Spain property market ready for investors as dark clouds reach the UK

Spain property market ready for investors as dark clouds reach the UK

British investors could be turning their attention to the emerging Spanish property market as prices in their own sector become increasingly less attractive.

With property prices in the UK soaring, putting the housing market in a similar position to that of the USA in 2007 just before the collapse, the Spanish market is enjoying a period of stability, with prices that are rising, only rising slowly.

One key reason for such rapid inflation in the UK is that so many investors are buying properties to let which reduces the supply for private buyers looking for a place to live in. With a reduced supply for them, prices are being pushed up.

 

HOW SPAIN IS DIFFERENT

Contrast this to Spain where there is a massive oversupply of properties with real estate in Spain now among some of the most undervalued in Europe. OECD calculates that the British housing market is overvalued by seven per cent while the Spanish market is undervalued by 26 per cent.

As a result, there could be some potential bargains out there. This has come about because, in the boom time, Spanish banks lent heavily to property developers. When things went bad, some major Spanish banks repossessed properties and still continue to hold some in their portfolios. They are now keen to get many of these properties off their books.

 

WHAT´S ON OFFER AND WHY?

Mortgages of up to 113 per cent are now available and with the added kicker of a zero per cent deposit. To contrast this with the rest of the market, the typical Spanish mortgage requires a minimum of a 30% deposit.

Sareb bank has set up a website advertising nearly two and a half thousand homes it wants off its books. Its campaign translates to English as ‘Your house at any cost.’ All of the properties are repossessed. However, a slight chink in their marketing strategy is that the website is completely in Spanish. This could be a hindrance considering many clients will probably not be Spanish speakers.

Many cut price properties available are in ghost towns, so called because developers weren’t able to complete the infrastructure for them and so weren’t able to sell the apartments or houses. Because of the continuing lack of infrastructure, these aren’t attractive to investors but they could be a cheap option for people looking for a holiday home in the sun.

Over the last five years there have been a lot more British buyers interested in these types of deals, mainly because sterling was weaker, and interest rates were also low.

If you wish to receive more information on investment and legal services in Spain, please contact corporate law firm Argali Abogados.

 

 

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