The Bank of Spain has reported that in 2011 foreigners invested over 4,700 Million Euro’s into the Spanish property market, showing a rise of 27% on 2010. Given that 2010 wasn’t exactly a great year economically, there’s no reason why 2012 shouldn’t produce the same results regardless of whatever fate awaits the Euro or the Spanish economy.
As at June 2012, the pound/euro exchange rate is hovering around the 1.2 mark, the highest since Autumn 2010, making Spanish property just that little bit more affordable for the British buyers and bringing them closer to their dream of a home on the Costas. But it’s not just the British who are considering Spain again – we have seen a significant increase of interest from the Russian, Chinese and Scandinavian markets.
In the Costa del Sol, there are still many great property purchasing opportunities with sellers who are in dire straits after not being able to sell their properties. It could be for the simple reason that they simply wish to return to their home countries due to ill-health, old age or family commitments and many will accept brutally low offers just to ‘escape’ the costs and responsibilities of running a home in Spain. This is how the term distressed sale originated and obviously it does nothing to help shore up prices in a tricky market.
These are worrying times for many Spanish home-owners, and clearly the Spanish Banks show little sign of being able to help – due in the main to their own greed during those ‘boom’ years. If the marketplace continues to be flooded with distressed sales then prices will continue to fall, until no-one is prepared to sell their property at a price below a certain level.
It may be that some Spanish property prices fall a further 5 or 10% during the latter half of 2012 but given that Banks and Sellers are already discounting their prices by up to 45%, this will have little influence on the current market.
The price of property in brand new developments (of which there are significantly less now) in the Costa del Sol has dropped by 12.6 per cent in the last year, and by more than 30 per cent sinced the economic crisis began. These more reasonable prices have helped to reduce the number of unsold properties in the market – particularly when the Banks financing the developments are still offering up to 100 per cent mortgages at very favourable rates (note the term ‘up to’!). They need to off-load their surplus stock.
Marbella and Puerto Banus are yet again appearing in publicity and press coverage due to the recent influx of the jet-set and celebrity crowd (one of the highlight episodes of the ITV television series TOWIE has just been filmed in Puerto Banus) and this looks likely to continue through the 2012 summer season. Whilst we have to listen to all the negative reports about the European economy, Marbella and the surrounding areas will remain very firmly ‘on the map’, making it a more than interesting destination for foreign property buyers.
Particularly in the areas in an around Marbella since the announcement of the 400 million euros investment by the Sheikh Al-Thani of Qatar and associated companies into the expansion of the La Bajadilla port (known locally as the Puerto Pesquero or fishing port) which is located on the east side of Marbella town. Planned for completion in 2015, this is expected to bring back significant revenue back to Marbella, not only from the new shopping centre and amenities, but also from the cruise ships which will finally have facilities to stop off at Marbella, instead of having to take their passengers from Malaga straight to Gibraltar or beyond.
So – is it a good time to buy? Theoretically, if you purchase fully legal property at a competitve price and in the right location, then any potential loss is going to be minimal but you should be prepared to invest for the long-term. Think realistically how long do you want to put your life ‘on hold’ whilst waiting for ‘the best time to buy’. After all, every day that passes is a day that missed out on the opportunity to enjoy a home in the sun and many would say that life is just too short! With good legal advice, and a safe financial position this is most definitely a time to seriously considering buying your dream home in the Costa del Sol.
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