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The Spanish economy is under duress with high unemployment and significant debt. As national confidence falters, it is highly unlikely that the real estate market will recover through national consumer spending. However, it is thought that the market bottomed out sometime in 2009 and while property sales in Spain are only beginning to slowly crawl back up in the right direction, it is the fact that this is due to international interest that is arguably the best indicator that the worst may be over. House Sales Spain (http://www.housesalesspain.com/) looks at why overseas property purchasers are eying Spain and what this means for the market.

Figures released from the Ministry of Housing in Spain reports that transactions of property in Spain have slightly increased in Q1 of 2010 (96,155) compared to Q1 2009 (93,095). Property transactions in Q1 of 2006 were at significantly higher levels, however (222,720). This volume data shows that sales of Spanish properties were at a peak in 2006, declined steadily until they bottomed out in 2009 - that is if the increase continues throughout 2010. Other helpful data when considering the current state of the market in Spain is house prices themselves. TINSA is a company which carries out valuations in Spain; its house price index graph shows a steady increase in house prices until the end of 2007/the beginning of 2008, and since then a steady decline. TINSA believes that house prices in Spain are currently around 20% below their peak value. The difference between the value of a house in Spain and its asking price is still marked, however. There are still a good many people selling property in Spain that simply do not reflect the state of the market in their asking prices, however, and if they don't have to sell right now, they will simply try to 'sit it out' until the market recovers.

This leads us on to the international interest in property in Spain. The Spanish market, whether bear or bull, will always be based on 'lifestyle'. Those not in a hurry to sell a property in Spain have bought for lifestyle purposes and not as an investment; the lifestyle element remains no matter what the market conditions. Similarly, there will always be those wanting to buy Spanish property for lifestyle reasons (holiday home, retirement home, to start an expatriate life, etc.) which saves even a flailing market from utter stagnation. Some people are forced to leave the lifestyle behind, of course, and there are some being forced to massively discount their properties for a quick sale.

All of this has caught the eye of overseas property purchasers. A lifestyle market will always hold interest, and one offering bargains is hard to resist. While the domestic market cannot be counted on to help boost recovery, this international interest could hold the key to building on the modest increase in property transactions seen so far this year.

For more information on the Spanish property market, and to view the latest property listings, visit http://www.housesalesspain.com/.