Kevin Airey, 999 Today

Demand for properties in Spain continues to ride high, with investors buying new homes in popular locations with increasing frequency, according to new figures.

Research conducted by Assetz, a property investment company, reveals that Spain is leading the field of European holiday home markets.

Over the course of 2004 Spain saw more new houses built than Germany, France and Italy combined, continuing a trend that has resulted in over 20 per cent of all Spanish properties being built over the past decade.

Popular locations including Barcelona, Marbella and the Costa del Sol have seen a dramatic surge in house-building, meeting demand for modestly sized and priced properties in prime regions.

Last year 54,000 people moved to Spain, some 15 per cent of the total number of people (360,000) who moved abroad overall.

Larger cities continue to attract buyers in their numbers, with over two million people having moved into urban Spanish areas since 1998.

Having taken place so extensively over a relatively short space of time, concerns have arisen that the development of the Spanish property market may not be sustainable in the long-term. This is due not only to economic factors and a potential drop-off in demand, but also to more physical, practical reasons.

Greenpeace is warning that rapid house building could be have a huge adverse effect upon the Spanish coastline, and the environmental group stresses that more needs to be done to prevent the situation from worsening.

According to Greenpeace the construction of 768,000 new houses along the Spanish coast have been approved as well as 58 new golfing clubs and 77 sailing ports.

Furthermore, tens of thousands of illegal properties have been built without permission in popular areas, says Greenpeace.

"Local governments get most of their income from taxes and fees associated with building and construction, something which fuels the deterioration of the coastline," commented Greenpeace in a report, according to Reuters.

If pressure to curb excessive house-building continues, Spanish property development could begin to wane in the foreseeable future. The upshot of this could potentially be a boost in demand for existing properties, possibly leading to price rises in line with increasing values.

For buy to let investors, Assetz say that now might prove a good time to invest in a Spanish property before any building restrictions might come into effect, and a strong tourism industry in Spain signals a healthy level of demand for holiday lets into the future.