24,000 new millionaires in Spain to rising property prices

Property owners in Tenerife received another confidence boost with the publication of a study by Merrill Lynch and Capgemini.  The study shows that the number of Spanish residents with a million Dollars or more in liquid assets (excluding property, jewellery, art and other fixed assets) has risen to 129,000, up by 24,000 since the year 2001.  Experts attribute this rise in the number of millionaires resident in Spain to profits gained from property sales.  Tenerife Property Shop, experts on Tenerife's property market, maintain an index of island property prices which confirms this research.

Mary Spencer pointed to further evidence of this 'enrichment through property' by highlighting statistics attained by Tenerife Property Shop's research department.  In 2003 the average mortgage sold in Spain had a duration of 20 years but due to early cancellations, the average duration of all mortgages was only 7.3 years.  Mary commented, '75% of Spanish mortgages are cancelled early, and this is largely due to people selling their houses, cashing in part of the profits, and then investing the rest back into the property market.'

Mary went on to define this property buying market further.  'Spain is the second highest in the European rankings of owner occupiers, which is made up of both Spanish and foreign buyers.  Foreign buyers are becoming an increasingly important factor.'

Tenerife Property Shop's research was further supported by the European Mortgage Federation who report that Spain has the second highest level of household owner-occupation in Europe (pre-enlargement) with 81.8%, behind Greece (83.6%) but higher than Italy (81.5%), The Republic Of Ireland (80%), Portugal (76%), The UK (69.1%), Belgium (67.3%), Sweden (60%), France (56.4%), The Netherlands (52.7%) and Denmark (50.9%). In Germany only 40.5% of families own the property they live in.

The local statistics, showing the increasing importance of foreign investors made available by Tenerife Property Shop were also reinforced by other bodies.  The number of foreigners buying second homes in Spain is expected to overtake the number of resident buyers by 2008 according to Luis Perales Asesores. They forecast 116,000 holiday home sales in Spanish coastal regions during 2004, of which 60,000 will be bought by the Spanish and 56,000 by foreigners. By 2008 they expect the number of holiday homes sold to have risen to 148,000 of which 72,000 will be sold to local buyers and 76,000 to foreigners.

Mary Spencer expanded on the reasons behind this 'foreign invasion'. 'It's not just the obvious investment potential and ideal weather conditions that prompt foreigners to buy on this beautiful Island.  A key element is how easy a good estate agent can make the process.  Obviously I can only speak for us at Tenerife Property Shop, but our emphasis on assisting clients to hassle free purchases has certainly tipped the balance in many cases.  We have a track record of one hundred percent of our clients receiving clear and unencumbered freehold title deeds to their property.'