Home prices in these areas have dropped at a different rate than those in the rest of Spain. In cities along the Mediterranean cost, for example, home values decreased around 6% year-on-year in the year’s first quarter versus the average of 4.7%. The data reflects a major decrease in prices, especially in the cases of Marbella (-40%), Torrevieja (-31%) and Ibiza (-29%).
The Spanish Ministry of Development sponsored a European road show to sell homes abroad which highlighted the competitive advantages of Spain such as safety, geographical proximity, good weather, quality of life, high quality universal public services and infrastructure which is constantly being improved to better connect main tourist destinations.
It is worth bearing in mind that in 2010, home purchases by foreigners residing in Spain increased 20.8% from 2009. In view of this, along with other measures meant to promote foreign investment in the Spanish real estate sector and to offer greater security to foreign real estate investors, the Spanish Ministry of Development has opened an informational website called “Spanish Real Estate”. www.fomento.gob.es/spanishrealestate/.
For their part, real estate agencies are starting to use the Government approved VAT decrease from 8 to 4% on new homes as an advertising lure for foreign buyers. With many foreign tourists still vacationing on the Spanish coastline, developers and agencies are making a concerted effort to benefit from the tax benefits granted by the Government. Many companies are already preparing marketing campaigns which highlight the decrease in taxes aimed at foreigners who plan to buy property and wish to take advantage of this decrease which will only be in effect until December 31, 2011.
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