JANE SLADE assesses the property market in Spain and discovers it is not all doom and gloom but you do have to watch where you buy The Hondon valley, a hilly, rural enclave of villages and farms 40 miles inland from Alicante has been a peaceful idyll for many Brits who came seeking a place in sunny Spain away from the searing heat and concreted Costas. But since the recession many hit by the poor Euro exchange rate have been forced to sell their villas at rock bottom prices or hand the keys back to the bank.
Back in January, Murcia-based estate agent Mercers boldly declared a estimated twenty five per cent boost in house sales for 2013 over 2012. With quarter 1 indicating just that, up twenty five per cent for the first 3 months of 2013 when compared with 2012, the prediction is on track to becoming reality.
Chris Mercer, Director of Mercers, says, “I can’t pinpoint exactly why our sales are up so much, but impetus is certainly beginning to build. It can’t be caused by an end-of-year dash before VAT on new builds went up from 4% to 10% on 1 January, as all of our sales have been resales. Additionally, enquiries haven’t increased at the same level but those we have tend to be serious, have the funds on hand and are intelligent enough to understand that the window of opportunity on a serious Spanish property discount isn’t going to be open forever. Lastly, compare Q1 2013 with Q1 2011, and Mercers’ business is up close to 65%, quite some margin. Needless to say we’re revelling in the positivity.”
2013 seems set to become a great year for Spanish property. Most recent reports summarising property sales and rental stats from government and independent sources, indicate that the second half of 2012 observed a rise in worldwide customers aiming to snap up value for money property stock. And there’s several reasons why now’s a good time.
As the international property world prepares itself for a new year in 2013, Spain is wanting interest from new international markets and renewed keenness from normal buyer locations is likely to make for a positive year, pushing on from a good end to 2012.
Agents, developers and property consultants feel interest in each of the top and lower ends of the sector is up, with cash buyers in an specifically strong place, while international buyers and those from outside the EU may find proposed new legislation to grant residency to everyone investing in a property for more than €160,000 especially appealing.
Nestled amongst a bevy of exotic Latin American locations, there was a surprise entry into the World’s Best Real Estate Markets 2012 – Murcia in Spain. Created by the boffs at International Living, the index takes into account value for money, appreciation potential, income potential, costs and ease of buying and believes Murcia has got what it takes to make you money in 2012._Chris Mercer, Director of Mercers, a real estate agency based in Mazarron at the heart of Murcia, comments, “Finding ourselves amongst a who’s who of emerging nations, the likes of Brazil, Mexico and Uruguay, is flattering but not altogether unsurprising.
Average property prices are still falling in Spain but in the Costas which are popular with overseas buyers they are seeing less of a decline than other areas. The latest figures from Tinsa, one of Spain’s leading appraisal companies, show that prices fell the most in regional capitals where they are down 8.1% in the 12 months to the end of October, followed by a drop of 7.5% in metropolitan areas.
For the European second home investor Spain has long been the destination of choice. Over recent years the proposition has got even more attractive as house prices across Spain have steadily fallen. Property is now the cheapest it has been for a decade and every major international property portal is reporting a marked rise in ‘searches’ for Spanish real estate. Here Chris Mercer gives his personal view of the current market in the region where he is based and explains why there’s no better time to buy.
At Mercers, head quartered in Mazarron on the Costa Cálida, we have seen a small but steady increase in sales over the past 18 months. Prices do seem to have finally bottomed out as people either cannot or will not go any lower. Yet there is no strong indication that they’re going to rise either. Until demand picks up in a stronger manner, there is no reason for values to increase unless there is a significant external factor applying upward pressure.
“Spain hopes to tempt Britons back into the market this summer with a million unsold homes going at bargain prices and in top locations,” says Cathy Hawker with a million unsold properties and prices slashed by 40 per cent, the Costas property bubble may have well and truly burst but the Spanish government is banking on British buyers coming to the rescue.
SPAIN needs another golf course development like Bourton-on-the-Water, needs another tea shop. The country is positively congested with these reminders of Spain’s boom years and many of those who have already bought are less than happy. Angry British golfers have complained of broken contracts, substandard homes and lack of promised amenities.
The Spanish government has been edging along a political tightrope as UK buyers put the brakes on their aspirational holiday home purchases. In a country whose property industry accounts for well over 10 per cent of its gross domestic product, the decline in the housing market has had grave repercussions for tourism and the economy. Steady reports of agents and developers going bust, migrant workers being laid off and major developments being postponed indicate that it’s not just foreign buyers feeling the bracing effect of Spain’s property slump. With some agents offering dramatic discounts – in some cases, two for the price of one – to revive flagging sales, unemployment and property devaluation are two of the major concerns now faced by developers and municipal governments alike.