Real estate in Spain is hoping to attract more foreign investment over the next year, following the creation of a 'Bad Bank' in the country.

The government has created the bank as part of a condition of the European bailout, with the purpose of swallowing foreclosed property assets that put pressure on lender's books.

Global Property Guide recently reported that house prices in Spain are continuing to slide, with Tinsa's IMIE general house price index plummeting by 10.8 per cent.

It is hoped that the measure will stimulate activity within the sector and give those looking to invest in Spanish property the confidence to do so once again.

However, Marbella-based director of Spanish Hot Properties Nick Stuart isn't convinced that the Bad Bank will be a silver bullet for the sector and claims that existing banks must do more to make themselves foreign friendly.

"The reality is that, to date, many Spanish banks have been a nightmare to deal with when handling their repossessed stock and foreigners have been put off doing business with them," he said, explaining that they aren't "always conversant in English" and aren't incentivised to "focus on property sales".



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