Foreign cash stokes Spain property market

Foreign buyers are snapping up Spanish property, including the grand yellow-brick ABC Serrano mall in Madrid's poshest shopping district, a Spanish symbol of tradition and elegance.

Foreign cash stokes Spain property market
The ABC Serrano mall in Madrid. Photo: Ricardo Ricote Rodrígiuez

Like shops, offices, and apartments across Spain, it has been snapped up by foreign buyers, who are streaming back a year after economists were warning the country faced ruin.

"Since this summer there has been investment fever in Spain," said Jose Luis Ruiz, an independent real estate consultant.

"There are dozens of investment funds from all the major countries, such as Americans, Germans and British, who are focussing on Spain."

Topped by a cupola and overlaid with blue tiles, ABC Serrano was formerly home to ABC, a leading conservative newspaper.

"It had become obsolete over the years but it still benefits from its unique location," said Thierry Julienne, chairman of IBA Capital Partners, the international investment group that bought the building.

"This is a fantastic opportunity for us to recreate a first-rate landmark in the socio-economic fabric of central Madrid," he told AFP.

Los Angeles-based real estate giant CBRE said in a report that investment in Spanish real estate has returned to the levels it reached before the crisis of 2008, when a decade-long building boom went bust.

Such investment doubled in 2013 to four billion euros ($5.5 billion) thanks to international investors, it said.

Mikel Marco-Gardoqui, CBRE's director of cross-border investment in Spain, said the surge was driven largely by investment funds from the United States, Britain and France, plus rich private investors from Latin America.

"Lots of investors, mostly international ones, are coming back to the market, and that is driving a slight recovery in prices," he told AFP.

"There is lots of floor space available, the prices are starting to rise, profitability has improved, so they are coming back to the market very actively."

In the residential sector, Ruiz said, "there are loads of foreigners — French, Belgians, Dutch, British, Germans and lately Russians who want to have a house here for their retirement, or as a second residence."

House prices rose by 0.7 percent overall in Spain in the third quarter of this year, the National Statistics Institute said — the first rise since 2010.

The figure was hailed as a further sign of recovery after news that Spain timidly emerged from recession in the third quarter of this year.

But professionals remained cautious, even if prices are starting to rise in coveted spots such as the sunny coasts.

Spain's banks, which were bailed out last year with €41 billion ($56 billion) of international rescue funds, still have piles of cheap properties left over from the building boom, which have lost much of their value.

The overall rise in house prices "is a positive figure, obviously," said Carlos Ferrer-Bonsoms, a Madrid-based director at international real estate firm Jones Lang LaSalle.

"But at the same time people are asking how it is possible when you consider how long the banks will take to get rid of the stocks they have."

Fernando Encinar, one of the founders of Spain's leading property advertising website Idealista, estimated the number of unsold homes on the market at 1.5 million, casting doubt on the prospects for a sustained recovery in prices.

Nevertheless, he said, home purchases in certain areas and among certain people are thriving.

Middle-class Moroccans are buying homes in Malaga and "the French are buying like crazy on the Costa Brava," an eastern beach region long popular with the British.

Another increasingly common profile of buyer, Encinar added, is the so-called "Russian widow", set up with her children in a house in sunny Spain while the working father stays based in Russia.

The 2008 collapse plunged Spain into a double-dip recession, throwing families into poverty and driving the unemployment rate up to 26 percent.

Estimates by the government and Idealista indicate that house prices have fallen overall by about 30 percent since early 2008.

But the public works ministry said the number of homes sold in Spain in October 2012 to September 2013 was 1.4 percent higher than a year earlier.

In that period, the number of homes bought by foreigners surged by nearly 25 percent. Foreigners accounted for a record 17 percent of those sales, with British, French and Russian homebuyers in the lead, the ministry said.

"We have the good fortune to be a country very popular with tourists" and foreigners who want to settle here, said Ruiz.

"Spain is in such a bad way at the moment that our only way out is through outside investment," he added. "It is very hard to do it by ourselves."

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members


EXPLAINED: What you need to know about locksmiths in Spain

If you get locked out, have a break-in or need to change or fix the door lock at your home in Spain, here are the rates and advice you need before calling a Spanish locksmith (cerrajero).

