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SPANISH PROPERTY: IS THE TIME RIGHT TO BUY

Chronic oversupply and a weak economy mean that Spanish vendors are offering some great incentives to buyers. Is now the time to strike when there is blood running in the streets?

Desperate times call for desperate measures, and for parts of the Spanish property market, despair is almost too weak a word. The past five years have heaped on misery after misery. The credit crunch unmasked catastrophic levels of overbuilding, and then the ongoing euro crisis has kept the Spanish economy under the thumb. Banks and estate agents are slashing prices, to help them offload the glut of unsold properties.
During the height of Spain’s property boom Britons flocked to the country’s coast. They bought holiday and retirement homes, and fulfilled long-held dreams of a place in the sun.

This constant demand inspired builders and developers to keep putting up more houses. A decade-long frenzy saw Spain’s construction industry fuel the nation’s economic boom, before its spectacular collapse when the bubble burst in 2007-08.

But now, with an estimated one million unsold new homes alone amid a weak domestic market, Spain’s authorities are keener than ever to promote it as the place to buy. A glance at any property website offering homes in Spain reveals the great bargains to be had.

At the Desert Springs resort in the Almeria region of southern Spain, a brand new luxury colonial-style town house with two bedrooms set within landscaped gardens, near a championship golf course, is offered for €165,000 Euro less than 50 per cent of the original asking price.

Along the coast in the sought-after San Roque development, a stone’s throw from Gibraltar and Sotogrande on the Costa del Sol, a luxury apartment is offered for only €170,000 (Euro a massive discount of 85 per cent from the €933,913 asking price at its peak in 2008. Banking groups have been forced to write down losses. This has led to a slash in prices, as they attempt to claw back funds. Foreign buyers are finding it hard to resist bargain Spanish property.

Most foreign buyers of overseas property borrow against their home country home if they need to raise money, and then spend the cash abroad. But it is still possible to get a local mortgage in Spain and some banks are offering attractive deals with the sales. In most cases borrowers can borrow up to 70 per cent of the value of the property from 3.2 per cent. But experts say that it is the nature of the market itself that has made Spain a much safer place to buy than ever before. But above all, with the bargains to be had, it’s a buyers’ market. A buyer today is in a much better position than those who bought in the boom. Prices have dropped 50 per cent in some areas.

Olive groves, sunshine, hot tapas, cold wine: Spain’s charms will outlast this economic crisis, and many to come. These prices, on the other hand, may not.
“The way to make money is to buy when blood is running in the streets.” John D. Rockefeller.



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