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Spain: The Boom is Over... Now Opportunity?
Spain has enjoyed a property boom over recent years and thankfully this has come to an end. Generally, prices have stabilised, in some places they have fallen and in more popular locations, they have risen, but at a slower and more sustainable rate.
Let's firstly dwell on the market negatives:
- Spanish developers have contributed to an oversupply.
- Investors purchased "off plan" in the hope
of making a quick fortune by re selling before completion,
but unable to do so at the inflated prices they hoped
for, some are seeking rentals and some are reducing prices
to well below mortgage values.
- Many developments were cited in new areas, without
mature infrastructure and thus there is a limited resell
market.
- Some owners are seeking astronomical rents and finding
their properties remain without tenants.
Conversely, there are the following market positives !
- Tourism continues to increase and Spain remains the
number one destination for the UK market.
- The property market is largely boosted by many other
nationalities, including the Spanish themselves, who since
joining the EU, have enjoyed increasing personal wealth.
- Low cost airlines make Spain the easiest overseas
destination to reach, for many nationalities, with flights
arriving daily from many destinations.
- The Andalusia region remains the southern most area
within Europe and thus the climate remains the best in
Europe, for those that prefer sun to rain!
- The mortgage market is probably the most mature amongst
the overseas destinations in Europe, with interest only
mortgages up to 80% of the purchase price. Additionally,
the banks are waking up to the opportunity to sell re
mortgages to this market, thus for investors there are
opportunities not only for Fly to Let purchase, but long
term re finance too.
- There has been an extraordinary growth of Europeans
migrating to Andalusia, creating a healthy long term letting
market. This is borne out by the growth in International
Schools operating in the leading areas.
Remember, just like the UK, Spain is a vast market,
with over 1000km of coastline, so it is firstly important
to recognise the importance of location. Prices can be lower
in the more barren areas, such as Murcia, but of course far
fewer are attracted to these locations, hence the prices.
Our focus is on Andalusia, which enjoys both the best
climate and geography, with attractions for sun worshipers,
skiers, golfers, nature lovers and many more. With mountains,
beaches, countryside, cities and mature infrastructure, it
really does have something for everyone.
When researching property, we always like to determine whether
the deal "stacks up". What we mean by this is: will
the rent cover the mortgage and is the property in a location
where the long term growth fundamentals are positive. In Andalusia
there are many opportunities to achieve this. By way of a
recent example, our client was seeking an apartment near to
the Port of Duquesa, with a view to letting it for the next
5 to 10 years. Duquesa is a stunning location, with the marina
being the centre of activity. A leading developer in the area
had a few second line golf apartments with prices starting
from 285000e, but we were able to secure a front line golf
apartment, with sea views privately for 224000e. The mortgage
valuation was 300000e and we secured a 210000e interest only
mortgage, thus the deposit was only 14000e! The mortgage cost
is approximately 900e per month and the rental is estimated
conservatively at 1100e per month. However, our client likes
the property so much, he is intending to use it part of the
year and holiday let the rest of the year!
We are not promoting specific property, instead we are focusing
on the opportunity. We have extensive knowledge of this
area and have developed specialist contacts allowing us
to access individual developments, or property that meets
strict criteria and which is available at the very keenest
price.
If you are considering a Fly to Let property in Spain, then
all you need do is talk to us and we will gladly provide
advice and guidance and steer you to our specialist contacts.
Finally, here are a few tips when searching for an appropriate
investment:
- Location is crucial.
- Buy below the mortgage valuation.
- Secure finance in principle, before looking for
property.
- Ensure the property "stacks up".
- Be clear in your mind as to your objectives
- Remember property is a long term investment.
- Get advice: Call us FREE on 0800 075 5566
 Fabulous
property, 84 sqm + 22 sqm terrace = 106 sqm total, makes this
a very large and luxurious feel one bedroom apartment, walking
distance to the Guadalmina golf club. The vendor of this property
has an urgent sale to complete on in Madrid dependent on the
sale of this apartment and is prepared to sell for a reduced
minimum price of 218,000 euros to a fast buyer, the previous
buyer had a mortgage valuation of 305,000 euros but failed
to show correct income.
This property offers good rental potential as well as a
lovely permanent residence or holiday home. Close to facilities
and only minutes drive to San Pedro town and Puerto Banus
Marina. Deposit needs to be put down in weeks to secure
this property.
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