Spain reigns again

Then there’s the euro. Its fluctuations have steered our desire for Spanish holiday homes: from the boom times, 11 years ago, when the pound bought €1.50, to the dreary days of 2009-11, when near parity put us all off. Now we’re back in the happy zone, with £1 buying €1.38.

“Our office in the Costa del Sol is seeing first-hand the resurgence in appetite for Spanish property,” reports Marianne Gilmore, commercial director at the foreign-exchange broker Moneycorp. “A year ago, a €250,000 property would have cost about £204,000. Now it’s about £182,000.”

As for the eternal question “Are we nearly there yet?”— in this case, whether house prices have hit rock bottom at last — there is disagreement. Some fund managers think they have further to fall; some agents in Barcelona think they reached it two years ago. Tinsa, a property valuation firm, believes the Spanish market is back on track and predicts no change in average prices — when you even out all the regional differences — in 2015.

Typical values dropped by 5% in 2014, but transactions rose significantly (although still to only a third of the number seen in peak 2006). “Purchases by foreign buyers in 2014 were up by 28% on the previous year, and one in five of them was British,” says Neville Page, director of the international department at Chestertons estate agency. The property portal Kyero reports that January 2015 saw the highest number of online Spanish property searches since the company launched in 2003.

Sounds good? Hold on, though. “It’s a market of two halves,” says Barbara Wood, director of The Property Finders in Andalusia. “The domestic one remains depressed and the overseas sector is thriving, but only in prime locations, and largely in three regions — Andalusia, Valencia and Catalonia. It underlines how important foreign buyers are right now.”

In the province of Alicante, which includes the Costa Blanca, foreign buyers accounted for 47% of total property purchases in 2014, while in Malaga province, which includes the Costa del Sol, they accounted for 40% across the board and 75% at the luxury end. “In the boom years, overseas buyers accounted for less than 10% of total buyers,” Wood says.

Mortgages are cheap again — Euribor, the interbank rate charged between European lenders, is about 0.3%. Banks are newly buoyed up by the forthcoming quantitative easing measures, which are designed to boost the flagging eurozone economy, and are battling to offer the best deals. Yet about 85% of overseas househunters buy with cash.

Anyone considering entering the Spanish property market should also bear in mind the high buying costs — 10%-13% of the sale price — as well as agents’ fees of at least 5% when you come to sell. “Prices have to rise by at least 15% before you see any profit, which makes it even more vital to get the location and price spot-on,” Wood says.

Some Britons are buying for investment potential. James Evans, head of Cluttons estate agency in Andalusia, reports that City boys priced out of London buy-to-lets are now ploughing their bonuses into Spanish golf properties. “On a popular resort such as Los Arqueros, less than an hour’s drive from Malaga, properties command good yields in winter,” he says. “You can get excellent value, with two-bedroom flats starting at €180,000. And you really can’t go wrong with Puerto Banus, where two-bedroom flats at Medina de Banus start at €280,000.”

For most people, however, buying a home in Spain isn’t about second-guessing the market. It’s about loving the climate, the landscapes, the beaches, the food, the festivals and the lifestyle so much that the only way to handle leaving is to start sneaking looks at property portals as soon as you get back home.

What is not in doubt is the huge array of property for sale in Spain, from high-quality new-builds on the beachfront to wonderful old fincas in the hills — extraordinary value in some cases; eye-watering expense in others. Here is a whistle-stop tour of what you can find.

Cheap and cheerful

This can only mean a compromise on location — which may not be a problem if you’re thinking long-term, or on a purely lifestyle or retirement basis. If you want high rental demand and some hope of seeing a profit in the next few years, you have to be within walking distance of the beach — which is far more feasible on a modest budget than it was a decade ago, thanks to falling prices and the number of bank repossessions that have been turned around by developers.

Yet Wood sounds a note of caution: “It is only quality stock in prime locations that is booming. In Andalusia, nearly half of all sales last year were in Malaga province, and most of those in just two municipalities — Marbella and Benahavis. They cover the ‘golden triangle’, with all the best beachside properties, golf courses and luxury developments in the hills.”

