DEAL OR NO DEAL

With so many having their say about what is going on in the Spanish property market we would like to join in. Perhaps our view may also be worth something more than those sitting in press offices or television studios in London or elsewhere. For a start we live here, and have done for nearly 40 years and we have a practical knowledge of the property market. We also have seen many fluctuations in the Spanish and UK markets which is a natural phenomenon (as nowhere remains static except perhaps Germany! And even there things are on the move, albeit slowly). What has been extraordinary have been the continuing high price surges of the last few years in Spain. Many properties ended up with a high price tag in relation to their location and quality of build.

So, now at last things are slowing down, or as some would have it – even come to a full stop, or heaven forbid, dare we say it, even dropping!!! We all know about the so called `overbuilding´ in Spain which could be a factor, as well as, the rise in mortgage rates, add to that the `drop´ in foreign buyers as they rush to buy in Estonia, Goa, etc. and there you have it.

Does this mean that those who have invested or who wish to invest here are doomed? Far from it! Since when has property investment abroad been such a short term policy? Yes, it is a shame that the people we saw on the TV the other night (Trevor McDonald Tonight) were upset that they were not going to get back 25%-50% profit on their properties that they had bought last year or the year before on the Costa del Sol that they would have done a couple of years ago. But as always it depends on where and what you buy.

With regard to `overbuilding´ we have all seen the cranes and new builds going up all over the place and we all wonder if they are needed, but bear the following in mind. That in certain parts of Spain there is actually a shortage of housing – Valencia city is one of these places. So, what about mortgage rates? I can remember quite a few years ago (showing my age!) when rates were 16% and people still bought, including foreigners! And as to people moving away from Spain, well that will always be. People come and go, but Spain will always remain the most accessible county for northern Europeans looking for the sun.

I heard today on the Spanish news that a luxury property in Madrid has just been sold for the record price of 17.000 € per square metre! But back to Valencia; on the 25th May, Coperfil a leader in logistics development announced that Valencia needed a 64% increase in commercial development within the next 4 years to keep up with the current needs. The company sees the new port of Valencia as the commercial gateway of the Levante coast. They went on to forecast that the current population of 2 million will reach 7 and a half million in 2015. With the newly spruced up city, and the glamour of the formula 1 set now confirmed, not to mention the soon to come fast train from Madrid, I would say that the future is rather bright for Valencia.

For those of us who are already here our advice is sit it out. If your property is in a good location and reasonably priced, and you can´t hang on to sell, then aim it more at the Spanish market as we have noticed they are still buying. And for anyone thinking of buying then now is the time; our tip would be, if you see a property you like, then go in with an offer and chances are you could be lucky and get the bargain of a lifetime!