Spain Real Estate News

 Nowhere in Europe has more bargain-basement holiday homes. Yet in spite of falls of between 30% and 50% in some areas, many Britons appear to be waiting to see if prices fall further before the pain in Spain ends.

Though some estate agents and desperate developers claim the recession is over and prices are rising, most market watchers say the reverse is true.

Sales volumes in popular holiday home areas – are half 2006 highs, yet there is an estimated backlog of one million unsold (and many unfinished) houses – some 46,000 in the Alicante province of the Costa Blanca, 30,000 in Valencia, 27,000 in Murcia and 22,000 in Málaga on the Costa del Sol.

Official figures say 32,000 estate agents – or 40% – closed down in 2007, and 15,000 in 2008. Unemployment in Spain has topped 15%, a third of which is blamed on the housing crisis.

House price indices are derided as slow to appear and inaccurate. In addition, they combine sales of mainstream homes to Spaniards (where price falls are large) with sales of second homes to foreigners (where price falls are larger still). A more accurate indication comes from special offers at individual developers and estate agents. Taylor Woodrow, a UK developer constructing holiday homes for foreign buyers in Spain for more than 50 years, is one of many slashing prices. Officially there are 20 schemes with 35% discounts but buyers can haggle further.

Equally startling deals can be found for secondhand homes. Theproperty agent Roan ran a bazaar on the streets of Madrid in June, with some homes discounted by 60% – before prospective buyers even began negotiating.

"There's still a lot of overpriced property. Distasteful as it may be, the best bargains come from vendors in distress. Get friendly with bank managers in your target area; they know who is having trouble paying the mortgage," advises Mark Stucklin, editor of the online advice servicespanishpropertyinsight.com.

Professional buying agents say discerning purchasers wanting the biggest bargains in the volume market should look for completed coastal developments, where the infrastructure exists.

"Refine the search to established developments that are mature and run well. Buying from individuals may be a better option than from developers. Prices may be 30% to 40% lower than last year, and further negotiation is possible," says Rhona Hutchinson of Integrated Relocation Spain.

But Stucklin's website carries an interactive map with some 40 trouble hotspots in the housing market. There are four persistent problems.

First, some Spanish banks are refusing to honour bank guarantees taken out by buyers as an insurance in case their chosen homes are not built in the downturn.

Second, uncertainty hangs over the legal status of many new homes. Some developers did not secure building permits, so 40,000 homes in Málaga are "illegal". In theory, these may have to be demolished, though local politicians are considering an amnesty.

Third, some Valencian region "land grab" problems remain. In the spring, a third European parliament report condemned planning laws that allow developers to build flats on land previously owned by individual householders.

Finally, some problems are caused by bankrupt developers. A recent ITV documentary showed Briton Wally Tynan, who bought a place on the Costa Blanca, dodging exposed high-voltage cables and sweeping sewage that bubbled up outside his home in a part-completed housing estate.

Yet some insist it is unfair to brand the coastal strip a disaster area and every estate agent a crook. Mark Wilkins, a lawyer opening an estate agency business on the Costa del Sol, says: "We've all but seen the back of the worst excesses of the greed that dogged a property purchase here, particularly on off-plan purchases."

Perhaps. There are clearly plenty of bargains to be had across the country and in all sectors. But one uncertainty remains: have prices stopped falling?

Costa del Sol

There are bargains everywhere. A long-standing Marbella estate agency, Panorama, says most homes in that one-time wealthy enclave are down 30% since 2006, with few or no off-plan sales. Michael Moon, an estate agent operating across the whole Costa del Sol, says 40% price falls are the norm and what he calls "cynical projects" (such as flats built near a motorway or overlooking other flats) are not selling at all.

Homes are high quality in the Sotogrande enclave but take an eternity to sell, in spite of discounts. A four-bed, four-bath villa (pictured above) has sea and golf views. Down from €1.25m to €990,000 (£845,000). Savills,www.savills.com, 0207 016 3740.

