European Property News - Real Estate Developments in Europe - Property for sale - Market Conditions - Industry Articles

Submit News (It's Free!)
TopPropertyNews.com
Headlines:
 
Latest News Articles:

Latest Online News:

Outlook for Spanish Real Estate Still Bleak - holprop.com


09 February 2011 - www.holprop.com News (Tony Osust)

A sunny lifestyle, spectacular views of the Mediterranean and the hills, warm, friendly people and a vibrant social scene have made Spain one of the most popular destinations for international tourists, retirees as well as younger permanent residents. With an increasing influx of foreigners seeking sun, fun and warmth, the demand for homes accelerated and a slew of budget townhouses and apartments came up on the Costa Blanca, Costa de Almería and Costa del Sol. For the wealthy there are places such as Marbella where there is no dearth of well-designed and beautifully located luxury villas and apartments.

But Spain’s beautiful Costas are no longer attracting snow weary British, Germans and others in the numbers they once did. Residential construction has abated and the landscape is dotted with numerous unsold apartments, many of which are poorly built. Prices have dropped by as much as 50% in this segment and could drop further. Though real estate everywhere in Spain has taken a hit, the low-end holiday home segment has suffered the most.

With even the Spanish Prime Minister acknowledging that Spain’s economic decline isn’t over yet, the real estate market is expected to suffer more in the short term. In a recent report, The Bank of Spain (BOS) said that the recovery is unlikely to commence before mid-2011.

Spain’s decade-long economic boom was actually fueled by a real estate bubble that was induced by cheap and easy credit and an unprecedented flurry of construction. In 2007, investment in housing stood at 7.5% of GDP, significantly higher than the OECD average. According to the BOS, residential investment is likely to constitute around 4% of GDP in 2011, the lowest for years.

The debt crises in Greece and Ireland have dented Spain’s image as well. Though Spain is making attempts to manage its deficit, there are doubts internationally about Spain’s solvency with many expecting it to go the way of Greece and Ireland. These fears have increased the cost of borrowing for Spain and banks have cut down drastically on mortgage lending.

During the boom years, millions of jobs were created in the construction sector and the economy roared ahead as consumption soared. Prices of Spanish real estate skyrocketed as speculators entered the market. The party ended abruptly in 2008 as the global recession hit and credit dried up. As demand dwindled, the real estate market crashed. Developers who had taken huge loans were left with blocks of unsold houses and massive debts. The crisis has brought spiraling unemployment and uncertainty. It is estimated that approximately 2 million jobs have been lost. According to the BOS, the number of unsold new homes for sale in Spain was between 750,000 and 1.2 million at the end of 2009.

However, all is not bleak. As prices reach more realistic levels in the luxury home segment, wealthy buyers with cash have begun looking for value purchases because there are numerous well-designed, high quality properties on the market in places such as Marbella where prices have fallen by as much as 20%. Away from the tourist centers, Barcelona, Madrid, Seville, Valencia and other cities popular with locals have also seen a 10 – 30% drop in property prices and over-supply is still a problem. But domestic buyers looking for primary homes will come back as the economy begins to recover and banks start lending. There is value to be found in this market as well. Interested buyers will likely benefit from a wait and watch strategy.

While those looking for short-term gains should stay away from the market, this is a good time for buyers seeking properties in the mid to high range segment and with the ability to make cash purchases to survey the options and there are plenty available. It is a buyer’s market now, giving him enough time to shop around for value and negotiate.

Tips for buying property in Spain:
• Consult a reputable and independent lawyer who has a thorough understanding of Spanish property laws.
• Appoint an independent translator, not one recommended by your estate agent.
• Don’t commit to any payments until your lawyer has verified the ownership, development plans and all other legal aspects of the property and is certain that the property is debt-free.
• Agents often charge very high fees in Spain. As the same property is often advertised by different agents, it’s prudent to shop around for a fair deal.
• If you plan to buy off-plan property in Spain, you need to ensure that your sale deed protects you in case the buyer does not meet his commitments.
• Property can be transferred only if it is certified by a notary. The buyer, seller and notary must sign the deed.
• In order to ensure that your ownership rights are protected, you should register your title at the relevant office.


By www.holprop.com (February 9, 2011)
Spain Property sales | Spain Holiday rentals | Spain Monthly lettings

 

 

Syndicate:
RSS Feed

Holprop.com :
Other Articles »
Rating : by 2 users
Rate or leave comment

Comments:

Related Articles :

  • The Rain in Spain...Stays Around for Real Estate (10 April 2010)
    It's a lyric in the musical My Fair Lady, and the words are “The rain in Spain stays mainly in the plain.” From 1997 to 2004, property prices in Spain rose around 173%. It was a sunny time for real estate investors, building trades, and the economy as a whole. But, today's picture is very different. It's raining, and the rain isn't staying put “in the plain.” Real estate is depressed just about everywhere in the country, and the effects ripple through the economy. Talking recently to Rad...

  • French Real Estate Sales on the Rise Again (01 December 2010)
    From charming farmhouses amid lavender fields under the Provencal sun and affordable apartments as well as pricey waterfront villas in Cote d’Azur to ski chalets in the Rhone-Alpes, France offers an interesting diversity of landscapes and accommodation. Be it a retirement or second residence, vacation home or a buy-to-let property, a house in France has long been a dream for many international buyers. It’s easy to understand why. One of Europe’s largest and most beautiful countries, France’s...


















  • Search News Articles :
    Disclaimer:
    The news articles on www.TopPropertyNews.com are provided for information purposes only and for redistribution to the public. www.TopPropertyNews.com does not accept any responsibility or liability for the content, all content is provided by the publisher or author.