Why Arabs invest in Galician real estate?
Buying real estate in the property market in Spain by the Arabs is something that has become tradition since they formed as oil countries. Preferred by Arab destinations have been the coasts, especially the Costa del Sol with Marbella. However Galicia has also been in the eye of Arab investors seeking farms and villas, which are very characteristic in the region.
Galicia is associated with rural landscapes of permanent greenery that attracts the attention of visitors, leaving religion aside, the iconic road to Santiago de Compostela which is must for believers and pilgrims in the world, along with an excellent cuisine based on seafood make this very attractive for tourists from all Arab countries locality. To this is added the number of small, very welcoming people who constantly have festivals of great tradition, giving an affectionate and welcoming atmosphere that meets its coast and evokes a permanent festive and beach atmosphere throughout the year.
There has never been a better time to buy or rent property in the beautiful region of Galicia, in Spain. Prices have fallen dramatically in recent years, but they will not stay that way, so it’s a good time to buy or rent with low interest rates and rising markets worldwide. There is an abundance of opportunities, ranging from rustic farmhouses, some lists for the restoration ruins, and complete luxury townhouses with swimming pools.
Empowered by foreign investment throughout 2014, Spain is recovering attractive to the Middle East and international investors looking at the country as an opportunity to make significant profits in the short and long term. After the long lasting recession where property prices fell 30 to 40 percent from its peak in 2007, 2014 was the turning point, especially in Madrid and Barcelona.
The main stakeholders in properties both in Galicia and Spain, are tourists and investors coming from the United Arab Emirates (UAE), which have been favored by the relief granted by the European Union to the citizens of this country who It allows freely throughout European territory without a visa, which was made in order to increase tourism in the region, and promote increased investment, particularly in terms of real estate.
This measure allows the Arabs pass through Europe without any legal requirement, provided that their stay is less than 90 days and 180 days can return to any European country they wish. The Arabs, who have always been attracted to Spain, now enjoy more, and can make their trips more frequently either leisure or business Spanish territory.
The appeal of Galicia: What seek the arabs investing in Galicia?
Regardless of the nationality of buyers in Galicia, which all have in common it is that they seek to take advantage of the low prices they are today. Then, beyond buying properties that are used for holiday purposes with the Arabs they have now focused on mainly two types of properties: large luxury buildings and farms large villas.
Both of these types of properties are used for purposes of generating profitability. Arabs focus on converting these farms and buildings in hotels, whether luxury or rural hotels, which are remodeled or restored with the aim of establishing international quality standards. Gilmar has done so, an international agency that serves as a link between estate agents and Arab investors and sellers of properties in Spain.
In addition, the government of Galicia has attempted to promote Arab investment, through meetings held directly with businessmen from these countries, mainly from Qatar and Arab Emirates work directly with the building plan Galician exports through trade missions funded board of Galicia, placed in direct contact with these entrepreneurs and organizations related to the construction sector companies.
Also Arabs are interested in properties to spend the summer because Galicia offers by far the lowest prices of land and houses, but if you want to add the proximity to the coast and to the cities and airports in the equation then the Galician coast is still a real bargain in European comparative terms. Galicia is characterized by an architecture where rural buildings predominate, however, this has been progressing and also can get buildings post modern, so it is possible to choose between a medieval-style castle to a modern apartment located near the coast. The same goes for prices ranging from a few thousand to million euros.
What they enjoy most in Galicia?
Arab investors are looking now for weather conditions, landscapes and diversity of activities that can be performed, in order to spend the summer, days off, find a retirement home for old age, or simply buy a property for investment purposes to future, since it is known that the real estate market is growing both in Spain and in Galicia, as a consequence an increase in the cost of property in the coming years is expected.
Northern Spain has many rural houses and, although you can find a limited number of typically Spanish villa-style beach for sale with pools and other services, most people who buy a property in this region are looking for some insulation, or a more relaxed back rural lifestyle, which is quite coveted by citizens of the middle east.
For those who want to buy a beach house, they can be collected around the coast. The provinces of La Coruña, Pontevedra and areas such as Sanxenxo and Cambados are good beach areas when it comes to buying property and get unforgettable summers.
If you want to buy a holiday rural retreat away from it all, then look Lugo and Ourense for this type of real estate. Health services and roads in Galicia are excellent and stand out in the rest of Spain, and therefore many of these Arab investors choose these relatively isolated properties, other more central properties.