EXPLAINED: What you need to know about locksmiths in Spain

Like anywhere, locksmiths are generally expensive and the price can vary greatly depending on the service you need and where you are.

It also depends on when you need them, as it’ll cost much more to call them out on a Saturday night than a Monday morning, for example.

Nor would it cost the same to open your front door as it would a reinforced security door.

But locksmiths don’t just make copies of keys and bail you out when you’re stuck outside your flat.

They also offer a whole host of different services including, but not limited to, opening safes, creating master keys, installing security doors, anti-drill doors, cutting specialist locks that reject copied keys, and even unlocking the boot of your car.

How much does a locksmith cost in Spain?

Given all these variables, the price can range massively.

According to Cronoshare, the average price for a nationwide call out in Spain can start from €80 anywhere up to €400.

On average, for a basic service, you can expect to pay anywhere between €40-€70 an hour for the labour, with the price of changing or installing a basic lock anywhere between €80-€200. 

For basic door openings, it depends on the situation you find yourself in: for doors locked with a key, which is a more complex task, prices average around €200, and for doors that are jammed or slammed shut, slightly cheaper in the €80-€100 range.

For an armoured or security door, prices can start at around €300.

In short, a general rule is that the more complex the task is, the higher the prices.

And as always, prices can vary depending on where you are in Spain, the quality of the locksmith, the time of the day and week you need his or her services, and if its a public holiday or not. 

So, as always, compare prices to try and find the most economical solution without skimping on quality.

As such, the following rates are estimations taken from average prices from locksmith.

Weekend/holiday rates

Where prices can really start to add up, however, is when you have an emergency situation requiring a locksmith’s assistance at the weekend, on a public holiday, or outside of normal working hours.

And if you live in Spain, you probably know there’s quite a few of those days throughout the year.

If you really need a cerrajero on a public holiday or during non-working hours (usually defined as anything between 8pm-8am) prices can reach €300 or €500 due to the fact you’ll have to cover the cost of travel, which starts from around €40 plus the increased rate.

Then you must also include the price of labour to the flat rate, which is usually somewhere between €40 and €70 an hour regardless of when you call them out.

Key vocabulary 

We’ve put together some of the basic vocabulary you might need if you find yourself needing a locksmith while in Spain.

el cerrajero – locksmith

la llave – the key

la llave de repuesto – the spare key

la puerta – the door

la cerradura – the lock

la bisagra – the hinge

día festivo – public holiday

cambio de bombín – change of cylinder lock

puerta blindada – armoured door

coste de mano de obra – labour costs

quedarse afuera – get locked out 

puerta cerrada de un portazo – door slammed shut

puerta cerrada con llave – locked door

Tips relating to choosing a good locksmith in Spain 

If you’ve just started renting a new place or have bought a property, it’s advisable to change the lock as you don’t know who has keys to your front door. If you’re a tenant, try to negotiate this with your landlord as it’s in both of your interests that only you two have keys to the property.

If there has been a burglary in your property while you’re living in it and there’s no sign of forced entry, then there’s a very big chance that the burglars had a copy of your keys, and you should definitely change the locks. 

If you’ve lost your keys and you think it happened close to your home, again it’s advisable for you to change the locks.

One of the best ways to avoid being locked out and having to cough up a hefty sum is to give a spare set to someone that you trust that lives in your town or city in Spain. 

When it comes to choosing a locksmith in Spain, you should make sure he or she is a reputable one. Asking friends and family first can be your first port of call.

If not, make sure you read reviews online if available to get any insight beforehand.

In order to avoid any nasty surprises, ask them on the phone for a budget (presupuesto) for all the costs attached to their services before accepting.

Be wary of cerrajeros that automatically want to change the whole lock when a simpler and less costly option is possible. 

Usually they should offer you a contract for you to read carefully before signing. It should include a three-month guarantee for the potential new lock or at least a breakdown of the costs.

Make sure that they are not charging you an excessively high price if it’s an emergency, as this is not actually legal.

There’s also asking them to prove their accreditation with the Unión Cerrajeros de Seguridad (UCES).

Weekend and holiday rates can be higher nonetheless, so consider your options and if it’s worth staying with a friend or family member for a night to save some money. A trustworthy and honest cerrajero will let you know about the money you could save if you choose to wait as well.