By Dale Fuchs International Herald Tribune Published: July 21, 2006

Spain The signs at the Málaga airport say it all. “England is closer than you think,” reads an airline banner advertising one-way air fares of €55. “Come and see us, we speak YOUR language,” urges the billboard on a real estate agency kiosk planted in front of the baggage carrousel.

While passengers in shorts and flip-flops wheel away their suitcases, a smiling woman hands out glossy brochures of white villas overlooking the ninth hole. Outside, rental cars speed toward beaches lined with white condo towers, British-style pubs and spas specializing in plastic surgery. Or they head for the arid mountains, where ubiquitous red cranes announce the coming of thousands of vacation homes.

“I was just saying to the girls that if I could buy a house out here, they could stay with me for the summer,” said Wendy Berry, 60, a youth advocacy worker from London, beaming at her two suntanned granddaughters as she waited to board an EasyJet flight back to Britain.

Many of her fellow passengers were not just visiting, however. They are Europe’s version of Florida “snowbirds,” returning north from their seasonal villas in Fuengirola, Mijas and other towns on the crowded Málaga coast.

About two million residents of the European Union are expected to retire to Southern Europe in the next 10 years, said Gilberto Jordan, a Portuguese developer and member of the Resort Development committee of the Urban Land Institute, a nonprofit research organization.

If past patterns are any guide, many of them will be retiring to Spain. With its seductive combination of warm climate, good hospitals for hip replacements, an abundance of housing and clever promotion, the country is leading other sunny European destinations, like Portugal, Italy and Greece, in the race to capture Europe’s aging baby boomers, who are traveling more – and spending more on themselves – than their parents did.

About 600,000 EU citizens are officially listed as permanent Spanish residents – one of the largest intra-EU migrations on record. Roughly 1.7 million – mostly Germans and British – own a second home in Spain, according to Live in Spain, an association of Spanish residential developers. Many of them are not seeking return on investment, but a gentler life once they retire: better weather, cheaper groceries and shorter waits for medical procedures than at home.

“There are masses of well-off people spending their kids’ money now,” Jordan said. “It’s cheaper for them to come to the south of Europe than to stay at home freezing.”

As they warm up, the Spanish coastline is looking increasingly like Miami and other seaside boom towns, the result of a construction frenzy over the past few years. An average of 600,000 new homes have been built each year since 2003 – triple the rate for the rest of Europe, said Oliver Gilmartin, an economist with the Royal Institute of Chartered Surveyors in London. Developers expect to sell another 145,000 vacation homes a year until 2010, with investment reaching €45 billion.

Most of the new properties sit along tourist-packed regions such as Valencia, Cádiz, the Costa Brava and the Costa del Sol. These leisure idylls are aggressively marketed to Northern Europeans by companies that, among other gimmicks, hire English soccer teams to promote their developments and offer to whisk prospective buyers away for sangria-drenched flamenco nights.

Prices match fixed-income and jet- set budgets. In once-forgotten regions like Murcia, a two-bedroom apartment can be bought for as little as €50,000, or $63,400. In Marbella, near the yacht- lined Puerto BanÁºs, a three-bedroom villa with a fireplace, gardens and a jacuzzi was recently advertised for €1.3 million.

The northern influx has been so great that many coastal towns have more foreigners than Spaniards. That is the case in Teulada (population 14,000), in the Alicante region: The deputy major is British, the finance officer is French, another council member is German and a fourth is Dutch.

But after building at fever pitch over the past 10 years, the beach party seems to be winding down. Property prices on the Spanish coast are losing momentum, growing now by only 5 percent to 10 percent a year, compared with 17 percent from 2002 to 2004, said Muriel Muirden, an analyst for Economic Research Associates in London. Interest rates, which two years ago were at historic lows, are higher now, and banks – which helped fuel the housing boom by granting mortgages up to 100 percent – are growing worried about defaults. Property resales are slower as short-term investors turn to emerging destinations like Morocco, Turkey or Croatia, she said.

In what could be described as a better-late-than-never move, environmental groups are putting pressure on the government to limit construction in the arid Spanish south, where water is scarce. Regional governments are also beginning to draft tougher rezoning laws to preserve dwindling green space, much like what Croatia has done.

