Malaga, Spain (PressExposure) November 25, 2008 -- Its been a very interesting and difficult year to date for the Spanish property market with the Mediterranean Costas feeling the worse of a depressed market and the Balearic Islands tending to get the best of it according to Nick Stuart managing director of Spanish Hot Properties SL. âEveryone knew that this year was going to be a bit of a struggle but no one could have foreseen the collapse of UK and American banking systems and the world wide crisis that has only made things worse for Spanish propertyâ explained Nick
âEven up until May things seemed to be on an even keel with the likes of Mallorca not even feeling the pinch of the Spanish property downturn and banks were still keen to lend. Mallorca has always had a huge advantage over the Spanish Island for several reasons with the two main reasons being the restricted planning laws and Mallorca not really having an over supply issue like they have in Costa del Sol and Costa Blanca. Things started to really bite during the summer months and even property bargains started to appear in Mallorca for the first time in a very long time. Then with the events outside world impacting even further on property in Spain things have turned quite bleak and outlook for the majority in 2009 is not particularly encouragingâ Nick explained. âItâs a very strange world when your money is safer in a Spanish bank than a UK bank, I personally never thought id see the dayâ said Nick
A recent report stated that Spanish property prices need to fall by 23% to bring housing affordability back to its long term average, and return the market to normality, argues a new report out today from property consultants Aguirre Newman. The report asks how much average Spanish property prices have to fall to bring the cost of housing in line with the long term average of 30% of household income. Assuming mortgage financing of 70% for 30 years with a rate of Euribor (4.5%) plus 0.5%, for a property of 75m2 and a disposable annual household income of 21,259 Euros, the report concludes that prices must fall by 23%. Obviously this is just one report but for the Mediterranean Costas the future is even more bleak. The price of property on the Spanish Mediterranean coast, not including social housing, fell by 8.9% over 12 months to the end of October, according to the latest price report from Tinsa, one of Spainâs leading appraisal companies. As was to be expected, the cost of property on the coast fell more than the national average, which was down by 6.5% in a year. Coastal areas tend to be dominated by the second home market, which traditionally more in an economic downturn. Property on the coast is also suffering from a strong Euro making Spanish property more expensive for British buyers. The report focuses on primary housing, so the conclusions do not necessarily apply to prices for second homes, especial in coastal areas. Second homes are a luxury that tend to suffer more than primary housing in economic downturns. Price declines of close to 9% will not come as a shock to the holiday home market in Spain, which previously had enjoyed years of surging.
So what does this mean for Spanish property buyers and sellers going into 2009? âNothing has really changed its just compounded itself in that it is even more of a buyers market and even a worse time to sellâ claimed Nick. âSome developers are now cutting there prices by as much as 40% to sell and if you want to buy a one or two bedroom apartment on the Mediterranean Costas then 2009 is the year to do it as long as you make sure you are getting the property bargain you should be getting. The market will drop further in 2009 but the opportunity to pick up Spanish properties at incredible prices will be at its greatestâ confirmed Nick
Anyone wishing to get the right advice about buying Spanish property in 2009 should contact http://www.spanishhotproperties.com/.