Articles :: Spanish Property Crash - AUKPO Comment
Is your property investment safe?
The recent barrage in the British Press of reports of a ‘property crash’ in Spain, have been fuelled by the collapse of share prices by 60% and more in some leading developers. However, you only have to look at the massive building projects that have been underway in Spain in the last twenty – thirty years, and that are continuing to get approval, you must have actually thought to yourself as you are driving along the A70 or N338, ‘something’s got to give’. Well it has and this is largely reflected in the large ‘off plan’ developments which fuel massive developments that have inbuilt property capital returns. These companies are now subject to the largest market force in economics, that off supply and demand. Too many new developments within a limited market place will surely result in more realistic prices. It is not however a crash, we will all put our own view on the situation dependant upon what market we are in, if as an agent selling property, or a developer creating the supply, the last thing that will be seen is a view that support’s the view that there is a ‘crash’.
The recent excellent article in ‘Eye on Spain’ clearly has examples of views held by property professionals in Spain, I have additionally contacted the contributors and their articles will be reproduced below with their permission over the next few days. What is clear from all of them actually is a grounded justified and responsible view of where the market has come from and where it is going.
In spite of negative publicity about land grab, Operation Malaya, and over-developed areas, UK and Irish buyers are still coming to Spain in their droves. Rightmove Overseas reports a 92% increase in enquiries for Spain during the first quarter of 2007, compared to the same period in 2006. The increase in searches has largely been driven by emerging areas such as Costa Tropical, Costa Azahar and large urban areas like Madrid and Barcelona, said a spokes person, as well as the recent surge in the popularity of Spanish golf resorts. (Source Spain4u.es)
The continuing building boom, corruption enquiries, land grab issues can only go to fuel media led downward pressure on property prices. However the long term will see this period as merely a leveling off from an opportunistic period.
The reality is as all the above reflect, the individual property owner who has a desire for an improved lifestyle, will continue to chose Spain, Italy and France as their preferred choices. The demographics of the traditional property seeker has moved from the 50-55 age group down to the 30-40 age group looking for a long term investment both in capital and well being.
The AUKPO will be contacting local Spanish Lawyers, Property Agents, Councils and Banks to get their view of what the view is in that particular area. Costa’s Azhur, Blanca and Valencia will be the first area of focus next week.