Spaniards themselves have developed a love-hate relationship with the frenzied development. Construction means jobs in a country of traditionally high unemployment and it fuels economic growth, which is higher than the EU average. New housing alone now accounts for more than 8 percent of Spain’s gross domestic product, according to Juan Carlos Martínez, an economist at the Instituto de Empresa business school in Madrid.

Spaniards themselves are also eager home buyers, with a conservative investment culture that favors bricks and mortar, often taking the form of a summer cottage by the sea. But many fear the glut of cranes and scaffolding will not only spoil the view but also scare away the 53 million annual tourists on which the economy also depends.

“The thick belt of cement that chokes the coastline is a toxin for tourism, the nation’s main source of income,” warned an editorial in El País this month after a Greenpeace report said 1.5 million new homes had been approved for construction this year alone. “Between us all, let’s not kill the goose that laid the golden egg.”

In March, crime in the glitzy resort town of Marbella reached “Miami Vice” proportions when the police arrested the mayor, the urban planning adviser and other city officials in connection with an elaborate scheme for generating millions of euros in kickbacks in exchange for building permits or rezoning decisions. Another 30 people, including several leading Spanish developers and the former police chief, were arrested in early July. About 30,000 homes are now in legal limbo. Many have already been built – and occupied, largely by foreigners – with permission from the now-dissolved town council while a regional plan to curb development was in the works.

While the Marbella scandal may make new buyers more selective, it will probably not alter the long-term pattern of migration from north to south – or the appeal of Spain, Muirden said.

Developers have driven the market to some extent, but low-cost airlines have helped, blanketing the country and spurring property values wherever they land. Spain’s popularity as a tourist destination – it ranks second in the world, after France – has meant a steady stream of potential buyers already familiar with the territory.

And unlike emerging, and cheaper, resort destinations in Turkey or Morocco, Spain is anchored within what Muirden calls the “comfort zone” of the EU, with its shared legal and economic framework. So many EU citizens are tapping into the Spanish public health care system that the central government has complained to Brussels, seeking more reimbursement.

The mushrooming of identical pastel villas has been accompanied by another Sun Belt staple: the golf course. The number of manicured greens in this drought-prone countryside has roughly tripled from 89 in 1990 to 260 in 2003, and another 300 courses are on the drawing board with an estimated investment of €400 million, according to Francisco Aymerich, president of Aymerich Golf Management, a consultant.

The demand for manicured greens does not come from locals: Less than 1 percent of the Spanish population plays golf, compared with 2.5 percent for all of Europe, Aymerich said. The courses are simply “lifestyle features,” as he puts it, that augment property values by 20 percent to 25 percent.

Between sand traps and the orange- tiled roofs of the vacation villas, a new breed of development is also cropping up, still rare in Europe: the American- style retirement community for “active seniors.” They feature the usual amenities, like golf and tennis, with a twist: They cater to common retiree fears like crime, illness and isolation with such features as social activities, 24- hour security, emergency buttons in the homes and on-site clinics.

“I feel safe when I see all the guards, and the idea of a nurse living here gives me a very safe feeling,” said Lily Kranenburg, a 73- year-old retiree from the Netherlands sunning herself at the pool at Sol Andalusí, which opened last year in the hills outside Málaga.

About 10 companies have similar projects in the works. Vitania, based in Madrid, plans to build 17 such communities in southern coastal provinces with more than 17,000 units, marketed mainly to North Europeans and Russians, in the next seven years, a company representative, Alfredo Heraso, said. The first complex will include a shopping mall.

And in another pattern that is likely to continue, early waves of northern migrants are drawing both the older and younger generations.

“We came to Spain for vacation and we never went back,” said Ruth Biel, a 54-year-old artist from Denmark who moved to Spain in 1992. A few months ago, she brought over her parents, aged 76 and 80. Now they all live at Sol Andalusí, an “active senior” retirement community.

“Excuse me, I have to get my mother’s test results,” she said, walking into the doctor’s office, down a hall from the spa.

