The below article was written prior to the elections last Sunday, but is still of interest as it looks at many of the urban projects that are still pending and will be beneficial to the Costa del Sol property.
Last Friday the Spanish government announced a temporary reductions in the value added tax (IVA), lowering it from eight percent to four percent for any purchase of a new property. The government’s aim is to rekindle Spanish property sales and help reduce Spain’s stock of unsold new homes, which amount to approximately 687.000 properties in Spain, and just over 20.000 in the province of Malaga.
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The sale of Costa del Sol properties saw an increase of 7.8% in May compared to the same month last year according to Spain’s Institute of National Statistics (INE), with monthly sales standing at 1,931 sales (including VPOs).
A recent court ruling in Spain has offered a lifeline to overseas property buyers fighting to get back “lost” deposits from the country’s banks.
As investors continue to battle to get back deposits paid on non-existent overseas homes, a Cantabrian judge has ruled that a bank (Caja Cantabria) responsible for protecting a client’s funds, failed in its duty.
To the rest of the world it became known as the subprime mortgage, but in Spain it is remembered as the “welcome mortgage.” It was specially designed for immigrants in 2005, at the height of the property boom, by Spanish mortgage brokers such as CreditServices. With nothing more than a three-month work record in Spain, these companies offered new arrivals to Spain mortgage loans that covered 120 percent of the value of a property. All the costs, fees and commissions would be covered by the loan, and the buyer would become a Spanish homeowner without having put down so much as a cent. The loans were organized through US companies, none of which had any physical presence in Spain, preferring to use fronts such as CreditServices instead.
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When real estate markets slows as is now the case, the amount of properties on the market increases and the number of buyers decrease. This makes it harder to sell properties, yet properties still sell. So, the question is, why do some properties get offers and others sit on the market? In quite a few cases this has less to do with the property (as many are priced to sell) and more to do with how the property is marketed. So below I am going to cover some of the good and the bad and work on the assumption that your Costa del Sol property is priced correctly.
The G-14 (group of largest developers in Spain), claim that there will be a shortage of properties in Spain in the next 2 to 3 years in certain areas if the level of granted licences continues to drop. Pedro Perez (General Secretary of the group) claims that due to the lack of building permits having been handed out, prices on newly built properties in urban centres have already been adjusted via supply and demand.
At least according to an article on OPP. Leading up to May, Rightmove (leading British property portal) claims that of the 10 searches that have increased the most 50% were for Spanish property locations. Key interest was in Minorca up 9.06%, Marbella up 6.68%, Galicia up 5.96%, Northern Spain up 5.22%, and the Balearic Islands up +3.65%.
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The surplus supply of newly built properties on the market waiting for a buyer rose by 8.9% to 114,147 by the end of in 2009 in Andalucía, according to the Ministry of Housing. On a national level, the supply of newly built properties on the market stands at 688,044 properties, an overall increase of 12%.
A surge of foreign lifestyle buyers and investors has split the Spanish property market.
Sales are up 200% in some regions compared with 2009 – despite the Bank of Spain claiming that last year was the worst in a decade for foreign property investment in Spain.
“Parts of Spain are doing really well at the moment but there are two completely different markets,” said James Dearsley, European sales manager at agent Atlas International. The company has reported a significant increase in sales since November 2009.
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After all the recent ‘positive-ness’ about property in Spain, potential green shoots, etc… I thought this article by Mark Stucklin was quite interesting. Marbella it looks like has done quite well in this first quarter. Actually more than that, this has been the best first quarter in the last five years. Like Mr Stucklin I am also quite dubious about this information, and I will give the town hall the benefit of doubt as they have been trying to clean up Marbella and its image. Personally I think the statistics are as positive as they are due to postponed completions (due to irregularities, etc…) and probably a slight surge in property in Spain. Anyway here is the article:
