Spanish property market begins its price-driven recovery
Spain’s National Statistics Institute reported on 13 April 2010 that house sales have risen at their fastest rate since records began in 2007. February’s sales were up 18.7% on the previous month with 51,343 properties changing hands. Is this the first real sign of recovery? Costa Cálida based estate agents Mercers certainly think so.
Chris Mercer, Director of Mercers, comments, “I can corroborate that sales are up in Spain. Mercers’ sales were in double figures for March, some feat for a petite two-office agency, and we’re on course for much of the same in April. However, this is definitely a price driven recovery. Values are still falling and it’s bargain property that is changing hands. Also, a good 50% of our sales are now attributed to Spaniards. The British buyer remains somewhat cautious.”
Chris continues, “Vendors who want to dispose of their homes rapidly need to be realistic on pricing then a sale will not be too far away. We’ve facilitated some unprecedented deals recently. In March we sold two two-bedroom terraced villas on the Costa Cálida golf resort of Camposol for 36,000 euros and 38,000 euros respectively. This is perhaps 20,000 euros or more below asking price. Similarly, from our Costa de la Luz office, we sold two three-bedroom townhouses in the typically Andalusian town of Lebrija for 100,000 euros furnished and 95,000 euros unfurnished. Again, these would have been valued in excess of 150,000 euros four years ago.”
British vendors still have the strength of the euro to their advantage if repatriating funds back to the UK. Mercers has a number of Spanish buyers lined up for property in Lebrija but each has a fixed budget of 100,000 euros in mind. British vendors were emailed and asked if they’d like 88,000 pounds in their bank account. Many agreed as if they’d sold four years ago for 150,000 euros they’d only be making 103,000 pounds (1 euro was worth 69p in April 2006 versus 87p today) so really they’re only missing out on 15,000 pounds. Fairly easy to swallow if the motivation to sell is high.
Chris finishes, “Some of this sales activity could be attributed to the Spanish being very much aware of the IVA (VAT) hike scheduled for 1 July 2010 which will add to purchase costs. I expect the Brits to return to the table after the General Election, perhaps with a new Government, when the mood will undoubtedly become more positive and confidence will come back. The increase in sales will continue in 2010 followed by substantially more volume in 2011. However, good news for buyers is don’t expect prices to start rising too rapidly – near 20% unemployment and cautious bank lending will put pay to that.”
Two on the Market:
FOD53 ‘Fortuna’ - Camposol Golf, Costa Cálida, Mazarron
Two bedroom one bathroom detached villa with private 7m by 4m swimming pool for less than you would pay for a fractional home. Set on a plot of 350m², the property is fully furnished to include white goods and has an underbuild with potential for development. There are fabulous mountain views and the resort has an 18-hole golf course, four star Spa hotel and plenty of shops, restaurants and bars on site.
Recently reduced to an unbelievable 89,950 euros (78,800 GBP).
VEJ013 Townhouse – Vejer, Costa de la Luz
Brand new 117m²-built three bedroom two bathroom townhouse with fully fitted kitchen and off-road parking set at the top of one of Andalucia’s finest ‘pueblo blanco’ – Vejer de la Frontera. Large bright ‘bonus room’ basement, use of communal swimming pool and swift, direct access to the wonderful unspoilt sweeping sandy beaches of the Cadiz coastline.
Heavily discounted to 160,000 euros (140,300 GBP) the cheapest property on site.
For more information, visit spanishproperty.co.uk.
