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Demand for residential dwellings in Spain has exploded in the last eight years, according to property experts.

The rise comes as increasing numbers of first-time domestic buyers in Spain are joined by seekers of second holiday homes in Iberia's coastal fringes and outlying islands.

In addition the ready availability of cheap budget flights has added to the attractions of a Spanish second home for foreigners, Crispin Longden, manager of the European Assets Trust, claims.

Fadesa, one of Spain's leading housing developers, is already benefiting from this trend, and is seen as a good investment opportunity in itself.

Pre-sales already booked by the company guarantee construction work for the next two years. In the three months since Fadesa was included in the focused portfolio of European Assets Trust, the stock price has risen by over 20 per cent

Mr Longden believes that the price could gain at least another 30 per cent. He explained: "The share price discount to the net asset value of Fadesa's developments and land bank is still almost 50 per cent compared to less than 20 per cent for the company's Spanish competitors."