San Pedro de Alcantara is in that triangle, and on the up now that its historic centre and beach — previously separated by a constantly clogged motorway — are linked by a new park, with the traffic diverted through a tunnel. The beach area is taking on a new life as a result, and developments include Jade Beach, where two-bedroom flats start at €450,000 (00 34 951 319994, lucasfox.com). In Los Arqueros Beach, you can buy a new three-bedroom flat for €335,000 (0800 012 1020, taylorwimpeyspain.com).

Offering exceptional value just east of Marbella, in Altos de los Monteros, is Samara, a new development a couple of miles inland. Two-bedders on a hillside, with communal pools and amazing sea views, now start at €150,000, down from €400,000, (020 7201 2071, chestertons-international.com).

For keenly priced properties of reliably good quality, Taylor Wimpey, which has half a century’s experience of building in Spain, has various well-located projects on both of the key coasts. On the Costa del Sol, flats at the La Cala golf resort, in Mijas, start at €248,000 (0800 012 1020, taylorwimpeyspain. com). They should be ready in September 2016.

On the Costa Blanca, the prettiest perennial favourites are the towns north of Alicante, including Calpe, where Taylor Wimpey’s Calpesol development has three-bedroom houses from €179,500, and Villajoyosa, where two-bedroom apartments direct beach access at La Vila Paradis start at €239,000. Javea is another appealing Costa Blanca town, where life focuses on Arenal beach. A three-bedroom furnished flat overlooking the beach is on sale for €260,000 (00 34 965 790803, javea-hamiltons.net).

The Spanish government is considering revisiting its €1bn Tren de la Costa programme, which would see expansion of the rail network throughout the Costa Blanca. Although the plans were put on hold during the crisis, work was going on in the background — and the proposals, if they ever become concrete, would greatly enhance the area’s accessibility.

South of Alicante, traditionally the cheaper part of the coast, is Las Colinas Golf & Country Club, a low-density resort in a vast hidden valley, 15 minutes’ drive inland. It’s surrounded by almost 40 square miles of protected land, and two-bedroom flats with communal pools start at €200,000 (020 7861 5015, knightfrank.com).

In Alicante province, which includes Benidorm, overseas buyers account for almost half of all sales (Getty)

Chic and not so cheap

The blingy Marbella of ill repute is a minuscule pocket that bears little relation to what this very Spanish town is all about. For its more chic side, just head east or west of the busy centre to the beautiful enclaves around Elviria and Cabopino; along the Golden Mile, which stretches from the west of the city to Puerto Banus; or into the hills of the Sierra Blanca. There you get to soak up the pleasures of this part of the coast — beautiful beaches, phenomenal views and an enticingly relaxed, sporty, sociable way of life with sunshine all year round.

For aspirational types, Villa La Favorita, on the Golden Mile, is the height of decadence: a new-build 12-bedroom palace that is on the market for €32m (00 34 952 868406, engelvoelkers. com). Also on the Golden Mile is the Playa Esmeralda complex, a short walk along the sand from Puerto Banus, where a two-bedroom flat is on sale for €1.2m through Knight Frank estate agency’s Marbella affiliate, Diana Morales Properties (00 34 952 765138, dmproperties.com).

Inland has lost its appeal for most buyers — why would you go there when there is so much value on the coast? — but wealth still flows to the select pockets it has always favoured, including Gaucin, whose countryside is home to some of Andalusia’s most handsome rural estates. The four-bedroom Finca de Palmero, on sale for €2.5m, already has 17 weeks of bookings lined up for this year and grosses €70,000 annually (00 34 951 168007, luxuryfincagaucin.com).

“This grand villa is more traditional in style, but the trend for modern design and minimalist interiors is also moving inland,” says Wood, who mentions La Dehesa, a striking, energy-efficient property with a huge glass cathedral of a living space designed to take in the views over land and sea. It’s available for €2.85m through the owner at Finca de Palmero (00 34 951 168007, luxury countryhousegaucin.com).

Another inland property that rakes in the rent is the six-bedroom Villa Katerina, on the La Zagaleta private estate, which has been reduced in price from €5.95m to €4.9m (00 34 608 264148, aylesfordspain.com). “The owner is inviting offers for a quick sale, and it often rents for more than €20,000 a month,” says Michael Corry-Reid, Aylesford International estate agency’s Spain consultant.