Taylor Woodrow is a British firm badly exposed to the Spanish market and slashing prices to sell stock. Discounts of 36% or more are available at El Bosque de la Mairena (above, left) a new scheme near Marbella, where flats started at €271,000 but are down to €173,000 (£148,000). Canny buyers will be able to negotiate further reductions. Contact Chesterton Humberts, 020 3040 8210, www.chestertonhumberts.com.

A small studio unit in a new apartment complex in Riviera del Sol, near Mijas in Andalucía, has air conditioning, satellite TV and underground parking, as well as communal gardens and pool. It has just been reduced to €69,000 (£59,000) at www.buypropertyineurope.com.

Barcelona

The party city is not recession-proof. "It isn't solely reliant on construction and tourism and, because of this, the market hasn't suffered as badly as in other areas. Also, there are few large developments. Depending on quality, prices have dropped between 10% and 30%," says Alex Vaughan of estate agency Lucas Fox. "Smaller, two-bedroom apartments are selling better than four-bed ones, say. These take longer to sell, so the prices are more affected."

"Barcelona costs a bit more than Madrid, but there's not a huge difference," adds Rhona Hutchinson of Integrated Relocation Spain.

A four-bed family apartment in posh Diagonal Mar, with private terrace, sea views and a communal gym and pool, is reduced to €725,000 (£619,000). Lucas Fox, www.lucasfox.com or 0034 933 562989.

Mallorca

There is no vast oversupply of new-build apartments, and some hitherto cheap areas have been opened up by new roads, so you have to hunt out bargains. But they exist, mainly because sellers, rather than agents, often set asking prices (and will try different prices with different agents).

The Property Finders, a search agency, says period fincas across the island are down 30%. A three-bed, two-bathroom property being sold by Britons at Santa Ponsa, was €650,000 but is down to €450,000 (£384,000) through Engel & Völkers, www.engelvoelkers.com or 0034 971 69 90 63.

Source: Guardian.co.uk

Grand Designs has reached the Costas and it's changing the shape of the popular Spanish coastline. Buyers who once flocked to the Costa del Sol seeking a classic taste of Andalucia now turn their noses up at colourful wall tiles and Mediterranean hues in favour of a more upbeat look.

'Buyers' tastes on the Costa del Sol are changing, particularly in the more upmarket areas of Marbella such as La Zagaleta or Sierra Blanca,' says Barbara Wood, of The Property Finders.

Conventional marble is out, she says, and solid oak or travertine floors are in, while the old-style, small Andaluz windows, which keep out the sun, are being replaced by floor-to-ceiling glass to increase light and space.

And if you're after wild modernist luxury, the Bolt Property Group builds villas costing from £3.5million within the gated estate of La Zagaleta in Marbella. Extravagance is a theme.

The company's director Hadleigh Bolt, 29, has designed a £27million ten-bedroom mansion which includes a ten-vehicle 'car museum' and a black marble indoor pool.

'Contemporary is the norm now,' says Bolt, whose designs have to comply with La Zagaleta's stringent bylaws, which include no flat roofs, unnatural colours, visible aerials or tennis courts.

There are similar restrictions on the Monte Mayor Golf & Country Club, near Marbella, where Ken and Jackie Brownlee, from Berks, are having an open-plan four-bedroom holiday home designed by Contemporary Villas.

It will include vaulted reception areas, outside 'rooms' including a courtyard set around an infinity pool, and a complete intelligent sound/ light system.

'We saw dozens of more traditional villas for sale which were too rustic for our taste,' says Mr Brownlee. We wanted to design something different.'

Modern design is more accepted at La Quinta in Marbella, where one boat-loving owner has designed his home like a ship, now on sale for £1.67million through Contemporary Villas.

'The steep terrain suited digging out more rooms below ground level,' says the Dutch vendor of the 500sqm, two bedroom glass, steel and concrete villa with glass-bottomed pool.

