Buying Property

Moraira and Javea Property Investments

The recent financial collapse of some of the leading investment banks, ongoing business failures, rising unemployment, stocks and shares rendered worthless overnight to what they once were and the credit crunch that is starting to kick in, it’s no wonder that the once highly inflated property prices have been affected. The value of sterling has diminished almost one for one against the euro having a dramatic effect on the once strong buying power of the UK pound.

Even the recent cut in interest rates by the central European bank did little to rally sterling other than a few points. As the UK economy slides deeper into recession, the threat of further interest rate cuts by the bank of England will again weaken the pound. What does the future hold for property owners in Moraira and Javea?

As Far as the Moraira & Javea property market is concerned, I think we are witnessing a market shift as people respond to the current crisis. More and more people will reduce overheads and find safer and more manageable ground. This will mean scaling down and selling off assets, for those that have to sell, at knockdown prices to realise some liquid cash whilst reducing outgoings. Even though Moraira and Javea property prices have been far more insulated from the massive devaluation seen in other areas, it has still been affected, more so, to those people that simply have no option other than to sell.

I think it’s going to be some time before we see any recovery and unfortunately more people are yet to feel the pinch. Historically, only 10% of property stock in Moraira and Javea would be up for sale at any one time. Due to the ongoing crisis I predict an increase this year of up to 15% as the full effects of a bad situation are felt. Consequently, buying property at knockdown prices is on the increase as investors and other people with savings capitalize on a dire situation.

Thankfully for most of the property owners, they don’t have to sell and let go of their dream but as the situation worsens many will have little alternative.

As professional property finders, finding a really good bargain takes a lot of effort. Sorting through the 10% of property stock takes much time and effort. What may seem a bargain may be fundamentally flawed and probably the reason it has not sold in the first place. There are some highly desirable properties at knockdown prices to be had. To maximize capital growth it is important not to inherit a problem or location that cannot be changed. Buyers beware!

For many years the UK buyers have predominantly driven the Spanish property market. Villas for sale in Moraira and villas for sale in Javea are no exception.

There was once a time when the majority of UK property owners had enough collateral in their UK home to finance a second mortgage for a holiday home in Spain. The increases in Spanish property prices over recent years closed the gap significantly and as this was taking place the property purchase model changed and the calculations included the rental potentials more so than ever before to help with annual cost. Bare in mind this was when sterling was at it’s strongest and Spain was a cheap holiday destination, especially before they joined the euro. Due to the fall in the value of sterling, the holiday rental market that Spanish property owners depend upon is going to be a tough one this year only adding to the problem. If you are depending on renting out your property this year, I recommend advertising within the euro zone and not just the UK.

Recently, interest rates have been reduced to all time lows, but how much the banks pass on to us is a completely different matter, especially if they have you paying 6% plus with an annual review! Therefore banks have an opportunity to make more money out of this situation. They will undoubtedly be reluctant to pass any savings on to us and will stretch it out for as long as they get away with it. If you have a Spanish mortgage, the devaluation of sterling means many property owners are now faced with extremely high monthly mortgage payments.

Many ex-pats living in Spain on a UK pension have seen at least a 30% reduction in their income. Many are now scaling down from their detached villas to smaller more affordable properties and even renting instead of buying realizing a little more liquidity to see them by. Some of the best property deals to be found are with the property owners that bought before the property boom. They can afford to sell at much lower prices than someone that bought during the property boom and still recover some profit. What the seller may lose on the price they have to sell at they can recover this lost value when they negotiate the price on a smaller property.

Mortgage defaults are escalating and consequently property repossessions are increasing. It is therefore important not to get into arrears and speak with your bank manager if you are having difficulties. Some are simply handing the keys and deeds back to the bank and walking away. Providing there is more value in the property than the overall debt, handing the keys back to the bank with no arrears means it then becomes an asset to the banks balance sheet. It’s never simple but handing the keys back could be a more favorable option for you but it means you lose whatever you have put into it but at least they cannot chase you around for the rest of your life or be made bankrupt. If people are in arrears with their mortgage and cannot pay the bank, after four months or so, the bank will issue a repossession order to the courts. A repossession order is a banks last resort as it also means a liability for the banks balance sheet. If the property is repossessed, the banks can auction off the property at a fraction of the market price and then chase you for the remainder of the outstanding debt and that includes any future earnings or inheritance you may one day have! Even if you go back to England, they have English lawyers in place to track you down. It is paramount that you speak with your bank manager before you fall into arrears.

As already mentioned, more recently we have seen much interest from property hunters /investors that are looking for highly distressed property sales, something that we specialize in finding for our clients. Some people do have money and those that have, at this moment, don’t trust stocks and shares and can’t earn hardly any interest on it from the banks without tying it up for a given period. And as for the rest of the alternative investment plans and schemes, just how are they going to be managed? Other than for some more specialized investments that you may have a role in managing, you have to be a rather brave investor to trust any institute again. Anyone for roulette!

