However, Dell believes the current real estate crisis may address some of these issues. “The government wants to make more affordable housing available, especially to youngsters in a country where it is not unusual for children to still live with their parents at 30,” he says. “You have developers, especially those which are highly leveraged, looking to sell whole developments. The government could buy those as social housing provision.”

Valencia has also been putting its own house in order. Onerous “land grab” rules, introduced in 1994 and intended to prevent over-development, included a loophole that allowed developers to buy land or homes, whether the owners agreed or not, and redevelop. In some cases there was no compensation at all. Last year the EU told Valencia to change the law and, no doubt with one eye to what has happened in Marbella, the local government acquiesced.

Just as well. Sales of tourist properties in Málaga province have plunged to a historic low, with the total turnover on the sale of residential tourism property in the province €540 million last year, a drop of 50% compared with 2006, according to the Costa del Sol Association of Constructors and Promoters. President of the Association, José Prado, warned: “Without doubt the corruption in Marbella had a great deal to do with it, as it has generated a climate of distrust among purchasers. If even today they are still talking about knocking down homes which obtained their construction licence, have their mortgage, and are registered at the notary, how would anybody dare to buy a house?”

Valencia is revving up as a new Formula One venue with the European Grand Prix to be run around the city’s port in August. Valencia is paying €26m annually for the seven-year race deal, which is forecast to boost the local economy by €70m a year. There are also rumours that the America’s Cup could be returning to the city.

Graham Hunt, who runs real estate agency Valencia Property, believes the Spanish, like the British, are in danger of talking themselves into recession, but he remains bullish. “Prime prices are at €3,500 per square metre but that still compares well with Madrid and Barcelona,” he says. “The Beach, Carmen (centre) and Ruzafa areas are all popular at the moment and are still being gentrified. When the extension of the AVE [high-speed rail service] opens it will put Madrid under two hours away.”

However, he warns would-be buyers that Spanish banks have tightened up on mortgage lending. “At the moment buyers probably need 20-30% to put down as a deposit,” he adds. “As an investment long term, rentals won’t achieve a great yield but should be a reliable income source as so many Spanish people are having to rent.”

Dell echoes this: “If you want to move to Spain, then now is a good time to rent, do your research and then buy. Similarly I can see a good market for those with a longterm investment plan who target long-term rentals to cover mortgage payments. But for those targeting a property purely as an investment or holiday let then right now I wouldn’t be looking at Spain.”