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.
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.
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Madrid and Barcelona may be Spain’s fast track to cosmopolitan culture but if you want the charm of Latin life, with the benefits of an urban setting,the country’s smaller cities are the perfect compromise.