As international property prices fall, buyer confidence at a low and banks tightening up on mortgage lending is it still possible to ‘bag a property bargain’ in Spain ?
Lets look at the facts:
3% fall in property prices in the 4th quarter of 2008: The mix of figures released by the Spanish Government and various official bodies can easily lead to confusion. The Spanish housing ministry have reported that year on year figures show only a 3% fall in property prices in the 4th quarter of 2008. However, I think it is very clear that the real figure is considerably greater than this. Many Estate Agents believe that the actual figure may be up to 35% from the highs of 2006/7.
Property transactions have fallen by 30%: This government statistic does not take into account property completions of new properties due to the long lead time of most new developments. However it is a clear indicator or buyer confidence in the Spanish property market which is obviously compounded by the international economic recession.
Mortgage lending has also fallen by 45%: Spanish banks have heavily reduced mortgage lending in 2008/9 due to international banking crisis spreading extreme prudence throughout the major Spanish banks. Some banks have even recently reported a complete halt in mortgage lending for any new clients!
Good News for Investors ?
Considering the aforementioned facts some savvy investors are already returning to purchase property in the Duquesa area. The significant fall in property prices now mean that property affordability (based on income to mortgage repayment ratios) is comparable to those at the start of the boom in the mid-nineties.
The weak pound has also meant that Spanish property owners who wish to return to the UK are greatly reducing their asking price meaning superb opportunities to buy heavily reduced property are now available.
For those in a strong financial position banks are willing to give mortgages and with the recent fall in the Euribor to 2.1% mortgage repayments will now be on average 200 Euros less per month. The drop in the Euribor make the rate return to its lowest since June 2005.
For those fortunate enough to be cash rich and looking for an opportunity for a profitable long term investment Duquesa now presents itself as a wonderful option. With savings interest rates being at a pitiful amount and uncertainty and record lows in the stock market people are returning to property as a viable long term investment as well as seeing an immediate return through good rental returns. At Barrington Homes we have 2 bedroom apartments from as little as 135,000€, 3 bedroom townhouses from 143,500€, 4 bedroom properties from 225,000€ and private villas from 400,000€. To keep up to date with the latest property news and bargains sign up to our News Letter or email Barrington Homes at info@barringtonhomes.eu
Barrington Homes are reporting an increase in property purchase enquiries as well as investor confidence quietly returning for those looking to take advantage of the low property prices and general feeling that savvy buyers can make very shrewd investments previously unheard of in recent years.
