Click on one of the article headings below to read more. These articles were written by Chris Garwood for various publications such as Living Spain Magazine and Spain Magazine.
The Costa Blanca Property Report
August 2008
Our current increase in sales against the same period last year - up by15-20% may be a little misleading in our case, as we have recently upgraded our marketing, but we are getting more enquiries than ever. Our UK enquiries are up, but most are looking ahead to purchase here, once there UK home is sold. What has increased drastically, is the level of enquiries from the rest of Europe and other parts of the world.
More people are looking slightly inland from the coast (10-15mins. drive). Not necessarily through preference, but usually due to the specification of their desired property not being feasible at their target budget, close to the coast.
As mentioned above, we have boosted and re-focused our marketing effort, we also offer our clients a contribution of €500 to €1,000 towards their viewing and purchase costs, on completion. Since the UK pound currency plunge earlier this year, we have put in place methods for UK clients buying resale property from vendors returning to the UK to complete the transaction in sterling. This works well for both parties and also helps with the negotiation of the sale price.
There is a bigger selection of properties to choose from compared to a year ago, but the general reported slowdown in sales and completions is mostly due to the combination of UK buyers not being able to sell their UK properties, and not having the confidence in the UK’s current economic condition viz. UK property values, the stockmarket and the current banking malaise.
The resale market currently comprises of three factions. There are the long term property owners who would like to sell for whatever reason, but don’t necessarily need to, they have seen these market fluctuations before and have seen how quickly the local market here recovers, these vendors are acutely aware of the value of their property two years ago, and they firmly believe they will return to these values within the next two years, so they are preferring to withdraw their homes from the market and to wait. Secondly, we have those who, for financial or other personal reasons who need to sell. In most cases, these vendors have priced their property at sensible and realistic prices, though most will still accept a reasonable offer. However, there still remains the ‘price high and hope’ brigade, usually offering low-grade properties at inflated prices, hoping to attract the fool (there are some out there) who thinks the best way of judging value is to see if a silly% offer is accepted! Additionally, within the new build market, the Spanish developers have been a little slow in reacting to the market changes. This invariably relates to the speculatively build apartments and oversized terraced villa complexes, built in unattractive and ill-considered locations. Some of these guys have really caught a cold, some are offering big discounts, whilst others (presumably, the better funded) prefer to halt construction until their area of the market recovers. So, what is sensibly priced to sell, and what is overpriced in order to accept a cheeky offer? One should follow the guidance of one of the more reliable market practitioners – ideally a relocation agent with good connections with the better estate agents. A relocation agent will work on behalf of the buyer, as opposed to the vendor, and should be able to guide you safely through the property buying maize, and ensure you find good value.
Our particular area is a relatively mature and established one with continuing steady demand and has been amazingly resilient. There is very limited scope for additional development here, particularly along our coastline, and thankfully, this is strictly controlled and regulated. With this comes a more balanced market, compared to many other areas, accordingly, I would estimate perhaps a fall of 10%; the poor quality stuff falling by more than this, whilst the quality properties – correctly priced – continue to hold their full value, and continue to sell.
As previously stated: locally the market remains relatively stable. Our biggest concern is what is likely to happen with the UK property market, and its economy in general, currently, this seems to be the biggest negative influence on our local market. One positive effect is beginning to be seen here; some of the less well-regarded property agents have fallen by the wayside. There are at least twice as many estate agents as we need here, and we would all be well served to see (the less good) half of them out of our market.
There continues to be a steady demand for quality properties in sought after locations, at sensible and fair prices. We have known several potential buyers, recently who, having found really good properties – exactly to their liking, have then lost them to a rival buyer, due to their procrastination or unreasonably low offers. Do not be fooled by the number of overpriced, third rate properties swamping the market – real quality and value still needs careful and thorough searching for.
I really don’t see much changing. Quality properties will continue to sell, the grotty and overpriced stuff will just remain unwanted on the market. Likewise, the better agents will try harder in adversity, whilst the poor ones will shrivel on the vine. It amazes me that, even in this downturn, there are so many lazy (and incompetent) little rascals in this business who seem to think the world owes them a living; hopefully they are in for a bit of a shock!
What we are just beginning to witness is the new wave of enquirers from the UK who have done their sums on the basis of the current situation. They accept that the exchange rate is most likely to remain below 1.25 to 1.30€/GBP, they have accepted the re-valuation of UK property prices and recognised the similar fallback in the European markets. They accept the tighter bank and lending regimes which are now in place and, most importantly, they realise there is absolutely no case for anyone to assume they can sell in the cold, wet and grey UK and buy into the Spanish lifestyle for half the price. That is not logical, neither is it plausible; I remain very fond of my country of origin, but there is no way I would pay a premium to live there, rather than in Spain. I am sure, dear reader you understand my sentiments – that is why, no doubt, you are reading this fine magazine!
