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The last couple of years have been like manna from Heaven for the doom merchant journalists and emerging market pundits as it appeared that the Spanish property market was at risk of chasing its tail after double-digit years of growth.

Well let's face it the post Euro boom is over. The fall out of corruption and planning scandals is now being well managed by several new brooms in the local Town Hall’s and, you know what, the Sun is still shining!

The Spanish property market has rallied well from some property companies dabbling in an exercise of share price manipulation that sent stock market investors scuttling for cover amid talk of a property crash.

Newskys.com has reported that Spain "is still a promising long-term investment." It goes onto report that a recent survey by lending giants GE Money noted that house prices in Spain were expected to rise strongly during 2008. "It is the constant trend of the British desire to move to Spain that secures the western European market," the report stated. It also identified a belief among respondents that Spain offers a safer investment than can be found emerging markets.

We also believe that an investor can take comfort from the fact that 18% of Spain&'s GDP is linked to the housing market and any significant downturn - if any - is likely to be corrected by positive government action. Predictions by major banks for growth this year of circa 6% doesn't seem unrealistic.

So is it only Brits who are buying in Spain?

The core market continues to be our friends from the UK and Eire. They tend to know Spain and are very clear about what they are seeking and why they want to be in a specific location. They have benefited from the experiences of many friend and family that have beaten a trail to Spain for over the last thirty plus years – many are second generation purchasers.

A recent client has been coming to an area East of Marbella for over ten years on a variety of holidays. As his business has now done well he's able to buy a splendid apartment for the enjoyment of his wife, children and wider family. There was only ever one pueblo in his sights – he knows the local restaurants, shops and services as he knows those in his hometown.

Colleagues are reporting that buyers are buying but they are often taking longer to arrive at their decision - because they are really doing their homework. They have heard of the planning woes of recent years, they know of properties threatened with demolition and are resisting making the same mistake as previous purchasers.

We are also noting that buyers are becoming very wary of the Inspection Flight type estate agent who seem to be focused on directing potential buyers to those developments they have "selected". These locations may or may not deliver the buyer value for money. They may well deliver the best returns for the sales agent. The sales commission being paid to the sales agent by the developers/promoters of certain developments may well be the highest.

We have also heard tales - and would be are staggered if they are true - of sales agents virtually holding potential buyers hostage in their hotel during their three-day Inspection Flight trip for the fear of losing out to another sales agent should the potential buyer stray elsewhere.

On the Costa del Sol, the French speaking buyer has arrived as a large group over the last couple of years. We have clients from Quebec and mainland France. As a barometer of their importance a new coffee table magazine, "Café Crème", has just been launched an its clear that a plethora of existing businesses already have multilingual competence to deal with this "new" market.

We are contacted weekly from sources in the USA who have detected that our American cousins have become increasingly interested in seeking out high quality investments outside the continental US. Southern Europe is proving to be an excellent new location for their interest. Many from the US, particularly Californians, who may well have some Spanish language experience, are seeing the Costas del Sol and de la Luz as presenting attractive Old World charm. Others with business activities in Europe are able to be with two to three hours of major European cites so purchasing a well managed property in Spain is a comfortable decision.

Jeff D. Opdyke, in his recent article for The Wall Street Journal (13.07.07) notes "These days, real estate investing is an international proposition." He reports the comments of a local specialist as saying that "The reasons Americans tell us they're buying (in Spain) are the same reasons we hear from all over the world: they don't want all their eggs in one basket!"

On Spain's Costa del Sol, keen - and even in some cases distress - pricing in a "buyers market" combined with excellent local property management delivers new investors the potential to realise some rental income whilst they sit out the cyclical nature of the this market in terms of capital growth.

Locating the right property can be a time consuming and often daunting task. There are a huge number of estate agents that have their own property listings - which they are keenest to sell - and many are members of various multi-listing services, which carry listings from other agents. The difficulty is that whilst agencies may be members they are likely to cherry pick properties they chose to list communally.

Take a tip - finding the right property and negotiating hard to get it for the price you are willing to pay is probably not as easy as it is may be in your home market. Seller's expectations are often at odds with the market and may well have been fuelled by unreasonable valuations. You'd be well advised to seek a competent negotiator to carefully conduct your
ground level negotiations.

Specialist "buyers only" teams - a model developed in America - are starting to emerge in Spain. They tend to be well versed in the local market, have their finger on the pulse as to available stock of properties - whether new, recently completed or "re-sale" - and can save eager purchasers a great deal of time and money in seeking their ideal property at a fair price.

Mark FR Wilkins
Mark FR Wilkins
The Rights Group SL
0034 600 343 917

 The Rights Group 

Please note that the information provided in this article is of a general interest nature and intended as a basic outline only. You are well advised to contact a professional for advice specific to your circumstances. Nothing contained in this article should be seen or taken as the writer or publisher providing legal or financial advice.

Posted 18JUL07