The second home of Europe

Spain's position as Europe's favourite retirement destination has seen the concrete jungle grow and the population age.

by Paul Mungo, World Business
Last Updated: 23 Jul 2013

The Costa Brava was the first coastline in Spain colonised by the northern hordes. In the 1950s, at the advent of the cheap package holiday, coach-loads of pale-faced Swedes, Germans, Dutch and British would be decanted on to the beaches after 18-hour bus journeys from Stockholm, Hamburg, Amsterdam and London. In the days before jet travel, the Costa Brava, in the northeast corner of Spain near the French border, was the closest bit of Iberia to the northern capitals. It was hot, the beaches were sandy and the wine was cheap. For a brief time, the Costa Brava exemplified the Spanish holiday.

The development of the passenger jet airliner brought the southern coast of Spain, the Costa del Sol, to within two and a half hours' flying time of northern Europe. The south was even hotter, the beaches were just as sandy (assured by spreading truckloads of the stuff over the grey, volcanic sediment that characterised the region's coastline) and the wine was still cheap. By the end of the 1960s, the focus of Spanish tourism had shifted to the Costa del Sol.

But the north wasn't quite forgotten. In a pattern of development that has been mimicked all along the Spanish coast, many of those pioneering tourists from the 1950s and early 1960s became accustomed to the sun, the sand and, indeed, the cheap wine, and began buying property. Lines of white villas with red-tiled roofs began marching up the hills overlooking previously secluded little bays or fishing villages. Apartment blocks offering two rooms and a balcony overlooking the beach (or in far too many cases, overlooking the back of the apartment block in front) were hastily thrown up. Florida-style developments of 'canal-side' homes with private moorings were sold to a newly affluent European middle class with sufficient disposable income to sink into a 12-foot motor cruiser. Most of these were second homes, used principally in the summer, but a large number were bought by northern Europeans with the intention of retiring to the sun.

Roses is the first substantial coastal community south of the French border on the Costa Brava. (It was known as 'Rosas' in the 1950s and 1960s when Castilian Spanish reigned; Roses is the Catalan spelling.) Because of its location, and because it stands at the head of the sweeping Bay of Roses on a long beach, with a couple of sleepy, picturesque coves to the north, it was one of the first towns on the Costa Brava to be transformed by tourism. It has the highest number of second homes in Spain, double the national average.

Primarily a fishing port, in the late 1950s it possessed just three tourist hotels. There are now dozens, along with a multitude of camping grounds, hostels and pensions. Forty years ago, entertainment consisted of a couple of bars and a pinball machine. Now there are clubs, go-kart tracks and mini-golf courses. And while back then Rosas, as it was, was a definable 'place' of a few streets leading back from the port, it is now an agglomeration surrounded by developments that straggle up to the top of the hills behind the town and for miles along the bay. Even the once-deserted, picturesque coves are connected to Roses by swathes of villas clinging to the rocks above the sea.

Approaching the town now from France, travellers first pass the two massive developments of Empuriabrava and Santa Margarida. Thriving communities in their own right, they are both part of Roses and distinct from it.

They have their own hotels and beaches, their own shops, supermarkets, bars and clubs. Built in the late 1960s and early 1970s, they are modelled on the Floridian 'canal-side' developments. Artificial waterways back on to the villas and apartments, offering everyone a place to park their boat.

Many of the flats and houses in the two developments are owned by Spaniards (Barcelona is only two or three hours away). The rest are the properties of northerners - French, German, Dutch and British, among others. The bustling centres of both Empuriabrava and Santa Margarida attest to the cosmopolitan population of the towns: there are French patisseries and German bakeries, a Creperie Bretonne, a tearoom, French traiteurs and German butchers, an Artz, a medicin ... They are in Spain, perhaps, but not necessarily part of it.

In the 1960s, when northern Europeans began tentatively buying retirement homes in Roses, they were pioneers. Then, the permanent foreign community consisted of a handful of Dutch, Belgian, German and British expats, who met regularly in a cafe near the port. (Among them was my grandmother, who happily traded the damp, grey skies of Newcastle in north-east England for the sunshine of the Spanish coast.) Then they were a few dozen; now they're a multitude.