On the Sotogrande estate, near Gibraltar, one German couple have created a red Casa Mexicana - complete with a glass-case travertine marble courtyard - on sale through Contemporary Villas for £3million.

But Robert Green, director of developments for Cluttons Resorts, reminds buyers or self-builders that 'expressing too avant garde a taste can make the property difficult to sell'.

A prime example is the eccentric Finca de la Belette in Marbella, a nine-bedroom house that mixes Moorish design and futuristic features and includes huge iron gates from an old French castle and Italian renaissance columns.

'It took a long time to sell. No one could quite imagine living in it,' says Green. But no doubt its eventual buyers are relishing their surroundings. And can rest assured that there's nothing else quite like it.
 

Source: The Daily Mail 

The number of houses sold in Spain fell 25.5 percent in June compared to a year earlier, marking the 18th straight month of decline, the National Statistics Institute said on Wednesday. 

The fall in June sales to 35,372 units compared with a decline of 32.2 percent in May versus the same month of 2008, and a 47.6 percent drop in April, the largest drop since the sales decline began.

Source: Forbes

 

 Environmentalists are warning that many protected coastal areas in Spain are under threat from property development, some of which they claim is illegal.

A judge in Murcia has ordered the developer of the Trampolin Hills Golf Resort to return more than 60,000 Euros in part payments to a client whose home was never built, reports the Spanish press. The developer will also have to pay tens of thousands of Euros in interest payments and costs.

The claimant, Juan Pedro Férez, signed a sales contract and paid Trampolin Hills 30,000 Euros in February 2006, having paid a deposit of 3,000 Euros to reserve his property in September 2005. He followed up with another 27,000 Euros of stage payments during 2007, expecting to pay the final 40,000 Euros at completion, no later than 20 months after signing the sales contract. But building work at Trampolin Hills has now ground to a halt, having never even begun on the property that Férez hoped he would now be living in.

Read the rest of the article at Spanish Property Insight

 Just as investors pluck up the courage to once again dip a toe in the Mediterranean housing market, along comes a killer flu pandemic that keeps bargain-hunting foreigners thousands of miles from a purchase.

Earlier this week, Palma Property Auctions – one of Spain’s biggest holiday home auctioneers – said rising swine flu fears among clients had forced it to shelve its eagerly-awaited summer sale.

 “We had nine concrete cases of people who called us to say they wanted to have a look at a property and possibly take part in the auction, but they were not going to because of swine flu,” Daniel Westerlund, a spokesman for Palma Property Auctions, told Reuters.

“A lot of our prospective buyers are German, and in Germany there’s a huge amount of media attention directed at this. Those are nine concrete cases, how many more there are on top of that, I cannot say,” he said.

Westerlund said fear of possible exposure to the virus during the plane ride to Spain was the chief cause of investor nerves. He was less convinced Spain’s worsening economic climate had fatally dented interest.

He said his auction house was thriving despite the well-documented Spanish housing market collapse because buyers and sellers wanted fast and efficient ways to transact non-distressed real estate.

“The vendors were obviously hugely disappointed, as we were, because we were looking forward to a successful auction. We were expecting sales volumes of between 3 and 5 million euros,” he said.

But swine flu or no swine flu, Spain’s once-booming housing market is on its knees and grim economic portents suggest a sustained recovery might be months, even years away.

The number of houses sold in Spain fell 32.2 percent in May to 34,012 units compared with a year earlier, marking the 17th consecutive month of decline, data released by the National Statistics Institute earlier this month showed.

While swine flu may have forced Westerlund’s buyers to flee, the underlying problem in the market is a lack of investor confidence. One might argue that the similarly potent bird flu failed to affect investment turnover at the peak of Mediterranean property boom, even though the migration paths of some infected species stretch right across the region.  

The vast majority of foreign buyers are more concerned about making the right investment call at the right time than catching a bout of swine flu.

Until they want that luxury Spanish bolthole more than the security of a tidy bank balance, Spain’s real estate depression looks set to linger on.

Source: Reuters