Looking for a new place to call home? Spain is hoping to give you a little bit more than a welcome basket of baked goods if you decide to move there. In an attempt to reduce the country's bloated stock of unsold homes, the government is set to offer permanent residency to any foreigner, provided they buy a house or apartment worth more than $200,000.
The plan, unveiled by Trade Ministry secretary Jaime Garcia-Legaz on Monday and expected to be approved in the coming weeks, would be aimed principally at Chinese and Russian buyers. Spain has more than 700,000 unsold houses following the collapse of its real estate market in 2008, and demand from the recession-hit domestic market is stagnant.
Prime Minister Mariano Rajoy stressed Monday that the plan has not yet been finalized, but added that Spain "needs to sell these homes" and that getting them off the market could help revive the nation's devastated construction industry.
The plan to unload the unsold homes comes as thousands of houses have been repossessed by banks and their owners evicted because they cannot pay their mortgages. The government last week approved a decree under which evictions would be suspended for two years in specific cases of extreme need.
The country's residency offer would beat others in bailed-out countries such as Ireland and Portugal, where residency papers are offered to foreigners buying houses worth more than $510,000 and $638,000, respectively. However, Latvia on the Baltic coast offers a cheaper deal, with property buyers eligible to receive residency permits if they purchase real estate in the capital Riga worth $178,000 or $89,000 in the countryside.
Spain is in the midst of a double-dip recession with 25 percent unemployment, though Rajoy said he believes Spain has managed to avoid a financial implosion and will start growing again in late 2013 and in 2014.
"I'm convinced that the worst is over," Rajoy told reporters after meeting with Brazilian President Dilma Rousseff.
The stricken state of the country's real estate market was highlighted Monday by figures from the Bank of Spain which showed that the level of bad debt in the country's banks had risen to a record 10.7 percent of their loan total in September.
The bank said the amount totaled 182 billion euros (about $233 billion), up from 179 billion euros (about $233 billion) in August -- the 15th monthly increase in a row.
The 16 other countries that use the euro have agreed to lend Spain up to 100 billion of them to help support the country's banks weighed down by these bad loans and investments. On top of the bank loan, Spain has been under pressure to apply for more outside financial aid to help it manage its debt and deficit. The European Central Bank has insisted on the move before it will make good on its pledge to buy the bonds of certain troubled countries to help lower their borrowing costs.
Spain says it is waiting to know all the conditions that might come attached to the rescue package before making a decision.
Cities Where Homes Sell the Fastest
Spain Offers Residency to Foreigners Who Buy a Home Worth At Least $200,000
Homes are selling faster in the majority of U.S. markets than they were a year ago, according to data recently released by Realtor.com. Ten areas in particular are sweet spots if you're selling a home.
The metropolitan areas on this list of the cities where homes sell the fastest tend to be in states that have been hardest hit by the economic downturn. Five of the metropolitan areas are in California.
Click through the gallery to find out where homesellers have the best shot at getting their house sold -- and fast.
Average number of days homes spend on market: 48 Median home price: $185,000 (73rd highest) Population: 4,192,887 (20th highest) Unemployment: 7.72% (65th highest)
The entire metropolitan area of Phoenix-Mesa, which has a population of more than 4 million, had 13,912 homes listed on the market in June -- the 20th highest of all the metropolitan areas surveyed. This is a drop of almost 40 percent since the same time last year. Speedy home-selling may be boosting the housing market in the Phoenix area.
Average number of days on market: 47 Median home price: $99,000 (the lowest) Population: 4,296,250 (18th highest) Unemployment: 11.21% (ninth highest)
Unlike many of the metropolitan areas on the list with high home values, in Detroit, there are many bargains to go around for homebuyers. Of the 146 regions surveyed by Realtor.com, only Detroit had a median home value below $100,000 last month. Housing prices in the area did not manage to crack through the six-figure ceiling despite increasing 10 percent from last year, a much higher rate than the national average of 2.68 percent increase. This has sparked much interest among buyers.
Average number of days on market: 45 Median home price: $549,000 (third highest) Population: 1,836,911 (39th highest) Unemployment: 8.89% (34th highest)
California was hit hard during the housing downturn, and San Jose has been no exception. From the first quarter of 2007 to the fourth quarter of 2011, home prices plunged 32.9 percent. Nevertheless, the median price of one of the 3,621 houses listed is still an impressive $549,000, the second highest of all home prices on the list and the third highest of all metropolitan areas surveyed. Buyers should not dawdle either.
Average number of days on market: 45 Median home price: $725,000 (the highest) Population: 4,335,391 (17th highest) Unemployment: 7.52% (68th lowest)
While Detroit’s median home listing price is less than $100,000, the median home price of $725,000 in the San Francisco area is the highest measured in the Realtor.com report. Yet, despite the high prices of homes, there isn't too much idle time on the market, as the average home is sold in 45 days.
Average number of days on market: 45 Median home price: $350,000 (17th highest) Population: 3,439,809 (21st highest) Unemployment: 7.40% (56th lowest)
The Seattle metropolitan area has a population of more than 3.4 million people, yet only 6,486 homes available for sale. With such conditions, it is not surprising that homes will get snatched up pretty quickly. Houses on average sit just 45 days on the market, which is down nearly 34% since last year.
Average number of days on market: 44 Median home price: $149,500 (23rd lowest) Population: 839,631 (60th lowest) Unemployment: 14.14% (fourth highest)
Bakersfield joins many other California cities in selling homes fast, but houses in the area are not likely to have San Francisco-like prices. The median home price of $149,500 is the lowest on this list, except for Detroit, and only a little more than a fifth of the median price of a San Francisco house.
Average number of days on market: 43 Median home price: $174,900 (58th lowest) Population: 930,450 (62nd highest) Unemployment: 15.54% (second highest)
Fresno has many similarities to Bakersfield. The median home price of $174,900 recorded in June is far lower than other California cities such as San Francisco and San Jose, but it is up 10 percent from a year earlier. Similar to Bakersfield, the 2,237 houses on the market are nearly half (49.1 percent) the number that were available last year.
Average number of days on market: 43 Median home price: $289,500 (23rd highest) Population: 380,821 (20th lowest) Unemployment: 6.13% (22nd lowest)
Prospective homebuyers in Anchorage really do not have the option of being choosy. There are only 1,120 houses on the market, a decline of about 29 percent from the previous year. This is the fourth-smallest number of home listings in all metropolitan areas surveyed.
Average number of days on market: 33 Median home price: $269,000 (27th highest) Population: 2,543,482 (27th highest) Unemployment: 7.51% (67th lowest)
The 33 days to sell a house in the Denver area is actually up by 10 percent, one of the very few metro areas to see an increase in the time it takes to sell a home. Denver was not as hard hit by the housing bust as many other metropolitan areas. Home prices from their peak in the first quarter of 2006 to the fourth quarter of 2011 dropped just 11.1 percent, well below the national average of 34.2 percent.