In the past few years, Spain has turned into the retirement centre of Europe. About 600,000 EU citizens are registered as Spanish residents, the result of one of the biggest intra-union migrations ever recorded.

In the next 10 years, another two million residents of the EU are expected to retire to southern Europe. Most of them will be heading to Spain, if past patterns are any guide. To accommodate them, Spanish developers have been indulging in a frenzy of construction. Since 2003, an average of 600,000 new homes has been built each year, the bulk of them along the already over-built coastlines of the Costa del Sol and the Costa Brava, or near the tourist-packed regions of Valencia and Cadiz.

The northern migration has been so great that the Spanish are already outnumbered by foreigners in some communities. In the Alicante region, the town of Teulada, with a population of 14,000, has a British deputy mayor and a French finance officer, as well as German and Dutch council members.

Despite a recent slowdown in the rise in property prices - down to about 5%-10% a year compared with 17% between 2002 and 2004, according to Economic Research Associates - the pace of building has not cooled. Developers reportedly expect to sell another 145,000 holiday homes each year until 2010, adding almost three-quarters of a million new properties to the market. A Greenpeace report published in July on the state of the Spanish coast said 1.5 million new homes had been approved for construction in 2006 alone. Amazingly, a scattering of cranes announces the sites of new building works along the coast outside Roses, even though there hardly appears to be an inch of land not already concreted over.

For Spain, a country with traditionally high unemployment, this spate of construction fuels the economy and creates jobs. According to Madrid business school Instituto de Empresa, new housing now accounts for more than 8% of the country's gross domestic product. Nonetheless, there are worries that over-development could prove counter-productive.

Greenpeace's report referred to a 'deep ulcer' of concrete along the country's 8,000km of coastline, and warned of areas where three-quarters of the shoreline was fully developed, effectively leaving no coast at all. El Pais, in an editorial in July, said: "The thick belt of cement that chokes the coastline is a toxin for tourism, the main source of income.

Between us all, let's not kill the goose that laid the golden egg." It may be too late, but environmental groups have started putting pressure on the government to limit development, particularly in the arid south.

Regional governments too have started drafting tougher zoning laws to protect what remains of the coastline. It is unlikely such moves will deter the developers for very long.

About 30km inland from Roses, on the other side of the north-south A7 motorway, is the newer face of Spanish development. The Torremirona Golf & Spa Resort is a manicured, well-planned estate of two and three-storey detached and semi-detached villas and townhouses, built into the low hills of the countryside. Painted in various hues of brownish pastel, they betray a common architectural heritage, a sort of fusion of contemporary Florida and modern Spanish. Most have identical green shutters and fences, though some iconoclasts have opted for rust red.

The villas straggle around the perimeter of the Torremirona golf course.

According to a spokesman for the development, there are 200-300 homes on the estate, and most were built about seven to eight years ago - roughly when the boom in that Florida staple, the golf resort, gripped Spanish developers. In 1990, there were just 89 golf courses in the whole of Spain.

By 2003, the number had almost tripled to 260. A further 300 courses are currently on the drawing board in this drought-prone country, entailing an investment estimated at EUR400 million. It's not quite clear who will be teeing off on all these new courses. Less than 1% of the Spanish population play the game, which suggests the golfers won't be Spaniards. On the other hand, the figures for Europeans as a whole aren't much higher - just 2.5% of them play golf. According to Francisco Aymerich, a consultant with Aymerich Golf Management, the courses are "lifestyle features" that enhance the value of the properties around them by as much as 25%.

