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