With the news that Spain has now one of the highest property rates of construction in the world and by far the largest in Europe you would think that it is become the most sought after place to live.

Unfortunately the first wave of owners to populate the south coast are now by all accounts leaving in droves to other shores fed up with the constant view of cranes and buildings and the progressive downsizing of apartments that has brought to their 'calm locations' feelings of never ending construction to the point where much of the Costa landscape is now beyond compare. Many of the foreigners aghast at having their new properties subsequently overlooked by twelve storey tower blocks, built with permission granted - but not approved in any sense apart from the financial easement of large wads of 500 Euro notes from developers to planners, have simply sold and left. Some have stayed in Spain - many have gone to find happier ground leaving the Spanish property market to the greed of Constructionists, the optimism of holiday makers who have been told that their new properties are a firm investment and the lethargy of the government departments in charge of planning.

Spain is the only country in the world to have reached the zenith of construction and it is against this background that anyone wishing to buy here must consider their own plight seriously.

Let us take the investment in property for example - admittedly property is meant to rise by 12% a year but even assuming this forecast is correct – it is a gamble. But there are so many hidden costs in having a holiday home that many people filled with the dream just ignore.
Unless the owners are renting out their property which entails considerable cost in itself they will either have to fund a mortgage or pay their cash over. It does not matter whether it is your own money or a mortgage effective if a house is bought for E300000 then the interest you would have with the savings would probably make you more than 12% - especially as the mortgage may cost more in the long term. At present the interest rate is about 5% - and climbing. If you pay off some of the money then more - and that will have to be funded. Unless you are extremely rich with cash to spare – spare a thought... The house might appreciate by 20% but you will have to pay 20% capital gains tax on any increase in value when you sell it.

When you have the property what about the taxes, ground rent etc? If your new holiday home is on an urbanisation – especially a golf course these can be exorbitant. They can be downright corrupt: maintenance firms in one area paid 2.3 million for facilities that cost 30,000.
These histories are not unique but are inherent through Spain where business is run along the standards of 'whatever I can get away with'.

Corruption is so rife among the property market many of the Spanish are known to have their own family homes continually on the market for exorbitant prices – just in case someone with 'a dream' and 'no sense' comes along.
Constructors are known to have bought vast tracts of farming land around the coast which they have been keeping for many years - this they have rented back to the farmers. Now they are consistently testing the planning authorities in a maintained lobbying attack until they receive the permission to build. The land was bought very cheaply – they can afford to wait until either the rules change or the right person sits in the planning office. An estimated 60% of all farming land in the first 2 km from the coast is owned by developers...waiting.
The commission paid for a new property in Spain is often between 15 and 20%, resale about 5%. These large commissions are a direct indication of how unrestricted the property market is in Spain.

The rule is that you need to know what you are doing, think, work out how much it is worth for you to tie your holiday period to one place. The Spanish people use their holiday homes for two months a year... they can – but it is the two months of the summer. It will not be easy to rent outside of this.

Above all else just remember that the application of planning law is in such turmoil that the countryside around your property may change drastically enough so that living there is vastly different from that you would expect.