Spanish banks prepared to lend over 100% on their own quality stock
Spanish home loans have fallen for the 14th consecutive quarter. Data from the National Statistics Institute out in December 2011 showed that October lending was 43.6% down on the previous year and the lowest monthly figure since 2003 – beating even 2008, the year the ‘bubble burst’. Yet banks will lend more than 100% on their own stock to high quality borrowers and Feltrim International has access.
Adam Cornwell, Managing Director of Feltrim International comments, “Whilst Spanish mortgage lending is not expected to recover in 2012 due to high unemployment and limited bank funding, financial institutions have to optimise their balance sheets. Recent reports from a leading risk adviser say banks have around 30 billion euros-worth of property that they can’t sell. To incentivise quality buyers they are prepared to offload these homes at rock bottom prices and with the highest mortgages. At Feltrim International we have a luxury beachside development close to Marbella at 50% off the developer’s 2007 price plus a 110% mortgage option with two years interest only – all the more incredible given the financial crisis.”
Of course Feltrim International is not interested in Spanish property in the middle of nowhere or the cheek-by-jowl cheap coastal homes – both of which are worth literally nothing - it is the desirable areas that are proving to be most popular with repossession hunters.
Adam continues, “If a bank is prepared to lend all of the money, more than 100%, on a project that has fallen to 50% of its value five years previously then it must have the confidence that first the market has reached the bottom in this particular location and second the property will regain its value in the not too distant future. Ironically we are now in a situation where the best units in these marked-down resorts are selling fast, just like in the heady days of the property boom when the best off-plan units were snapped up fast – albeit now they have the peace of mind of something complete and tangible. Investors can buy using very little, or none, of their own capital with the risk being entirely taken by the bank – this simply does not happen in any other distressed market in the world. As the phrase goes - if you see the bandwagon, you’ve missed it – so best to act early.”
Marbella is as “safe” a location as you’re going to get in Spain. It already has a fantastic infrastructure, licensing issues have been resolved under the new urban plan (PGOU) approved in 2010 and the tourists come in a steady stream attracted by more than 70 golf courses, year-round sunshine, endless beaches and no frills flights. In 2009 RyanAir established a base at Málaga Airport and the carrier now operates 39 routes whilst over recent years Delta Airlines has added a direct flight to JFK, Saudi Arabian Airlines direct to Jeddah and Riyadh and significantly a selection of airlines, including Aeroflot, have introduced direct flights to the several Moscow Airports. Marbella now has true global appeal.
Perhaps the single best piece of news in Marbella for 2012 is the announcement that a 109 million euro plan to expand Marbella’s fishing port has been given the green light. The long planned transformation of La Bajadilla into one of the most luxurious marinas on the Mediterranean can now take shape after the Junta de Andalucia, Marbella town hall and the Nasir Bin Abdullah & Sons Consortium signed a contract allowing construction to begin. The plan, which is expected to take four years to complete, includes a commercial area of 23,000m², a five star hotel and three times the current number of moorings including access for cruise ships and megayachts. The mayor of Marbella, Angeles Munoz, said “it is a great opportunity not to be missed.”
The new Rajoy Government may have to implement some unpopular policies to drag Spain out of economic turmoil, it has already announced an 8.9 billion euro budget cut across all Government departments, but the long-term result will be a stronger more optimistic country and the market will return to normality. Meanwhile property is cheap, tourism is recovering and the investment opportunity is there for the taking.
On the Market - Soto Serena, nr Marbella, Costa del Sol
Designed by signature architect Melvin Villarroel who has been responsible for many of Spain’s iconic hotel, shopping and residential projects; Soto Serena sits in over 34,000m² of beautiful landscaped gardens with large freeform swimming pools, a feature waterfall, fully equipped gymnasium and sauna and a bar/restaurant area. The apartments are fully furnished to high specification, have large terraces with superb views, fitted hot and cold air-conditioning, parking and storage and immense rental potential. Ideally located just 300 metres from the beach with beautiful Mediterranean and golf views, the gated community of Soto Serena is just 12 minutes drive from chic Puerto Banús and even closer to nearby Estepona with its shops, bars and fishing marina. Local agents project that 16 weeks (high season) rental income should keep the investment cash neutral in the first five years leaving 36 weeks personal use at no extra expense. We are able to offer an incredible finance deal on this luxurious development to include a 50% discount off the developer’s price plus a 110% mortgage option (including closing costs) with two years interest only at rates from 0.25% plus Euribor.
Price 184,000 euros (approx 152,000 GBP) for a one bedroom penthouse (was priced at 368,000 euros in 2007 – half price)
For more information, visit feltriminternational.com.
