A proposed new law in Spain that would result in people buying property being given residency is set to attract a large number of buyers from Asia and the Middle East. The move is regarded as an attempt to boost Spain’s beleaguered property market and targets well off people from outside the European Union who currently need visas.
Russian buyers are already leading the way as the current the visa system limits them to a 90 day stay but if the proposals are adopted they will be granted residency if they spend €160,000 on a property. According to the latest figures from the Malaga Developer’s Association the Russians have overtaken the Germans to become the second largest international group of home buyers on the Costa del Sol.
Russians now account for 9% of foreign property purchases in the region with the Germans dropping to 7% although British buyers remain the biggest foreign group at 35%. ‘It is the start of a greater wave of Russian clients on the Costa del Sol. Russian purchasers tend to be quite privileged and have money to spend on top quality homes. Most are seeking a villa, as opposed to an apartment, and some are especially drawn to secure, private, gated communities such as La Zagaleta, one of Spain’s most coveted country estates. Price tags of two million euros, ten million euros, don’t tend to scare them,’ said Nick Stuart, director of Spanish Hot Properties.
‘The Russian middle class is now growing and becoming more affluent, snapping up properties overseas in sought after locations. In the past it was only a select few oil rich Russians that had immense buying power. This has clearly changed and evolved into a much more open market,’ said Michael Lovett, managing director at Fine & Country Spain. He said that Russians will pay elevated prices if the product meets their expectations, keeping state of the art new builds on the Marbella beach front in high demand.
Quote from PropertyCommunity.com : “I read an article that if I buy a home that costs about $200,000 U.S.D. I’ll get automatic Spanish Permanent-Residency which I imagine will lead to Spanish citizenship after a few years even though I’m not European. Is that true ??”
‘Today’s buyers are changing, insisting almost exclusively on sea views and quality designs meaning we are obliged to offer only the very best of what the market has to offer. Interest in Andalucian rustic style homes is very rare now, as most buyers do not settle for second best,’ he explained. ‘Middle Eastern and Asian buyers are expressing an interest in the proposed residency law and purchased property purely to meet the requirement for residency,’ he added.
Signs that the Russians are here to stay include the fact that Spain’s largest Russian Orthodox Church is being built near Marbella, demand for Russian lessons from estate agents, restaurant workers, gym and spa owners and shop workers is increasing and shops are stocking Russian produce. ‘The kind of Russian who comes to Marbella has a healthy bank account and will spend good money on golf courses, in elite fashion boutiques and fine dining restaurants, up to double that of their British counterparts,’ added Stuart.
Indeed, the Spanish Consulates in Moscow and St Petersburg have had to double the number of staff handling visa applications. However, there have been complaints made about Spanish bureaucracy, the time it takes to obtain permits and the restrictive nature of maximum 90 day visas.
Estate agents believe that if the residency plan is delivered the number of Russians, and indeed Chinese and other investors outside of the EU, participating in Marbella’s property market will surge. They say this will be a very welcome ray of light in a market that is still adjusting to reduced overall purchaser activity, suppressed prices and very little new construction at all.