Reasons for Arab investment in Spain
There are various reasons why Arab businessmen and citizens in general have historically invested in Spain, and with the current conditions, there is greater attraction to the country. Ignacio Acosta Sorge, real estate consultant summarizes the following reasons:
- Low prices after the housing crisis
After the purchase of real estate reached record highs in 2007, in 2008 it bottomed with the economic crisis, which led to a fall in prices of 30 to 40%, in some extreme cases even 50%. These low prices changed the trend from 2014 when the most important cities like Madrid and Barcelona, started their recovery. Therefore, the Arab real estate investors have seen their great opportunity in this market, which have focused on the purchase of residential, office and commercial buildings in order to diversify their investments into other industries. To this must be added the strength that has the Dirham against the euro and the dollar that makes it much easier transaction. While traditional investment locations in the Middle East, like London or Paris are suffering from the high prices that limit the ability to enter these markets, Spain offers lower barriers to entry for investors seeking investment opportunities.
- Growth of the Spanish economy
The International Monetary Fund has made positive estimates of the economic recovery in Spain, and this has encouraged investors to increase their contribution rate and amount of capital to the Spanish economy. Since 2014 it has had a total of 7 billion euros in purchases the property market not related to residential properties, the latter type have reached 6 billion euros, where foreign owners clearly dominate and highlight the Arabs, and this market is expected to keep growing.
- Tourist Strength
Spain historically has been a tourist destination, with a flow of tourists hovering between 60 and 65 million people a year. For this reason, Arab investors have taken to invest in large hotel chains and hotels tradicón in the country as the Renaissance Marriott in Barcelona and the Intercontinental in Madrid. And with that over a billion is exceeded in hotel investment in Spain.
- Credit facilities to investors
Thanks to the improvement presented by the Spanish economy in the last two years has been that banks have eased their conditions for credit loans, and therefore now foreign investors are easier to get money from Spanish institutions to invest in Spain. This has also encouraged starting new enough ambitious real estate projects across the country.
- Golden Visa
Recently, the Spanish government has applied a procedure known in other European countries known as the Golden Visa. This allows acquiring Spanish residence by buying a property that exceeds 500,000 euros, among other requirements. However, the number of citizens of the Middle East who have entered the country through this methodology has not yet made a big effect, probably by the new measure. Yet the government hopes that this will help the massification of Arab investment in Spain such as happened in Portugal for example.
- Decreased purchase by Spanish citizens
Much of the Spaniards, even to them is complicated economically acquire a home due to the aftermath of the recession, so have chosen to rent apartments before finally buy a property. Thanks to this, the rental property has increased by 36% over the past 10 years.
- Following the example of the magnates and millionaires
They have big household names worldwide for its wealth, decided to invest in Spain, including Bill Gates are counted or large financial institutions such as Goldman Sachs, who have made significant contributions to the Spanish economy. Of course, the Arabs did not want to fall behind and also want their share of the market, so leading companies in the Middle East as the National Bank of Abu Dhabi, the Arab Bank Kingdom, IPIC (International Petroleum Investment Company of Abu Dhabi) Emirates and Qatar Airways are already looking where introduced into the Spanish market, which may be beyond real estate. This creates a tendency of investments that encourages other companies lower capital and private citizens to engage in business in Spain.
- Increasing futures prices
While it is true that the prices in Spain have already begun to grow, compared to other European countries like France and England where and prices are high and there is little profit that can be generated by buying real estate in those places why Spain represents a promise of big profits in the real estate market in both the short and long term.
- Flights Spain- Arab Emirates
Since early last year, offering direct flights from Dubai to Barcelona and Madrid, which makes it easier and faster trips enthusiasts Arab citizens Spanish territory. Similarly, Spain has excellent road facilities, railway, and airport communication between all cities, and also the Arabs will have legal limitations, since they can travel without a visa throughout the European territory.
Conclusion: the Arabs are one of the communities because of their economic growth, they have invested in different parts of the world. The Arabs in Spain have traditionally been interested for its beaches and now Galicia has begun to also be presented as an option to invest in vacation properties also now have the advantage that they can freely enter Spanish territory without a visa, the which is an incentive to invest.
Written by: CAPD
Contribution to the reader: This article reflects the growing interest shown by both Arabs properties in Galicia and in the rest of Spain. Therefore, they have made millions of dollars to acquire property for purposes of both enjoyment and investment profit also. Likewise it is shown the benefits to a person from the Middle East to invest in Spanish territory.