For Spanish city chic, Barcelona takes a lot of beating, and its beachfront and adjacent old port are the focus of a huge regeneration plan. A three-bedroom flat overlooking Port Vell — the new superyacht marina — is on the market at €900,000 (00 34 933 562989, lucasfox. com). A few miles along the coast is Diagonal Mar, a modern beachfront area where prices have risen by 18% in a year, according to Guifre Homedes Amat, head of Amat Immobiliaris. He is marketing four-bedroom flats in Les Torres de la Mar Bella from €999,000 (00 34 934 529960, amatluxury.com).

For elegant period properties near designer boutiques, head to Eixample, in the city centre, where Lucas Fox has flats in a rare renovation project near Paseo de Gracia. The stylish new properties start at €595,000 for two bedrooms.

House prices in Barcelona have fallen by 27% since the crash, according to the property portal Idealista, but Mark Stucklin, director of Spanish Property Insight, reckons they are now “bottoming out after several years of decline. The pipeline of new stock is bone dry in a city with acute geographical limitations on the supply of land and housing.”

Mallorca has become the preserve of wealthy British buyers, who now outnumber Germans in glitzy Andratx, in the southwest, where villas can cost up to €40m, and Alcudia and Pollensa, in the north. Almost all of them buy in cash, too.

“Mallorca’s USP is good long-term investment potential,” says Hans Lenz, managing director of Engel & Völkers estate agency in the southwest of the island, who is marketing a four-bedroom villa in Puerto Andratx for €8.8m. The property has been let out for €250,000 a year for the past three years to the same client.

Also under construction in Andratx is Torre Camp de Mar, where two-bedroom flats with beach access, 50yd from the golf course, start at €725,000 (00 34 971 674780, engelvoelkers.com).

Palma, Mallorca’s capital — where one third of buyers are British, according to Sotheby’s International Realty — is also upping its luxury offering, with at least a dozen boutique hotels having opened in the past year, along with designer bars and restaurants. Most British buyers in the city seek apartments in the historic palacios. Two-bedroom properties of this type start at €600,000 (00 34 971 721000, mallorca-sothebysrealty.com) and rise to €12m or more.

The jet-set juggernaut that is Ibiza continues to thrive, with three five-star hotels opening this summer to add to the glitz. That makes nine in total — compared with just one a decade ago. Those wanting a minimalist palace in the countryside should go to Santa Gertrudis, where the stunning Casa Libelai is on the market for £3.8m (020 7016 3740, savills.com).

For life in the thick of it, you can buy a one-bedroom loft in Ibiza Town for £493,000, also through Savills. Two miles inland is Jesus, a village that has become extremely popular. A new-build three-bedroom villa in a gated community there is available for €2.95m (00 34 971 310799, ibiza-sothebysrealty.com).

New frontiers

While Barcelona has always been the fun city, and Madrid the place to do business — and take a quick peek in the Prado before heading back to the airport — all that’s changing. The capital’s best-known central areas are seeing makeovers, there’s a new buzz to the city, and if you long for beach life, there are 90-minute fast train links
to the coast.

Madrid was tipped as one of the top five European property investment markets for 2015 in a recent report by the Urban Land Institute and PwC. “Prices are coming back and the market offers a lot of opportunities,” said one investor interviewed for the study.

The iconic Torre de Madrid, on Plaza de España, in the heart of the city, is being redesigned to include 25 loft-style flats, with prices starting at €454,000 (00 34 33 562989, lucasfox.com).

Just as Valencia was revelling in the America’s Cup and Formula One glamour, and finding a following among buyers looking for a cheaper Barcelona, Spain crashed and the city went quiet. Ryanair clearly likes it again, as the airline will be operating 27 routes to the city this summer. For that city/beach combination, head to La Malvarrosa, where you can buy a three-bedroom flat, 100yd from the sea, for €230,000 (00 34 960 077790, lucasfox.com).

Finally, the beaches on the Costa de la Luz, in Andalusia, are among the best in Spain, and the Moorish hilltop towns behind them are stunning, but the area has the feel of a wild, less-trodden road, thanks to much of its land being protected. Zahara de los Atunes is a small, laid-back, bohemian beachfront town where you can still buy one-bedroom flats near the beach for €150,000, or a three-bedroom townhouse for €280,000 (00 34 956 439566, zaharavillas.co.uk).