The estate agents’ offices and the property magazines in the Costa’s on the south coast of Spain are peppered with “Distressed Property Sale” notices and one can’t help but wonder if it’s timely now to snatch up a terrific bargain by purchasing a distressed property for sale in Spain (also known as a repossession).
The huge fall in property prices isn’t only a United Kingdom phenomenon. Spain also is feeling the pressure as the bottom has dropped out of the property market there over the last year. The article below looks at the market for distressed property in Spain and whether it is now ‘time to buy.’
Distressed Property. Facts About Distressed Property For Sale In Spain
Author: Steve Dawkins
I’m wondering if you have been tempted to consider the opportunity to cash in on the distressed properties for sale in Spain as witnessed by the plethora of estate agency advertisements proclaiming “Distressed Property Sale” that applies now to so much property for sale in Spain.
Above – we have an example of a 2-bed, 2-bath repossession on Duquesa golf course with prices from €89,000.
Although we are well aware of the tumbling property prices here in the UK, prices have been crashing everywhere and no more so than in Spain, where in conjunction with the collapse of the Pound compared to the Euro, it is creating economic havoc for may Brits who went there to retire. and many such people are having to put their property in Spain up for sale. Many of the owners are in a distressed financial situation and their homes are on offer at prices lower than what they purchased them for.
The increase in distressed properties for sale in Spain has many reasons, here are some of them:-
In just 3 months starting October 2008, the Pound fell by nearly a third against the Euro to end up at just over 1 Euro/Pound in Jan 2009.
Some of the British who acquired their own retirement property in Spain, leased out their property in the United Kingdom and the rent become their living allowance. Other people enjoyed a Sterling pension from a UK Institution. Both groups found their cost-of-living seriously increased as the value of the Pound slid, and some could not afford to live in Spain any longer.
Taking out a Euro-loan to finance the purchase of their property in Spain has proven to be a mistake for some people as the cost of the repayments in Sterling terms has risen whilst the value of their property has slumped.
In the end, because the loan payments could not be met by the property owner, the lending institution has foreclosed on their asset and the property is put on the market as a distressed sale.
The property market failure on Spain’s Costas was caused when the global financial meltdown along the side of a huge abundance of property, criminal or simply inept planning and has left over a 1,000,000 properties in the hands of ill-fated estate agents.
The love affair the British have for the Costa del Sol and particularly with Marbella started in the early sixties and they have been purchasing property there ever after. Later buyers of property in Spain, even if their property has not been listed as a distressed property for sale, may still feel distressed themselves.
Unable to benefit from the huge profits that the early comers made, later investors might well be discovering that they made a huge error.
However there’s a silver lining to every cloud. Confidence is gradually returning to the Spanish market as the fall in home prices levels out and lenders permit developers to take out remortgages on projects.
Some estate agents in Spain now feel assured that the trough of the market is in sight and I believe that one can purchase property in Spain today at the extremely lowest prices we are probably going to witness. The quantity of distressed property sales in Spain might be set level off.
The critical financial position of numerous builders, financial institutions and owners is pushing further sales into the distressed sale class which in turn means that, even though there is nothing new in below-market sales, more sales are being completed below genuine values rather than purely at a discount to the asking price.
Savvy investors have been enticed to search for and invest in low, normal and top end premium distressed property at a price authentically underneath their open market value by the mixture of plunging property prices in Spain and a strictly limited means to get to money.
With the overall trend in package holiday declining and many of us choosing to rent our own place to stay and so have a many free holiday, the leasing market for the better holiday lets is flourishing.
This further builds a case to mull over investing in a house in Spain, although the hire achieved on holiday lettings rarely recovers the complete yearly mortgage instalments and maintenance expenditure consequently vigilant cost planning is suggested.
As any savvy investor will advise you, it’s the rate that you pay instead of the rate that you sell for that really dictates the earning ability in many a property deal.
Marbella in southern Spain is a real case in point of a ‘lifestyle’ investment choice, fundamentally a holiday home that can provide a fabulous centre for personal vacation and that will be retained for at least 5 years.
Now really is an appropriate occasion to get hold of a magnificent property in a distressed sale position for up to fifty % lower than the recent market price if you are lucky enough to have the means to raise a payment of something like thirty to forty %.
Make sure that you can access the knowledge of the leading consultants, lawyers and banks, and most crucially get pleasure from your investment in the Sun.
This 50 percent markdown on selected properties is because they are heavily reduced by the holder (or the bank if by now foreclosed) by a far larger amount than the average price drop in Spain. This is in actual fact an opportunity for the inexperienced investor to market the property almost instantly at a greater price.
About the Author:
Steve Dawkins has been a professional Property Agent for most of his working life. He has extensive knowledge of the overseas mature and also the emerging property markets.
Summary of Page: The number of distressed property sales in Spain could be set to stop increasing as confidence is slowly returning to the Spanish property market. It is now an opportune time to get hold of a magnificent property in a distressed sale position for up to fifty percent lower than the recent market price if you are lucky enough.
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- B&B For Sale – Costa Blanca
- Get a Mortgage in Spain
- House Prices
- Inspection Trip
- Long Term Lets & Rentals
- Property Taxes
- How to Sell Your Property
- Where to Buy – Costa Blanca?
- Where to Buy in Spain?
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