Two of the euro zone’s “problem children” — Spain and Portugal — have succeeded in recent years in putting their economies back on an even keel after the global financial crisis and the euro zone sovereign debt debacle, with long-overdue austerity programmes helping to overhaul public finances and reduce debt and deficit burdens. Real estate investors from around the world have recognised the potential of the recovering Iberian economies and have been investing in properties there, principally in the two capital cities, Madrid and Lisbon, but also in the second cities of Barcelona and Porto, attracted by the new economic environment and the positive real estate fundamentals.

Both countries, though, held general elections in the last part of 2015 that saw sharp moves to the political left; in Portugal, the election resulted in a new government led by Socialist Party prime minister António Costa with support from far left–leaning parties, and in Spain coalition gov