A Lucky Man and The Cavalry

There is no getting away from it - there is a marked downturn in the property market in Spain. This is also in our neck of the woods - Valencia - which up till recently had seen a spectacular rise in property prices. As an estate agent it hurts me to say it, but sometimes the old adage of `what goes up must come down´ can even happen in our business!

According to the Spanish press the price of property has fallen by 8% in the Valencian community from January to September this year. While this is a general figure which covers the whole area, it is eyebrow raising. The actual city of Valencia is classed as having a drop of 6.5%. As to why there is a fall, the newspaper states that the reason is a lack of buyers! Up to now Spanish banks have exercised a great deal of caution - no sub prime mortgages here! But now they are tightening up even more if that is possible.

So what of my title - A lucky man and the cavalry? Well, a couple of weeks ago in the town of Algemesi the council held an auction of 30 new council flats. Instead of being inundated with buyers as is usual, you can imagine the auctioneer´s (not to mention the councilers) surprise when one lonely man walked in to bid! It seems that nobody else in the town had managed to get a mortgage.

We all know that there is a surplus of new properties (mostly flats), which adds up to around a million in the whole of Spain with 140.000 of them in the Valencian community. There is also a lack of council housing in Spain. So, here comes the cavalry in the guise of Beatriz Corredor the housing minister(ress?) who promised yesterday to absorb this surplus by turning alot of it into council property to rent and sell with guaranteed mortgages. By doing this the minister hopes to stop the price fall before the two year period which other experts believe it will take to provide a natural equilibrium in the sales and purchase market.

Whatever happens nobody can deny that with so many bargains around perhaps now is the time to buy!