The residency offer sounds like a very good deal, but 160K Euro will
not get you a mansion in a desirable beachfront suburb as the article suggests. It would get you a 2 bed flat in a less than average Barcelona suburb. In southern Spain you might get a luxury house in the middle of nowhere, for example on a struggling golf resort development half an hour from the coast.
In Barcelona prices are much higher, plenty of flats still over a million Euros, though prices have dropped 30-40% in Catalunya
http://www.idealista.com/venta-viviendas/barcelona/eixample/
I bought in Spain a year ago and spend a lot of time there, was there last weekend. I rented it out for 7 weeks and that paid the mortgage interest for the year. Certainly your money goes a lot further there than Australia. There are many Russian owners around where I bought, and local Catalans.