Investors are buying up the confiscated property in Spain

Investors are buying up the confiscated property in Spain

Foreign and domestic investors are buying up property confiscated by Spanish banks for non-payment. The cost of such facilities may be less than the market by 71.6%, according to ee24.com citing globalpropertyguide.com.

Most of the facilities are bought with a view to renting it out. Last year, a law was passed, simplifying the investment in rental property. Rental rates have been decoupled from the rate of inflation, which allowed owners raise them more often. Moreover, foreign property owners that rent housing to working people under the age of 30 years, were entitled to a full exemption from tax on the rental income.

At the same time, tax credits for home buyers on the contrary reduced, which inevitably will lead to even greater popularity of rental housing in the near future.

Among the most active buyers is the Blackstone Group, which acquired 18 apartments in Madrid for €125.5 million and Goldman Sachs and Azora Capital, that bought 32 objects of social housing.

Madrid is the largest market of confiscated property with 1,458 residential properties and 1,588 garages. All of these objects in one investment portfolio are worth €67.2 million. Sareb, state "bad bank" needs to get rid of assets by €1,5 billion.

It is interesting that a large number of vacant buildings in Spain has created a serious problem of  squatting. Responsible people say that it will take at least three years to fully get rid of it.