In other words, golf courses are simply the successors to the canals, which so enthused local developers in the 1960s and 1970s. A mooring at the end of the garden was as much a property-enhancing feature then as overlooking the 18th hole is now. More broadly, these lifestyle features are part of the social changes wrought by the increased prosperity of the EU. With per capita GDP in Western Europe rising by 50% over the past decade, the notion of a second home - or retiring in the sun - has been democratised. Now, a taxi driver in Berlin, an Irish teacher or a Scandinavian middle manager, is as likely to own property in Europe's southern 'sunshine states' - stretching from the Greek islands to the Algarve in Portugal - as the well-to-do. Lifestyle features are part of the social aspiration exemplified by second homes.

Other social, political and technological changes have contributed to the boom. The Schengen Agreement of 1985, which relaxed intra-EU immigration and border controls, made it easier to move within Europe and led to a feeling of 'European citizenship'. In addition, the EU has allocated billions of euros in 'structural funds' - money to improve infrastructure in member states - so that countries such as Spain could enhance their roads, railways and airports. Mobile phones and the internet make staying in touch easier and, of course, the rise of budget airlines has made the getting there and the getting back that much cheaper and more convenient.

No-frills carriers, such as easyJet, Ryanair and Air Berlin, have opened up new routes to Spain, both fuelling and feeding off the second home and retirement markets. The country has now become a major battleground for the budget carriers. This summer, easyJet announced it was opening its first base in Spain, at Madrid's Barajas airport. It is following the lead of Ryanair, which has a fast-growing base at Girona, about 100km north of Barcelona.

It is Girona airport that now decants pale northerners on to the beaches of the Costa Brava, replacing the coaches of the 1950s. But yet another transport system is being built: within sight of the A7 motorway are the viaducts, bridges, tunnels and roadbeds of the new TGV high-speed train that will speed thousands of travellers and immigrants from Paris and points north within a few hours. It will open in February 2009. Whether the region can cope with the expected influx is another matter.

Spain has one of the fastest ageing populations in the world. It's axiomatic that the older a population gets, the more likely it is to need medical services. And as the demand for health services increases, so does the cost. Already, the Spanish government has asked for more reimbursement from Brussels to offset the expense of caring for EU citizens tapping into the Spanish healthcare system.

But the problem doesn't end there. "Most retire out here when they are fit and active, and don't think beyond finding the best restaurants and the nearest golf course," Angela Keay, president of charity Age Concern Espana, said recently: "Too late they discover the Spanish have few care homes and little social services or day-care for the elderly."

As Spain takes its place as the Florida of Europe, American-style solutions to the problems of ageing have become more common. The newest developments in Spain are Florida-style 'retirement communities' for the physically active elderly. Their selling point is their appeal to common retiree fears such as illness, crime and social isolation. Though they will often offer sporting activities including tennis and golf, they emphasise features such as social activities, emergency buttons in homes, 24-hour security and on-site clinics. Though there are few such developments at present, 10 companies are reported to be planning retirement communities.

Vitania, a Madrid-based developer, has plans to build 17 villages along the southern coastline in the next seven years, creating more than 17,000 housing units, which will be marketed primarily to north Europeans and Russians. The company is currently building a complex it calls Vitania Residencial, just outside Mijas on the Costa del Sol. Opening at the end of the year, Vitania describes it as "a model for the new style of social and family life in the 21st century". It will include shops and restaurants, 338 houses and 62 apartments with 'assisted living services', and a 120-bed health centre offering medical services 24 hours a day. It will also, inevitably, have a golf course.

That this sort of complex could become a template for the 21st century seems true enough. It seems natural that developers will scramble to build the sort of retirement communities that retirees will demand in the places they want to live. If past experience is anything to go by, that place will be Spain. The problems this could create - over-development, pressures on health systems - will be problems that Europe will have to learn to live with. Owning a home in the sun is no longer a prerogative of the rich - it's a way of life.

Number of EU residents registered in Spain (2005): 600,000
Number of golf courses (2003): 260
Number of second homes (2005): 3.3m
Number of pleasure ports (2003): 321
Number of new foreign property owners each year: 135,000
British population of provinces of Alicante and Malaga: 50%
Number of second homes built in 2005: 450,000
Total EU foreign investment in real estate (2003): EUR7.2m

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