Spanish homes attract bargain hunters

There is still plenty of interest in prime Spanish property as savvy buyers eye up the bargains along the Costas that are on offer from banks, must sell developers and hard-pressed private vendors. Sales of 1,000 homes a day are still being recorded by Spain’s National Institute of Statistics (INE).

Sales peaked in 2007 at an astonishing 600,000 sales a year, more than France, Germany and the UK combined and have declined since then due to over supply and the international credit crunch. Currently, sales are running at around one third less than the regular 50,000 a month.

The latest activity levels in Spain’s housing market fell by 37% in November 2008, compared to the corresponding month in 2007, according to according to INE. Figures show that 32,792 residential properties were sold in November, down from 51,753 a year ago. On a year to date basis, 11 months to September, sales are down by 33% for the country as a whole, compared to the same period last year.

In the most popular areas like Costa Blanca, Costa del Sol and the Balearics the falls are greater, probably due to developers resisting big price reductions, a stand that is expected to collapse this year as funding banks put the pressure on to sell off the homes started 18 months ago and now nearing completion.

With 1,000 sales a day the Spanish property market is clearly still offering good value for local and international buyers and there are still low cost mortgages available to British and other overseas buyers. Prices are back to the levels of nearly five years ago and there are bargains due to Spanish bank repossessions or because of developers’ new dash for cash as their development loans become due.

The best deals are within 800 metres inland of the Costa Blanca beaches, where a heady mix of key ready completions (with extra spec and incentives) and prime site resales (fully furnished with appliances and established neighbourhoods) can be snapped up at prices 50 percent below current valuations.

This coastal strip is attractive with sandy beaches and ranged behind are bars, restaurants, shopping and public open spaces that are the essentials of holiday and full-time living. Specialists like www.propertyinspain.net have 1,000s of properties in these areas which they define as “beachside” because the beach is the biggest influence on the location and asking prices. There are also bargains in “golfside” locations, with rentability almost as good as “beachside” apartments.

Bargain hunters are registering daily with the website and they receive useful advice and fact sheets on how to secure the bargains, some of which come with guaranteed 80% mortgages because of their excellent loan to value ratios.
Some Spanish banks are offering interest rates to Brits planning to buy in Spain and saving up for their deposits a generous 5.40% interest on three month deposits.