Guide to buying a property in Moraira or Javea, Spain
More than a million homes were sold across Spain in 2006 at the tail end of the Spanish property boom. The mortgage crisis that followed lowered demand and caused home prices to plummet. Between 2007 and 2011 property prices dropped by as much as 30% but in spite of this, the market enjoyed a fairly steady activity during this time.
In 2012, 320,000 homes were sold across Spain and whilst this was only about a third of what was sold in 2006, clearly the Spanish property market was still clinging to life. Valencia, in particular, enjoyed robust sales activity in 2012, with property in the areas of Javea and Moraira still attracting large numbers of northern European buyers. It appears that 2013 will continue this upward trend, with exceptional first quarter sales figures.
“New Unsold” Properties
While price reductions have happened across the board, newly-built, mass-produced developments have been hit the hardest. Prices for units in these developments have dropped by 70 percent or more in recent years. A rash of foreclosures means many of these units are government- or bank-owned, and many large complexes are still virtually empty. A recently-built three-bedroom villa can be purchased at an extraordinarily low price, often less than 65,000 euros. These “new unsold” properties are endemic in resort areas from the Costa Blanca to the Costa del Sol, and buyers have been scared off by sensationalized headlines proclaiming that the property market in Spain is dead.
Property Outlook for Moraira and Javea
The situation has fuelled news headlines but it has not affected the whole of the Spanish property market. Nevertheless, the northern end of the Costa Blanca has seen a significant drop in prices. Eurozone buyers can find excellent deals, although British buyers, who have long been the main purchasers of property in Spain, will not enjoy as much of a break due to the devaluation of the pound against the euro.
We spoke to Anthony Bloom, an expert property finder and owner of estate agent website Spanish Property Sales within the areas of Moraira and Javea. Anthony said “In our experience a lot of villas priced between 295,000 euros and 395,000 euros tend to be 50,000 to 100,000 euros over priced in comparison to some of the better quality properties in Spain available at this price level. So unless a property is situated in a great location and been completely renovated to a high standard, many properties are still too expensive for today's buyer. Many villas have had price reductions recently but unfortunately do not reflect what's happened to the market.”
Realistic Expectations are Key
In this market, both sellers and buyers need to keep their expectations realistic. For sellers, reasonably priced, attractive and well-located homes still sell quickly. Those that are overpriced, poorly situated or lacking in amenities may linger on the market much longer. Sellers should be willing to recognize when they might need to make improvements or drop their prices.
Most buyers still expect to get a “bargain” in this property market, and those expectations can exceed what’s available in their price range. Buyers need to be willing to compromise on what they expect for their money. About 90 percent of buyers are looking for homes priced up to about 300,000 euros. Property that is priced within this “affordability band” is still selling well.
Above this price point, there are many fewer buyers. Sellers at this level need to be creative and flexible in order to sell their property. For instance, because the average Javea buyer is over 50 years old, a beautiful, bespoke villa that is difficult to access because of steep stairs may sit on the market longer than expected, and the price may need to drop accordingly.
Is There a Spanish Property Crisis?
Prices have dropped considerably since the high point of 2006, but the market is still active and lively. If you have property for sale in Javea or elsewhere in Spain, it is important to keep your expectations realistic, set a reasonable price and be willing to negotiate for the greatest chance of a successful transaction.
