About 500,000 of Britons own property there, and the Association of International Property Professionals (AIPP) says that 31 per cent of overseas buyers last year chose Spain.
Yet there is no doubt that it has been a difficult year for the Spanish property market. After a decade of gold-plated returns, with prices across Spain increasing by a staggering 270 per cent, buyer confidence was shaken in 2007 by reports that property was 30 per cent over-valued.
Overbuilding, particularly on the Costa del Sol, was largely blamed, along with high-profile cases of official corruption and properties sold without proper planning permission. Figures from Savills International show that price growth fell from 15 per cent in 2005 to nine per cent in 2006, with a further drop to seven per cent in spring 2007.
“Some expect a sharp deterioration in the Spanish market, but a consensus view is emerging of a ‘soft landing’ with future moderate price growth and a sharp reduction in new-build,” says Savills director Charles Weston–Baker. “There are still strong regional differences in prices.”
Savvy buyers are turning away from over-built and characterless resorts to focus on areas with an authentic Spanish flavour, such as the Atlantic-facing Costa de la Luz, with its magnificent pueblo blancos (Moorish white villages). Cities such as Seville and Barcelona are popular with younger buyers, while the Balearic islands of Mallorca and Ibiza continue to attract an increasingly upmarket clientele.
If you want to say olé to Spain, here are four properties to kick-start your search...
Bonmont, Southern Catalonia
Prices range from £187,000 for a plot to £557,159 for a four-bedroom villa.
South of buzzy Barcelona is the little-known Costa Dorada, a 135-mile stretch of sandy beaches and fishing villages where the catch of the day is fresher than the sea breeze.
Bonmont is a low-level, attractive resort where buyers can choose from plots, two- and three-bedroom apartments and town houses or four-bedroom villas with private pools.
There is a 136-room Sheraton hotel and a scenic golf course, all set between the Llabeira Mountains and the sparkling Mediterranean Sea. Barcelona is 90 minutes away by car, but a new high-speed train link planned for 2008 will cut the journey to a swift 35 minutes.
Contact Savills Select Resorts (01202 765011)
Mallorca has been one of the success stories of the past few years, and the island has thrown off its kiss-me-quick reputation for an altogether classier image. You can still find well-priced properties there though, and this two-bedroom house 35 minutes from the airport is a good example. The Soller tunnel, finished in the mid-1990s, opened up the west of the island, and Fornalutz sits in an idyllic mountainous region of palm trees and lemon groves.
This recently renovated house was originally the mill house for the village – the millstone is still on display. There is a suntrap terrace providing views over a small stream towards the mountains, while inside clever use of stone and white paint makes for a traditional village holiday home with a modern twist.
Contact Engel & Völkers (00 34 971 63 30 63)
Nuevo Portil, Costa de la Luz, Western Spain
An easy hour from both Faro and Seville airports is the Costa de la Luz, Spain’ s longest coast, where umbrella pine trees and wide Atlantic beaches combine with the best of Mediterranean sunshine. The Spanish love this area, yet Brits have largely ignored it despite prices being 30 to 40 per cent less than those in the neighbouring Algarve.
“The western Costa de la Luz remains a hotspot despite the general uncertainty in other pockets of the Spanish property market,” says Miles Beacroft of local agent Titan Properties. “We have sold more properties in the first six months of 2007 than we did in the whole of 2006.”
This immaculate five-bedroom house overlooks the 16th tee of the popular Nuevo Portil golf course yet is only minutes from a 16-mile stretch of wide, sandy beach. The spacious house has an open-plan living and dining area, landscaped gardens and a private pool.
Call Titan Properties on 00 34 959 399 968
Experience loft-living in the architecturally sublime beachfront city of Barcelona with this recently renovated two-bedroom and two-bathroom apartment inbetween fashionable El Borne and established Eixample, home to Gaudi's Sagrada Familia.
Transformed from an industrial building, the apartment features high ceilings, large windows and wooden floors. There is parking nearby but with the Paseo de Gracia only five minutes away and good transport links close by, walking out of your front door will be the best way to experience Gaudi’s magnificent heritage.
Call Lucas Fox on 020 7871 0379
€2,100,000 (£1.42 million)
Blow the budget with this wonderful house in historic Pollensa, a part of northern Mallorca that is popular with British buyers. The town lies 30 minutes north of Palma on a newly completed stretch of motorway yet still retains its original fishing-village vibe. Residents can take an evening stroll around the marina at Puerto Pollensa and on to the Pine Walk or shop in the weekly market.
This four-bedroom country house in rural Pollensa has been fully renovated with the lightest of touches, and has attractive fireplaces, exposed wooden beams, terracotta tiles and plenty of sandstone. The pool sits in mature landscaped gardens with views up to the Tramuntana Mountains, and the villa comes with its own water supply.
Contact Engel & Völkers (00 34 971 53 20 50)