An estimated 50,000 Irish owners of Spanish holiday homes were advised yesterday not to panic amid fears that the country's real estate boom is imploding.

But buyers were cautioned to approach the Spanish property market as a holiday home destination rather than the source of a get-rich-quick investment, following sharp falls in the value of Spanish property stocks on Tuesday.

Elaine Higgins, managing director of financial advisers IFG Spain, said rising interest rates combined with an oversupply of properties in some areas was making Spain a less attractive place for investors. It can take up to two years to sell a property in the current market.

"You should only buy in Spain if you want a holiday home there that you want to visit.

Buying in Spain because you want to make a quick turnaround of profit is not a good idea," Ms Higgins said.

Buyers in Spain take an "immediate hit" of 10-13 per cent of the purchase price in legal costs, taxes and stamp duty.

People who have paid a deposit on a Spanish property but have not yet completed the transaction are the most vulnerable to falls in property prices, she warned.

The Spanish property market is still growing, rising at an annual rate of 7 per cent in the first quarter.

However, prices in many parts of Spain are falling.