At first glance it’s tricky to work out how buying a villa in Spain in 2000 for €122,000 euros and selling in 2010 for €85,000 euros can be seen as anything but an unmitigated disaster. But actually the client’s getting a bargain and the vendor’s making a profit. How? Answer - the vendor’s British.
Spain’s Costa Cálida, in particular the Camposol Golf Resort promoted by real estate agent Mercers, is currently replete with vendors returning to the UK who have the strength of the euro to their advantage. This is making the local property market more price sensitive than ever with asking prices tumbling yet still not to the detriment of the vendor making a good profit.
Take the above-mentioned example. Mid-August 2000 Mercers was selling three bedroom three bathroom detached Neptuno-style villas on Camposol Golf for €122,000 euros. The exchange rate was a heady €1.65 - £1.00 so this worked out to be an equivalent of £73,939 pounds. If the same villa was sold at the same price tag today (€1.12 - £1.00) the vendor would get around £108,708 – that’s a gain of almost £35,000. So, the reality is that they could comfortably drop the price to €85,000 euros (£75,735), way below its value a decade ago, and still be a few grand better off.
Chris Mercer, Director of Mercers, comments, “Some commentators have held real estate agents responsible for artificially driving prices down but the fact is we live in a market economy. In 26 years in the business I have never experienced a Spanish property market that is so price-sensitive and for that we can blame British monetary policy and a weak pound, the reluctance of banks to lend and an enduring global recession. I would of course much rather be selling Neptuno villas for 180,000 euros plus, Mercers would earn more commission, but motivated vendors need to be open to offers and buyers be aware that genuine bargains are available if they look in the right places.”
The good news is that there is still a pent-up demand in the UK (and for that matter in the rest of Europe) for Spanish property. Both Rightmove and Primelocation put Spain at the number one spot in their most searched-for destinations in November 2009 taking 19.64% and 30% of the total respectively. If these would-be Spanish homeowners choose Costa Cálida they will be able to negotiate on price, pick the location and style of house they want and be secure in the knowledge that they bought somewhere near the bottom of the housing market.
On the Market
NED45 – Neptuno Villa, Camposol, Mazarron
http://spanishproperty.co.uk/
Three bedroom two bathroom 86m² detached house set on a beautiful 650m² landscaped plot in the envied Camposol golf resort on Spain’s Costa Cálida. The property has many extras from a fully fitted kitchen with white goods to a huge underbuild with potential for office, cinema or gymnasium. The garden has an 8m x 4m pool and there are stunning mountain and countryside views from the terraces.
Price 165,000 euros
Contact Mercers on 00 34 968 199 188, UK Local Rate 0845 017 7805, email ccsales@spanishproperty.co.uk or visit www.spanishproperty.co.uk.
Winner of Best Real Estate Agency Spain (Four Star) in the CNBC-sponsored European Property Awards 2008
Winner of Best Real Estate Agency Spain (Four Star) in the CNBC Arabia-sponsored European Residential Property Awards 2009
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