Spain property
Spanish property Market Analysis and Overview October 2009
With the news earlier this week from the G-14 group of Spain’s biggest developers warning that the glut of newly built properties languishing on the market is set to continue growing, heading for 800,000 properties by year end with the G-14 calling on the government to stimulate the housing market. At the current average sale taking place in Spain this could take 5 years to sell the backlog. These are bleak times for the Spanish property market or are they? Closer examination of some of the facts and statistics show for International property buyers at least things aren’t quite as bleak as the developer who may go bust would have the Spanish government believe. Well that is the view of Nick Stuart managing director of the Spanish property experts Spanish Hot Properties. “The first question one should ask is where are these 800,000 properties to start with and would you want to live there? The reality is that developers who are prepared to price the properties in good locations to sell are selling and selling reasonably well to the international community and the ones who insist on ridiculous prices will struggle to sell these units and wont sell them for 6 years or so. The other factor is one has to discriminate between the International Spanish property market and the local property market. There are a lot of factors that mean the local market will be depressed for a very long time such as high unemployment and wages in relation to property prices. However this simply isn’t an issue for the International property buyer, the majority being cash buyers looking to get great value. Also it is important to understand that only a small percentage of the 800,000 homes are really going to interest the international property buyer. The reality now is there is a shortage of the right type of properties at the right price now in certain areas such as Marbella and La Cala de Mijas in Costa del Sol. As we have stated for sometime there is very much a two tier market at the present time and over the next few months that is only going to get more exaggerated as the International property buyer takes advantage of the once in a lifetime opportunity to buy quality property in Spain at prices that wont be seen again in their lifetime” explained Nick
So will developers stop building completely once they have finished these projects and what is there future with over such a glut of properties on the market place. “Obviously some developers are in big trouble and may never recover and its clear if you build homes where nobody wants to live at the price there currently being sold at nobody will buy them. However well priced property in good locations will sell but it has to be priced well and has to be targeted at a market that will actually buy the properties in question. For example if you could build more property in Marbella town you would have little problem selling it but if its in the middle of nowhere with no immediate amenities then you are going to have huge problems competing with a lot of similar stock. So whilst there is a huge amount of stock to be sold there isn’t necessarily such a huge amount of stock that our international buyers want to buy but enough for them to take advantage of the wonderful opportunities the current market offers” commented Nick.
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