The worst property market I have experienced in 25
years seems to be turning the corner after 30 months of very poor demand. My
name is Nick Westby from www.WiseMoveToSpain.com
and I have been helping people buy property in the Costa Tropical for 5
years.The Costa Tropical is the
coastline of Granada, 45 minutes east of Malaga airport and 30 minutes from the
fabulous city of Granada.
Demand first started falling in August 2007 when
people believed that prices were too high and that other European destinations
were proving to be a more cost efficient destination. Maybe these people were
right, but they have also run into problems in August 2008 when the full impact
of the credit crunch began was felt. That is all history, so where are we now?
Is it safe to go back into the market? Will the prices go down further? To
answer this question you must look at the fundamentals.
1. Product quality
2. Supply and demand
3. Current pricing
1. What is Spain, or to be more precise in our case, Granada´s
Costa Tropical, selling? What does it have to offer that people are willing to
buy? The Costa Tropical has one of the best climates in Europe, two new
motorways linking the area to the city of Granada, Malaga and Almeria (to be
finished 2012), skiing in the Sierra Nevada, traditional Spanish culture not
diluted by Northern European fashions. Limited development and lots of protected
countryside. The Observer newspaper quoted Almuñécar as the holiday resort of
the Spanish. Compared to other resorts in Spain and throughout Europe, the
Costa Tropical can hold its own.
2. Luckily the
Costa Tropical was behind the curve for rampant property development and so did
not suffer the massive over supply of repossessed apartments and unsold villas
of other Costas. Demand for the culture
and the micro climate remain strong from Northern Europeans and affluent
Spanish buyers who want an investment or summer home on their favourite coastline.
As the Costa Tropical enjoys the best climate in Europe (according to the World
Health Organisation), the 830 million inhabitants of Europe provide substantial
demand for property.
3. There is a dual pricing scenario at the moment with
realists reducing prices to sell and the dreamers still hoping to achieve the
highest prices of 3 years ago. All the sales we have been part of in the last
six months have been at 50% of the highest marketed price! Remember that the
highest asking prices did not sell so were probably 20% over priced. So the
real price correction on these properties has been a reduction of 37.5%. According to a Deutsche Bank report out today
the USA has dropped 30% in 3 years from the end of 2006.This report considers
the USA to be out of their housing slump with prices beginning to stabilize and
grow. Europe lags 6 to 12 months behind
the USA so we will not see this stage until later in the year. This time delay
is also confirmed by the fact that lending here in Spain is allegedly going to
start flowing again in June 2010 whereas in the states this process started in
early 2009. This availability of finance will be the key to the timing of the
recovery of the market in Spain. Therefore the sale prices we have seen
represent a 7.5% discount to the lowest prices predicted as the bottom of the
market. These are the bargains that
other people seem to find, but never you! Now is the time to get yourself a
good property professional and go shopping for your Bargain Spanish Property.
