Mi Casa Es Su Casa

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Like thousands of other Europeans from chillier climes, Ray and Anne Harvey have seen their relationship with Spain ripen since they first came to visit in 1975. "Back then we did the full tourist thing, including a day trip to Morocco; we caught food poisoning and went home laden with straw donkeys, enormous sombreros and a couple of Moroccan vases," says Ray, 61. "I blush now when I think what we must have looked like."

But they liked it, and they kept coming back. In the late 1980s they bought a holiday apartment for around €30,000 in [an error occurred while processing this directive] Torremolinos on the Costa del Sol, which was fine while their two daughters were young, but then their standards rose. "The holiday complex was rather noisy in summer, with disco music and children running around, and the apartment was too small for a permanent home," says Anne, 60. Then in 2002, when there was a lull in their luxury-export business back in England, they decided to retire early, and bought a three-bedroom apartment in a gated community with a swimming pool and a sea view. "As soon as I saw this building I fell in love with it. It has the 'it' value," says Anne.

That process of constant upgrading has helped make Spain rich — and kept cranes along the Mediterranean coast operating at sometimes reckless speed. Now the trade is slowing down, and there are warning signs of decay. An alleged kickback scheme has led to high-level arrests this year in Marbella, Spain's jet-set and botox capital. Authorities in the Valencia region have been challenged by foreign owners and the European Commission over a 12-year-old law that allows communities to reclassify already developed land and force owners to sell. Environmentalists have been deploring the overdevelopment of the Spanish Costas for decades, but this year for the first time hoteliers have suggested a limit on new construction of holiday and second homes, which they say threatens their business.

That would probably suit the Harveys, as well as others now sufficiently settled in, who prefer a sense of community over the flashy tourist trade. "What's changing in the last few years here is quality," says Begoña Iturriaga, head of investment for IREA, Spain's biggest real estate consultancy. "Ten years ago you could sell anything." As competition matures in Morocco, Turkey and Croatia, Spain's smart money is appealing to upscale sunseekers like the Harveys. They walk to the gym every morning and, although they have a car, they can take a bus almost anywhere they want to go locally or catch a 20-minute train to Málaga. Their compound is a European microcosm, and they take Spanish classes — subsidized by the local government — with Scandinavians, Chinese, Russians, Poles, Austrians and Americans. The Harveys qualify for Spanish social security and are reassured by the presence of excellent hospitals. "Here, even the children and teenagers are polite," says Anne. "You wouldn't find that in England."