MÁLAGA, Spain The signs at the Málaga airport say it all. “England is closer than you think,” reads an airline banner advertising one-way air fares of €55. “Come and see us, we speak YOUR language,” urges the billboard on a real estate agency kiosk planted in front of the baggage carrousel.

While passengers in shorts and flip-flops wheel away their suitcases, a smiling woman hands out glossy brochures of white villas overlooking the ninth hole. Outside, rental cars speed toward beaches lined with white condo towers, British-style pubs and spas specializing in plastic surgery. Or they head for the arid mountains, where ubiquitous red cranes announce the coming of thousands of vacation homes.

“I was just saying to the girls that if I could buy a house out here, they could stay with me for the summer,” said Wendy Berry, 60, a youth advocacy worker from London, beaming at her two suntanned granddaughters as she waited to board an EasyJet flight back to Britain.

Many of her fellow passengers were not just visiting, however. They are Europe’s version of Florida “snowbirds,” returning north from their seasonal villas in Fuengirola, Mijas and other towns on the crowded Málaga coast.

About two million residents of the European Union are expected to retire to Southern Europe in the next 10 years, said Gilberto Jordan, a Portuguese developer and member of the Resort Development committee of the Urban Land Institute, a nonprofit research organization.

If past patterns are any guide, many of them will be retiring to Spain. With its seductive combination of warm climate, good hospitals for hip replacements, an abundance of housing and clever promotion, the country is leading other sunny European destinations, like Portugal, Italy and Greece, in the race to capture Europe’s aging baby boomers, who are traveling more – and spending more on themselves – than their parents did.

About 600,000 EU citizens are officially listed as permanent Spanish residents – one of the largest intra-EU migrations on record. Roughly 1.7 million – mostly Germans and British – own a second home in Spain, according to Live in Spain, an association of Spanish residential developers. Many of them are not seeking return on investment, but a gentler life once they retire: better weather, cheaper groceries and shorter waits for medical procedures than at home.

“There are masses of well-off people spending their kids’ money now,” Jordan said. “It’s cheaper for them to come to the south of Europe than to stay at home freezing.”

As they warm up, the Spanish coastline is looking increasingly like Miami and other seaside boom towns, the result of a construction frenzy over the past few years. An average of 600,000 new homes have been built each year since 2003 – triple the rate for the rest of Europe, said Oliver Gilmartin, an economist with the Royal Institute of Chartered Surveyors in London. Developers expect to sell another 145,000 vacation homes a year until 2010, with investment reaching €45 billion.

Most of the new properties sit along tourist-packed regions such as Valencia, Cádiz, the Costa Brava and the Costa del Sol. These leisure idylls are aggressively marketed to Northern Europeans by companies that, among other gimmicks, hire English soccer teams to promote their developments and offer to whisk prospective buyers away for sangria-drenched flamenco nights.

Prices match fixed-income and jet- set budgets. In once-forgotten regions like Murcia, a two-bedroom apartment can be bought for as little as €50,000, or $63,400. In Marbella, near the yacht- lined Puerto BanÁºs, a three-bedroom villa with a fireplace, gardens and a jacuzzi was recently advertised for €1.3 million.

The northern influx has been so great that many coastal towns have more foreigners than Spaniards. That is the case in Teulada (population 14,000), in the Alicante region: The deputy major is British, the finance officer is French, another council member is German and a fourth is Dutch.

But after building at fever pitch over the past 10 years, the beach party seems to be winding down. Property prices on the Spanish coast are losing momentum, growing now by only 5 percent to 10 percent a year, compared with 17 percent from 2002 to 2004, said Muriel Muirden, an analyst for Economic Research Associates in London. Interest rates, which two years ago were at historic lows, are higher now, and banks – which helped fuel the housing boom by granting mortgages up to 100 percent – are growing worried about defaults. Property resales are slower as short-term investors turn to emerging destinations like Morocco, Turkey or Croatia, she said.

In what could be described as a better-late-than-never move, environmental groups are putting pressure on the government to limit construction in the arid Spanish south, where water is scarce. Regional governments are also beginning to draft tougher rezoning laws to preserve dwindling green space, much like what Croatia has done.

