IMF report boosts Spanish property

The IMF’s latest verdict on the Spanish economy, which is overall better than the one it presented on the state of the UK, suggests there will be recovery in 2010 after a decline of three percent in GDP this year.

That’s good news, as is the information that housing starts are down 20 percent, and that many of the empty, newly completed homes could well finish up in the rental sector because the Spanish Government is offering young couples a useful rent subsidy.

Take away the housing surplus, and demand – more than 300,000 sales a year currently - should begin to drive up prices again to the benefit of existing owners and those planning to purchase a property in Spain this year. Current prices are 30-40 percent below the peak and are unlikely to fall much further because sales are getting brisker at the present level.

Would-be buyers, hanging on in the hope of cheaper prices, may just be a mite disappointed. “Cheap” means “cheap” and rarely reflects the premium aspects of a property which are location, location, location. “Cheap” away from amenities like beaches, decent restaurants, good access to transport, remains just “cheap”.

Conversely “good value” would be a price paid for a property that was well-built and came with all the attributes that would benefit the new owner and help them to sell it when necessary. “Buy to sell” is the mantra of US realtors, and they are the best in the world.

It is currently possible to marry “good value” with a “good deal” in the Spanish real estate sector, as developers come under the cosh from their development funding banks. They are being innovative in their new beefed-up marketing activities.

One of the leading established property sources in Spain has offers that include “try before you buy”, 90 percent mortgages, 3-year rental guarantees, 40 percent discounts, purchase in sterling, view trip cashback vouchers, legal security paperwork etc.

Unlike many in the property boom years, these deals are often underwritten by the very bank putting the pressure on the builder/developer to generate the cash to finance their loan.

Working together in that way adds a lot of credibility to the offers and an incentive to book one of the summer flight bargains from Ryanair or Easyjet and for buyers to see for themselves what great value for money they can bag for themselves in the New Spanish Property Market.

They might find, as the IMF did, that life's looking a lot better in sunny Spain.