Recently there was a good article by José García Montalvo in the Spanish daily El Pais, discussing the present state of the Spanish property market, and asking what will determine the scale of the adjustment underway. Here is a summary of the article by García, a professor and real estate expert at Barcelona’s Pompeu Fabra University.
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According to Pedro Pérez, the general secretary of the G-14 (association of Spanish developers) the sale of newly built property has started a mild recovery, and this position will be consolidated in the coming months. Backing this up, the latest INE (Spain statistics institute) statistics showed an increase of 7.6% in inter-monthly sales, with over 20,000 sales in September.
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I recently read an an article in the Sur in English, which talked quite positively about British looking to buy in Spain. They recently attended a property exhibition called “A Place in the Sun” held at the NEC in Birmingham. Although smaller than previous exhibitions in the UK, “A Place in the Sun”, backed by the TV programme of the same name, held a successful show with a large turnout of people looking at overseas properties.
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At the beginning of August I saw an article in Money Week discussing the Spanish property market. Now for those of you that might not be familiar with the site, it looks primarily at investments; property, stocks, etc… Anyway, this respectable site wrote about the Spanish property market, which if you follow my blog, as an estate agent on the Costa del Sol could only be of interest to me.
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It looks like the media, in this case the mail are trying to label the Costa del Sol with a new nickname. Previously known as the Costa del Crime, followed by the Costa del Golf, now the Mail is trying for the Costa del Despair. Quite catchy but not as impressive at the Costa da Morte, Coast of death (official name) that is found in the north of Spain.
Properties along Spains Mediterreanan coast (Costa Brava, Costa Dorada, Costa del Azahar, Costa Blanca, Costa Cálida, Costa de Almeria, Costa de Granada, Costa del Sol and Costa de la Luz) are down 11.5% in March 2009 year-on-year. But before anyone complains to me about ‘doom & gloom’, I am actually quite pleased about this information!
It appears that many of the Spanish savings banks, approximately 23 of the 42 ‘cajas’ intend to cooperate in selling the property assets that have been repossessed. Unlike say Santander or BBVA many of these savings banks a regional in nature so combining their assets in this way allows them to benefits from economies of scale, one of the many benefits of co-operatives.
I have just reviewing a range of official statistics (Registro de Propiedades, INE, etc..) have compiled a brief analysis on how the Spanish property market fared in 2008. As can be imagined sales are down (surprised?), but not all appears to be doom and gloom.
According to a recent article in the Spanish Daily paper ‘El Pais’, default rates have risen to 3.29%, a level not previously seen since 1997. As I had previously predicted banks are getting back into the property game and are setting up real estate agencies to sell repossessed stock.
With the slowing property market and in an attempt to promote more expensive properties several developers and agents have started marketing properties in a different light. The new buzz word is fractional ownership of properties on the Costa del Sol. This is being treated as the newest way of owning a property in Spain, but really is just a a way of encompassing existing methods of buying a property under one term.
There has recently been an increase in potential buyers searching for properties on the Costa del Sol that fall into the category of distressed sales or properties that have been heavily reduced.
As is to be expected, many of the cash buyers around or those that can secure funding from lenders, are unwilling to part with their hard earn funds on what they see as property prices that were fueled by the recently ended credit boom.
Further to the petition I recently mentioned in an article I would like to bring the following petition to everyone’s attention.
After a recent comment on my article regarding Aifos bankruptcy I thought I would look into forced completions on developments. I’m sure several of the people who will read this will know what I am talking about has several developers in the past have threatened buyers with legal action or the loss of invested monies should they not complete on the required dates.
According to Tinsa’s property price index on the Mediterranean coast fell by 14,3% in 2008 with a lower drop in the towns and cities at 10,2%. For you information Tinsa is one of Spain’s leading appraisal companies.
It also appears that this fall applies to both newly built and resale properties.