Tying money up with the banks, in my opinion, is also a risky proposition right now, regardless of promises from the government to underwrite it.
I think cash is king and we all need some liquidity that’s totally accessible just in case governments declare a financial state of emergency. What if?

Having too much cash is also risky and a tangible asset makes perfect sense. If we take note of our boom and bust history, property seems to be a good choice right now and probably the only thing worthwhile. Unfortunately, we don’t have a crystal ball, so much for timing! I am afraid to say for those that have to sell, needs must but it’s a golden opportunity for an investor or simply someone whom has always wanted a place in the sun at the right price. That said, you have to realise a distressed sale when you see one.

Written by Anthony Bloom For more information www.spanish-property-sales.net

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Spanish Property Market

The Spanish property market has been experiencing difficult times over the past couple of years and many Estate agents have gone out of business and many more are set to follow. The exchange rates for sterling are at an all time low against the euro and predicted to get worse. Some are saying one for one over the next twelve months. At that time the UK will probably join the euro if it’s not already been orchestrated!

The doom and gloom of the British economy is having a negative effect on everything, especially the spanish property market that was once booming. There are still people buying property in Spain but the trend seems to be people leaving the UK and selling up to seek a new life. It’s understandable, especially with the recent events with the new PM Gordon Brown and his crew.

Some of the property prices here are reflecting a bad situation and those who need to sell are reducing there prices accordingly. There are a few good deals to be had if you know what you are doing. It’s certainly the time to buy and have recently seen an influx of private investors swooping up some of the worthwhile deals to be had. Some are not worth having if it’s a fast profit you want!

Finding the right property is a very time consuming task and most people simply do not have the time , let alone the expertise , in finding the best deals and a property worth investing in.

There are areas in Spain that should be avoided mainly due to the mass developments that have been allowed along the coast, many of which continue to cause financial problems for the investors and more recently the short sighted developers who built them!

To shop smart, you really need an expert property finder that is well versed in such a task and can fast track you to the best deals worth seeing.

Here is a general property link

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A Guide to Moraira

Moraira is a beautiful town with no high rise hotels. In the centre of the town there is a most attractive avenue leading to the main beach of Ampolla.

This has a water feature along its length with plane trees overhead which give much needed shade during the summer. A natural pond has also been formed near the beach to encourage wild life and there are gardens and paths with plenty of seats.

At the northern end of Moraira is the beach of El Portet studded with exclusive properties! above which is the Cap d·Or watchtower.

The beach is very safe for children and there are two bars/cafes which serve delightful snacks, salads, fish and you can order a Spanish paella, all can be eaten at the very edge of the beach with spectacular views of the Ifach Rock at Calpe. There is also a restaurant.

In the main part of Moraira there are plenty of shops, bars and restaurants to suit all tastes. The main beach, Ampolla, dominated by the beautifully preserved tower, is also very safe for children and during the summer season the beach has at least one life guard. The tower houses a museum with interesting aspects of the sea and pirates.

There is a market in Moraira on Fridays with many vegetable stalls, clothes and gift stalls. There is also a market in Teulada on Wednesdays-.

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To Buy or Not to Buy?

To buy, or not to buy? – that is the question.

Especially when some of the UK media are reporting that property in Spain is overpriced by 30%, that thousands of properties are empty, prices are falling, developers are going bust, and Spanish building company stocks are plummeting. Add to this the really scary stories of developers taking homeowners´ land, demolition of illegal buildings, and town hall corruption, and it´s enough to put you off the idea of owning a home in Spain completely!

Of course we all know that there’s “no smoke without fire” and there are obviously issues for concern, but we also know that the media excel at scaremongering – good news doesn´t make headlines. Perhaps some feedback from this Correspondent in Spain may dispel some of the misconceptions and generalizations.

These tales of doom and gloom apply only to very specific areas of Spain and if you do the research, there are still some very worthwhile investments to be made. Hang on tight to your dreams – Spain still offers all the attractions which drew you to it in the first place, not least the wonderful climate and some beautiful places to live.

Today’s poor exchange rates are obviously concerning prospective buyers relative to what they can buy for their £sterling. When we bought our home in Spain, the exchange rate was in the mid 1.80´s. The pound has gradually weakened over the past 5 years, to around the 1.30´s now. City analysts predict a further decline over the next few months, with the pound settling between 1.20 – 1.30 for some time and unlikely to rise above 1.30 again. Then, who knows, maybe the UK could join the euro?

We have no option other than to get used to it, but the weaker pound has clearly not discouraged us Brits from traveling, shopping and holidaying in the euro zone. Nor has it put us off moving abroad – according to UK government figures, a record 250,000 British nationals emigrated last year, with Spain and France in the top 4 destinations. It simply means you don’t get as much for your money as you might have a few years ago, unless you work hard to find it.

Right now may not really be the best time to sell, but it could certainly be the best time to buy, provided you do your research carefully.

