July 2010 Archive

Moraira Property Update

It’s been a while since we wrote about the Moraira property scene as we wanted to see and experience where it was heading.

As far as the property market goes it has picked up significantly for most if compared to the previous two years. The market seems to have stabilised albeit there are still many properties that are over priced. That said price corrections are now common place, but still the best bargains tend to be down to the personal circumstances of the vendor.

The year so far for us has been fantastic and likewise for many agents we speak to with property sales on the increase. Thanks to Moraira being a highly desirable place to be it attracts property sales as soon as things start to stabalise. There are many buyers around at the moment and hope this trend continues regardless of the UK media always talking about Spain’s deficit and painting a doom and gloom picture. The negativity probably takes the heat off the UK’s recent austerity measures.

Spain has its problems and they are of course very serious as is the UK’s but the coastal town of Moraira remains far more insulated from the wrath of the poor economic climate as a whole. In fact this summer has seen some of the largest crowds at the local fiestas ever and villa rentals are almost full.

The market here in Moraira is driven by Northern Europeans more so than the nationals or Spanish economics, although it’s bound to have some bearing on things especially when taxes or rates increase. Regardless of increasing living cost here in Spain, northern Europeans still want sunshine and a little paradise for their families. The irony is that people are now getting used to the economic problems and know they will not be going away for some time but meantime they still have a life to get on with regardless and now seems to be a good time to invest in property rather than leave cash in the bank which is also a concern for many.

The threat of turmoil was worse than actually being in it as we are today.
The problem with a threat is that you don’t really know how bad is it going to be, so people fear the worse and sit tight becoming spectators for a while which makes things even worse and then they wait until it’s bottomed out. The talk of a double dip recession does not make much sense unless you believe in a so called recovery. We all know the economic struggles we have today will last for years, it’s hardly going to recover and will simply stabalise itself and remain tough. We will probably see some more bailouts, mergers and austerity measures over the next two years or so but for most it will be no surprise and life will continue and wealth will still be created and spent.

So when does it bottom out? If bank bailouts, country bailouts, hardly any interest being paid from the banks to savers, debasement of their currency through the printing of even more money, lowest interest rates in history as well as the real cost of inflation being hidden is not enough, I don’t know what is!
Its no wonder property is becoming a safe haven again.

Consequently we see so many property buyers coming from Holland, Belgium and the UK. Only this time around it is being led by people that understand value for money and investment opportunities plus they are mostly cash buyers. Very different from the boom days where the many could well afford the Spanish dream based upon their equity in their main residence and when banks fell over backwards to lend money which all added to the property price hike.

Having spoken with many clients over the months it’s obvious there has been a shift in the mind set where once people were more than willing to sit it out and leave their money in the bank or in other investments.
95% of all our clients are now cash buyers. This is because anyone with savings, especially in a bank, hardly earns any interest. They seem to be taking their money and investing it into something tangible. Most do not gamble with stocks and shares at this level and historically property has always been a good long term investment that is reasonably safe, plus it is income bearing if you go down the letting route and you get to use it with the family, so it kind of makes sense.

Spanish banks have begun to lend again but to get the best deals around you need to put down 40%. The less risk for the bank the better the deal for you!
They do lend up to 70% and sometimes a little more but the packages are not as good.
They also vet you like never before especially if you have your own business, so be prepared! We have a few contacts for mortgages if needed!

A word of advice: It’s better to get your finances in order before looking for a property because you may be refused by the bank or if not by the time you get mortgage approval the property you found to be a real bargain gets sold to someone else. Happens all the time! If it’s any good that is.

Happy property hunting and don’t forget we can take away the stress and find properties others can’t as well as make things very easy for you!

Good luck until next time

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Posted by on Tuesday 27th July 2010