It has been the main topic of discussion in may national newspapers over the last couple of years with rumors of a major property crash in Spain, corruption at the highest levels and developers going bankrupt, but is Spanish property still a good bet?

Well let's take some of the stories that have appeared in the national press over the last couple of years. One week we read that the property market in Spain was over, prices are set to tumble and the market is about to totally fall apart. Two weeks later the same paper published an article stating that people should still invest in Spanish property as the economy is stable, the infrastructure is sound and the climate is one of the best to be found in Southern Europe.

Which article is right?

OK let's take some of the main points that were made.

YES the property market in Spain is certainly going through some very difficult times and prices have reduced Year on Year in many parts of Spain - FACT.

A number of the top property developers have filed for bankruptcy protection - FACT. But let's be clear here, this is very different from actually being declared as bankrupt. These developers and constructors are sitting on assets worth a fortune and in normal economic times they would simply have rasied finance against these assets to keep the wolves from the door and continue building. The main problem is that the banks are not lending at the moment. This will not be the case for ever so the only option is to file for protection from their creditors so that they can continue to trade (in the hands of the administrators) and hopefully trade their way out of trouble.

It will of course mean cuts in jobs, cuts in spending and a slowdown of any further construction for this period but all going well, at the end of the term they may well be in a position to resume normal trade or raise finance to exit administration.

Corruption - FACT

Yes there is a major clean up operation underway in Spain to clean up the way building licenses are issued. It is going to result in the demolition of some developments that have been built in areas that were not urban but in many cases the developers are being fined and made to develop green areas elsewhere to compensate.

The current crackdown on corruption is actually a good thing and will make it a much safer place to purchase property in the future.

Property Crash - What property crash?

Yes demand is lower that previously and sales are down. Prices have come down about 8% on average over the last year on the Costa's (about 4% nationally). This hardly constitutes a property crash. Of course there are some bargains to be picked up as some people may need to off-load properties due to not being able to raise finance or just tightening of their belts.

All in all Spanish property still remains a very good purchase. Not only are they buying bricks and mortar, more importantly for many people, they are buying a lifestyle. A great all year warm climate, a lower cost of living and a more laid back life are some of the main criteria for purchasing Spanish properties. Unfortunatley many of the eastern european markets cannot offer all of the above whilst still being a couple of hours flying time away.

Our suggestions - RESEARCH

The Internet is one of the best ways to find out what is really going on. There are numerous news sites, Spanish property forums and BLOGs. It is much easier to research areas, towns and developments. You can see what other buyers have to say and really make sure that the area / development you are considering ticks as many boxes as possible.

All of this can be done before stepping foot outside of your own front door.