The Good News and the Bad for Spanish Property in 2013
The Spanish economy is going through the worst ordeal since the Civil War in 1936-39. Now the major struggle lies within the Spanish property market, which knocked out the economy, and everyone expected a prompt recovery. 2013 will be the year of ups and downs, and will probably be the turning point as well. High points for overseas home buyers and investors in 2013
- Prices will stay at their lowest ever point, hitting rock-bottom in specific urban areas such as Recoletos or Ruzafa in Madrid (where prices have already stabilized), the Universitats and Port areas in Valencia, or the Gothic district in Barcelona. This means that in 2013, buyers and investors will find the opportunities of a lifetime, buying as cheaply as they could ever dream, while prices are leading to a “plateau”.
- For Buy-To-Let property investors, the economic situation in Spain has boosted the rental market, and we are seeing situations in cities in which real estate is sustained by the rental demand.
- On the coasts, prices will generally keep dropping in certain areas, and there will always be a property for your budget regardless of how low it is, if you just want to be close to a sunny beach.
- If the government’s prediction is right (and this is a big “if”), we will witness a quarter in 2013 in which the economy will stop declining and will finally show positive growth, which will launch the economy.
- Buy cheap—refurbishing and marketing is a great option. Refurbishment costs in a slow economy are also low. We have seen prices of 30k in main cities for buying to refurbish and then letting.
Low points for overseas home buyers and investors in 2013
- The challenge for investors in cities will be dealing directly and wisely with sellers in order to achieve Below Market Value in an already low-priced market. BMV investment will guarantee higher equity in the near future.
- The rental market is secure in terms of demand, but the way that the economy is going (downwards) may mean that rental income will not be great and yield will still be low. Once again, this all depends on the buying price and the negotiation process.
- For those who prefer new developments, the VAT will increase from 4% to 10% in 2013.
- Anyone who buys as an investment option should understand that the rewards will come after a few years and 2013 will just be the year of leveling out for the Spanish market: Don’t expect big rewards quite yet, and be patient.
British home hunters in Spain are setting low budget looking for their one time life bargains in Spain
Prices in the Spanish property market are getting the exciting momentum of bargains especially after the summer, when the low season starts. In September and October, The Spanish Brick dealt with more than 157 inquiries related to Spanish property market.
37% of the inquiries were set with a top budget of £120k, 57% set a budget below £75k whereas. Only a 3% did not want to disclose their budget, a 1% had a budget above £200k whereas the 18% inquiries left where related to other matters related to legal framework, economic situation and market forecast.
There were two facts that have taken our attention. The first one is that a segment of the inquiries makers were looking for a property that in the last months was considerable reduced in price. The second fact is that some of the buyers decided to enlarge their budget where seeing that the preferred destination could not deliver the dreamed bargain. Some of them enlarge the budget up to 30% from the original price.
38 Stands Offered Spanish Product at the Property Fair “A Place in the Sun” in London
This year, a total of 38 stands offered “Property in Spain” (in 2011 there were 35). There were properties repossessed by banks, product from property developers, and offers from estate agents with dwellings for sale on the part of the owner. Having 85% of new stands (most of them Estate Agents) with Spanish product this year is a totally different story than last year. That is to say: new brands and new agencies.
There was a good variety of exhibitors: small companies and large firms. We want to highlight businesses that are 100% Spanish (Spaniards attending to the British public) and the English agents that came from Torrevieja, Málaga, Marbella, and other coastal towns in order to present their product to the assistants. Good luck to all of you.
Repossessed products had their exclusive place at the Fair, as the total amount of repossessions added up to around 11,000 units.
Properties and additional services
In the show it was evident that the Spanish property market has become really affordable. Amazing offers from as little as €41K for a 2 bedroom flat just 15 minutes away from the beach and brand new apartments from €57K are just two clear examples of the offer.
Apart from the properties, a broad range of services were offered in order to complete a successful deal with happy end for both buyers and sellers: Insurance, mortgages, legal services, rental management, furniture, currency exchange, building works…
“Quality” Visits
According to the organization, the number of visits on Friday was 4,753, and the influx was constant in the last hours of the day (the visitors went from work to the Fair). On Saturday, there was more of the same until three in the afternoon (when people left the Fair to rest for the weekend—or to watch football, as the Premier was coming to an end).
According to the interviewed agencies, the number of visits stood out because of their particular nature and because of the predisposition of the client to put a request in place, to leave contact information to do a follow-up, and, on the part of the agent, to close a possible sale.
Contact The Spanish Brick if you would like to find out about the best offers that could be found at A Place in The Sun.
On the Hunt for a New Flat in Madrid
There is a micro-market in Madrid that we can call a “hotspot” for apartments for sale without any doubt: new homes and houses to be refurbished in the center of Madrid. They are very rare, and it is hoped that the lack of available new homes in central Madrid can be satisfied (in part) by second-hand refurbished homes.
The new home in central Madrid is a scarce commodity. The developments of homes from scratch can be counted on one hand, and, although the total offer increases if one adds in refurbished buildings, even so, all of this situates around 450 homes. In fact, between 2011 and what we’ve seen so far of 2012 only three new construction developments have started to be marketed. In total in the district there are 30 developments being sold as new, including refurbished homes?
In general, the homes that are born in a district as heterogeneous as Central Madrid-that covers neighborhoods like Lavapiés, Universidad, or Chueca- match up in their dimensions, since they are small, modern, and have a touch of design, provided that the regulations allow it, since any project that is approved in the heart of the capital has to pass the test from the Comissión de Patrimonio Artístico de Madrid (the Artistic Heritage Commission of Madrid, or CIPAM).
Crossing San Bernardo toward Malasaña is the third and last new development that has started up its marketing in these last few months. In the lot, property of Unnim- a pool of savings banks acquired by the BBVA- there is the capacity for building 8 homes and 6 parking spaces, according to figures on the website of the entity.
“Not all of the areas of the district work the same way and each building for sale is unique and is looking for its own audience,” explains Carlos Smerdou, representative advisor of Foro Consultores (Forum Consultants). An example of a successful operation is the marketing of the Torre de Madrid (Madrid Tower) in the Plaza de España, of which now only remain a third of the 131 homes that went on the market in 2011, according to reports from Sibariss, the marketing firm. Other restorations and newly contructed buildings in the district, however, have been on the market for more than three years.
Our conclusion is that central Madrid is a market in high demand and that thanks to the new developments, which offer a different type of housing (smaller and designed), the supply now is very varied and capable of satisfying the demand, being the parameters what they may.
Investors of Buy-To-Refurbish and Buy to let could find a business niche in central Madrid.
