Javier Ballester, managing director of Taylor Wimpey de España, talks about the state of the Spanish property market today, and what he expects for 2011.
Your company closed 2009 with 175 home completions in Spain. What is your forecast for the rest of 2010?
Leading up to 2010 there has been less development by Taylor Wimpey de España in Spain and by developers generally across the country. Therefore, in the prime locations especially stock is very limited.
Overall with less stock to sell in the completed turnkey developments we anticipate sales generally will be approximately 10 per cent below that of last year, but with a resurgence in off plan buyers of the new units there is a positive outlook for 2011.
You are saying that you have less stock of finished homes available? How much stock do you have?
When the downturn hit in 2008, we put a halt to new developments and focused our energy on finishing the existing builds. Today we are very close to closing sales for this existing stock. Many of our current developments have only a few units remaining and to help the flow of sales discount pricing has been applied.
What new developments are you launching? What plans do you have for 2011?
Last February we launched our first new development since the recession started - La Floresta de la Mairena, very close to Marbella on the Costa del Sol. It has been well received by clients seeking off-plan investments, safe in the knowledge they are purchasing through an established developer. In the first 3 months we sold 11 homes. Since then we have launched the second phase at El Puerto in Cala D'Or (Mallorca) and this September we are launching Las Brisas at Alenda Golf on the Costa Blanca. In 2011 we expect to release two more new developments in Mallorca.
Is it true that there are 700,000 stock units waiting to be sold in Spain?
I don't know if this figure is accurate... nevertheless, it is very important to understand where most of those units are.
Spain is a very fragmented market which varies from one region to another, even from one town to the next. Most of the Spanish property oversupply is concentrated in the domestic markets in the commuter belts of big cities such as Madrid, Valencia or Seville.
On the coast, there are areas with significant over supply, but after two years with no construction the prime areas are now running out of property to sell. For instance, premium locations like Mallorca are today already in short supply. In these areas, prices are poised to steadily rise during next year to keep pace with demand.
Regarding the Costa del Sol, what are your expectations?
Areas like Casares, Manilva and Calahonda are still suffering from over supply and will take much longer to recover, but if you are heading to a "premium" location like Marbella or Benahavis, buyers will find that good product between €200,000 and €300,000 is already hard to find.
It is also very important to research a developer before you buy. With some still struggling to make ends meet we sadly have seen a number of people coming to us having lost deposits as their developer has gone into administration. Ensure your builder has financial stability before parting with any cash. This is especially relevant for off-plan purchases.