Those looking for Spanish real estate could soon find themselves fighting off fierce competition from Indian investors. Experts claim that buyers will be flocking to the country as a result of the new residency scheme, which offers residency permits to foreign investors buying property worth approximately £131,147 (€160,000).

Sonu Iyer, partner and national leader for human capital and global mobility at Ernst & Young, explained to The Economic Times: “This is an effort by the Spanish government to attract foreign investment. Considering that Indians are increasingly being seen as high spenders globally, the scheme will be targeted at them in a big way.”

The residency scheme is hoped to give the property market a boost, putting an end to falling prices and helping to shift Spain’s excess real estate. Portugal and Ireland are also offering similar schemes, but have set higher property price thresholds for the permits than Spain, standing at €400,000 and €500,000 respectively.

This means that Spain may have the competitive edge, acting as an “attractive launching pad into Europe” for Indians. However, Mr Iyer told the newspaper that the jury is effectively still out on the scheme, as the precise details have yet to be revealed. “The lure of permanent residence in Spain for high net worth Indians could be children's overseas education or retirement in the Mediterranean. However, since the details of the scheme, including tax implications, are yet to be announced, we are not sure of the level of interest this scheme will generate in India,” he said.

Nevertheless, Anuj Puri, chairman and country head of real estate consultancy Jones Lang LaSalle India, is confident that there will considerable Indian interest in Spain over the coming years, as long as the country delivers on a few key points. He explained to the Economic Times that currently Spain is not one of the preferred destinations, with the US, UK and Dubai offering an established Indian workforce and new employment opportunities. “A lot will depend on how Indians see Spain as a job market or a country to do business in, which again will be a factor of Spain's macro-economic outlook," Mr Puri said.

The Global Property Guide is interested to see how the residency permits will affect the property market as a whole, with prices continuing to fall in the country. Knight Frank’s Global Price Index showing the cost of purchasing a Spanish second home fell by 2.5 per cent between the first and second quarters of 2012 alone.



Who's Online in Finance

We have 3 guests online