d much rather buy now than spend more money in a few years time when the completed work has caused prices to shoot up.”
The Spencers paid £107,000 for their apartment and have no intention of renting it out, although family members will use it for holidays. “Our holidays have all been earmarked for the rest of the year,” says Alan, “but hopefully we’ll get to spend some time there next year. My only worry is that we won’t use it enough – my wife likes cruises and I like motor-homing – but with retirement just a few years off, it’s nice to think that we have our apartment in the sun.”
First published in Homes Overseas Magazine October 2007.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.