Spaniards themselves have developed a love-hate relationship with the frenzied development. Construction means jobs in a country of traditionally high unemployment and it fuels economic growth, which is higher than the EU average. New housing alone now accounts for more than 8 percent of Spain’s gross domestic product, according to Juan Carlos Martínez, an economist at the Instituto de Empresa business school in Madrid.

Spaniards themselves are also eager home buyers, with a conservative investment culture that favors bricks and mortar, often taking the form of a summer cottage by the sea. But many fear the glut of cranes and scaffolding will not only spoil the view but also scare away the 53 million annual tourists on which the economy also depends.

“The thick belt of cement that chokes the coastline is a toxin for tourism, the nation’s main source of income,” warned an editorial in El País this month after a Greenpeace report said 1.5 million new homes had been approved for construction this year alone. “Between us all, let’s not kill the goose that laid the golden egg.”

In March, crime in the glitzy resort town of Marbella reached “Miami Vice” proportions when the police arrested the mayor, the urban planning adviser and other city officials in connection with an elaborate scheme for generating millions of euros in kickbacks in exchange for building permits or rezoning decisions. Another 30 people, including several leading Spanish developers and the former police chief, were arrested in early July. About 30,000 homes are now in legal limbo. Many have already been built – and occupied, largely by foreigners – with permission from the now-dissolved town council while a regional plan to curb development was in the works.

While the Marbella scandal may make new buyers more selective, it will probably not alter the long-term pattern of migration from north to south – or the appeal of Spain, Muirden said.

Developers have driven the market to some extent, but low-cost airlines have helped, blanketing the country and spurring property values wherever they land. Spain’s popularity as a tourist destination – it ranks second in the world, after France – has meant a steady stream of potential buyers already familiar with the territory.

And unlike emerging, and cheaper, resort destinations in Turkey or Morocco, Spain is anchored within what Muirden calls the “comfort zone” of the EU, with its shared legal and economic framework. So many EU citizens are tapping into the Spanish public health care system that the central government has complained to Brussels, seeking more reimbursement.

The mushrooming of identical pastel villas has been accompanied by another Sun Belt staple: the golf course. The number of manicured greens in this drought-prone countryside has roughly tripled from 89 in 1990 to 260 in 2003, and another 300 courses are on the drawing board with an estimated investment of €400 million, according to Francisco Aymerich, president of Aymerich Golf Management, a consultant.

The demand for manicured greens does not come from locals: Less than 1 percent of the Spanish population plays golf, compared with 2.5 percent for all of Europe, Aymerich said. The courses are simply “lifestyle features,” as he puts it, that augment property values by 20 percent to 25 percent.

Between sand traps and the orange- tiled roofs of the vacation villas, a new breed of development is also cropping up, still rare in Europe: the American- style retirement community for “active seniors.” They feature the usual amenities, like golf and tennis, with a twist: They cater to common retiree fears like crime, illness and isolation with such features as social activities, 24- hour security, emergency buttons in the homes and on-site clinics.

“I feel safe when I see all the guards, and the idea of a nurse living here gives me a very safe feeling,” said Lily Kranenburg, a 73- year-old retiree from the Netherlands sunning herself at the pool at Sol Andalusí, which opened last year in the hills outside Málaga.

About 10 companies have similar projects in the works. Vitania, based in Madrid, plans to build 17 such communities in southern coastal provinces with more than 17,000 units, marketed mainly to North Europeans and Russians, in the next seven years, a company representative, Alfredo Heraso, said. The first complex will include a shopping mall.

And in another pattern that is likely to continue, early waves of northern migrants are drawing both the older and younger generations.

“We came to Spain for vacation and we never went back,” said Ruth Biel, a 54-year-old artist from Denmark who moved to Spain in 1992. A few months ago, she brought over her parents, aged 76 and 80. Now they all live at Sol Andalusí, an “active senior” retirement community.

“Excuse me, I have to get my mother’s test results,” she said, walking into the doctor’s office, down a hall from the spa.

Part of the This Is Spain Network. Operated by Costa Insider SL.