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 Is it the right time to buy?

Nobody can say 100% whether now is the right time to buy, speculating that property prices in Spain have reached the lowest possible level. Many experts have failed to predict this accurately since 2009-10. The fact is, prices have been dropping since 2007 and the average drop on the Spanish coasts is about 34% whereas in the cities, it is around 30%. In addition, there is a margin of negotiation for buyers to secure a lower price than the asking price. We would definitely say that this is the right time to search for properties in Spain since there are already excellent bargains to be found there. It is certainly a right time to buy, if you are serious about buying now.

Has the market touched rock-bottom?

Again, that is difficult to be 100% sure about, but we believe that with the general financial pressures of the Spanish economy, and the financial reforms that were adopted in early 2012, it is very likely that during 2012, the housing market will reach its lowest, in price terms. It is also unlikely that the property industry will recover in 2013, because the economy will take considerable time to re-stabilize. In other words, prices shall probably stay low for a protracted period.

What sort of market are buyers facing at the moment, if they want to buy?

For sure, it is a buyer’s market. 10-12 years ago it was very difficult to bargain on price, since the market trend, was ever-increasing price rises – ‘if you do not buy now, in 3-6 months, the price will be 5%-8% higher, or even 10% more expensive…’. That was the belief, and so any asking price was accepted. But currently, the situation is the opposite: now it’s a buyer’s market rather than a seller’s. Presently, the large supply of properties in the market, is causing prices to decrease: large supply + low demand = lower prices. In addition, the financial problems that Banks and Savings Banks are facing, due to their large property stock, is forcing them to release more and more assets into the market at lower prices. This also increases pressure on private sellers who are now competing on price with the discounted Bank stock.

In this scenario of oversupply, do I still need an Estate Agent?

Your Estate Agent is your ally. We encourage you to contact an agent to get advice, provide buying options and arrange viewings, to make your life easier and save you time and money during the buying process. In this distressed market, there are many professional agents, however, it is very important to choose the right one for you.

Should I be sceptical about agents and developers?

Have you watched “Cowboy Developers” on Channel 4, in the UK? If so, you know that everywhere there can be sharks. Bad press in the UK tarnished the Spanish market during the boom of the 2000s. Now, the Spanish market is becoming more transparent. Professionals are driving the market and substandard agents and developers had to close or run away when the bubble burst. Always obtain good references!

 The properties for sale in Spain that end up successfully in a property purchase are falling, but donations and inheritances are at their peak.  Opposite the year-to-year fall of 29.1% sales that was registered in the two first months of the year, inheritances and donations of homes have increased by 8.7%.

 
 
From January 2012 to February 2012, sales have plummeted to 63,832 units, compared with 89,981 during the same period in 2011.
 
On the contrary, the 27,362 homes transferred in the form of inheritances and donations in the two first months of 2012 suppose superior growth to the 2,000 units in the last year and they mark a maximum since the start of the series in 2007.
 
 

Transfers of Homes represent 21.3%

The total transfers of homes through inheritance and donation has not stopped increasing and they have already entailed 21.3% of the total transfers in the two first months of 2012.
 
This implies that in relation to 2007, when the series started, inheritances and donations of homes have practically doubled their weight in the whole of home transfers.
 
 

The main reasons

It’s difficult to attribute this boom of inheritances and donations of homes to one factor, although one can point out various motives. Read the main reasons for property in spain inheritance rocketing
 

 pain is a great place to live and be visited. The alluring country attracts millions of holiday-makers and new residents from overseas, every year. Whoever decides to make the move to Spain, either permanently or for long periods, has to consider whether to buy or rent a property there.

 
Ideally, you can buy and keep your property for yourself, but for many holiday makers and expats wanting to live permanently in Spain, it can seem difficult to afford. That is what Spaniards try also now,  vender piso a extranjeros (in Spanish), which mean to try to sell apartments to expats. But expats should take into consideration extra expeses.
 
 

Spanish bargain hunters

Low prices appear very attractive in Spain, especially on the coast, and sub-prime properties, as investments in the cities. However, it is not all about the buying price, but also depends on whether you can get a mortgage, and what kind, and there are additional costs in the buying process (which usually comes to 10% in Spain).
 
There are also insurance costs and yearly expenses that include “service charges” and Council Tax (“I.B.I.”). For most of us, to buy in Spain is a question of affordability, and having the right strategy, in order to make it affordable.
 
 

Property prices keep dropping

Generally, the prices in both markets (rental and selling) are incompatible: if one of them goes up, the other falls. But at the moment, selling prices are dropping and rental prices also seem to be going down as well. This means, whether you are buying or renting, now is a good time to do move to Spain, if you are serious about Spain.
 
Whether to buy or to rent in Spain depends on your goals. I am sure that renting a place now will be cheaper, easier and less risky than buying. Also, if you are planning to live abroad and Spain seems to be your favourite place, I would advise, as somebody said recently in an online discussion, to travel around Spain and discover the country in depth. Do not be an impulsive buyer in the first warm place that you arrive.
 
Buying a property has advantages and it is true that it is becoming cheaper than ever – and it will probably be even cheaper in 2012. Also, currently, some Banks are offering good discounts and paying some expenses (such as legal fees) on behalf of buyers. On top of that, now there is a reduction of V.A.T. reduction to 4%, an offer which will apply until 31^stDecember 2011. Nevertheless, there are other administrative overheads involved in buying in Spain, which are still too expensive.
 
 

Do not be an emotional buyer !!!

Read the full article on Buying or renting a property in Spain

Even though prices for real estate in Spain are dropping because of the recession and stock market problems, buying an apartment continues to come along with a group of expenses that might lead people into thinking that it is better to rent than to buy.
 
 Homeowners can spend around 2,188 euros annually because of all of the basic fees: Council Tax, small repairs, home insurance…
 
Considering fixed costs such as taxes and community fees, living in a standard apartment averages more than 2,000 euros per year.  In addition, renters need to calculate in additional expenses, including the expenses for random repairs.  In total, this can cost around 200 euros monthly.Obviously to buy in Spain is not the same than Comprar piso en Londres because both markets are now quite different 

Read the full article about Costs of buying a property in Spain 

 Property sales in Spain and property prices keep dropping in Spain. According  to the National Institute of Statistics, the number of sales dropped by 31.8% in February 2012 (30.745 properties were sold) compared with February 2011.

According to the Spanish property index firm TINSA, the average price in the Spanish property market dropped by 11.5% in March 2012 compared with the same month in 2011. The last TINSA report also highlights that property prices in the Mediterranean Coast have fallen by 34.9% since the “bubble burst”.  The main cities experienced a fall of 12.6% in the last year, having a total average drop of 30.8% since 2007.

Dramatic Spanish prices fall in 2011 and 2012

 The link of this article takes you to a very useful map of Spanish home prices with average figures per square metre in each region and each postcode.The data corresponds to March 2012. Very easy and nice. Thanks to Tasamadrid and the newspaper El Mundo