We have been living and working in Spain for many years now and have seen the property boom and then the inevitable tail-off – not dissimilar to what seems to happen in the UK every few years. Being in the resale Spanish property business ourselves, we have to make sense of what is happening now in the Spanish property market to enable us to plan ahead and secure our future. We keep abreast of what´s being reported in the UK, but we have the benefit of first-hand experience and local knowledge to help us keep things in proportion.

When we first began researching where to live in Spain, we made numerous trips to all the Costa’s over a 4-year period, and almost gave up! We witnessed, nearly 10 years ago, the mass of new developments and housing estates being constructed in the sun. It was cheap, and awful. We knew then, and it wasn’t rocket science, that the bubble would one day burst as far as those areas were concerned.

The lack of infrastructure, poor locations and the whole mass housing estate boom was certainly not our Spanish dream and not surprisingly, it has become a terrible nightmare for some of the unsuspecting property purchasers of that time.

I can remember some of the property exhibitions and Reps on stands trying to reel us in with inspection tours and subsidised trips, geared for selling a vast number of properties. It was like lambs to the slaughter and we are glad that we never succumbed to it. That massive scale of new development and over-supply is responsible for much of today´s bad press and falling share prices of the larger construction companies.

We were fortunate that we had the time to thoroughly research our ideas and not get caught up in the whirlwind created by ravernous property conglomerates. Seeing so much development really put us off, and after nearly giving up on our Spanish dream, we found Moraira and Javea on the northern part of the Costa Blanca.

Moraira and Javea were already well established and had many beautiful, individually designed villas, but no high-rise and no housing estates. Developed areas were interspersed with lots of unspoilt pinewoods, vineyards and olive and almond groves. Looking inland, there were beautiful rolling landscapes and mountains, and coming from the Peak District National Park, it felt more like home!

We soon realized, though, that these exclusive and desirable locations had a much higher price tag than what was on offer elsewhere. This did not deter us, we decided to invest in location and compromise a little on the property. We are so glad we did!

The quest we embarked upon for our own “"place in the sun":/” eventually became our business, offering property finding services to others looking for suitable property. We realised that most people don’t really have the time, contacts or expertise to seek out property in the best location and at the best price. They would rather work with us than alone, and we are here with our fingers on the pulse! See some of the testimonials.

We have seen a significant increase in a new breed of client over the past couple of years. People are shopping smarter these days, and 98% of clients are very active on the internet. But they soon realise that all is not as it seems, especially with varying prices for the same property at numerous different agents. It’s no wonder they are cautious and rightly so, it gives a really unprofessional impression of the property market here. This, coupled with the bad press tarnishing Spanish property generally with the same horror stories, it’s no surprise that many people conclude that they can pick up a villa for next to nothing!

Although we have seen a steady decline in property sales in general terms, thankfully Moraira and Javea still continue to retain desirability and consequently, higher property prices.

Most people have holiday homes here to enjoy, whilst knowing they have made a good investment. The expats, who live here permanently, are more than settled. So it would be a mistake to think that people in established and desirable areas like these are going to give their homes or second property away; Most seem far from being desperate.

Yes, it is a buyers´ market, and people wishing to sell their property realise the trends and are prepared to negotiate harder on price subject to the condition, location and more importantly – on their personal circumstances.

We are seeing many properties being withdrawn from sale and people holding back because they know now is not really the best time to sell. Consequently, quality property stock is becoming rare and well-priced quality property still sells first – if you can find it!

A good investor knows the time to buy and a good deal! But beware of waiting for the impossible deal and missing the boat completely. Prices will inevitably rise, whilst you hang on for that fantastic deal in the rain and the cold, whilst taxes are getting higher, crime is on the increase, the cost of living is sky high and getting worse, and immigration continues to escalate at an alarming rate. You could be enjoying the sunshine and laid-back Mediterranean lifestyle today.

It’s a real challenge to find your dream villa, whose owner happens to be desperate to sell, especially when Moraira and Javea are very popular choices for the villa rental market offering significant income for those that seek it.

That said, there are always a number of people going back to their native country, either through ill health, divorce, bereavement etc. But is their property in the location you want and are they prepared to accept your offer? Most of the properties that are not selling usually have good reasons why they don’t.

As far as that suggestion that all Spanish properties are 30% overpriced is concerned, in our experience prices are always negotiable to some degree, especially so on properties requiring a lot of work. But if it’s in the wrong location you’ll be lucky to get your money back. It’s surprising just how many make this mistake, so be careful you don’t end up buying one of them, old or refurbished! I wouldn’t buy some of the properties I see at half the price, let alone a 30% reduction.

And some I would not touch at all, so it is really important you do the research and don’t believe everything you read. You will know a good deal when you see one.

We help all our clients make the right choice and a property truly needs to represent good value in the whole scheme of things. To establish this, we work very closely with all our clients, seeking out really worthwhile properties on their behalf. We utilise all of our skills, contacts, building experience and years of living here, whilst we build up a true picture of what you want, and what is available. All this can be in place ready for your arrival. For further information take a closer look at this link or you can contact us using this link

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