Having lived in Spain for many years I know that the country was overdeveloped but it doesn't take a brain surgeon to know that. Having worked with all the major and some minor banks in Spain dealing with repossessions it is also very apparent that bank held property, with a "value" running into tens of billions of Euros, has a varied saleability. I would estimate 50-70% of all bank held property will never sell at a price anywhere near the book value, current value or even sell at all.
Potential buyers are now more savvy and look at value rather than price. Buyers that attained those rose tinted spectacles as soon as their plane left their country are now few and far between. So many properties were sold because they looked cheap, without the buyer having a yardstick for proper value aside from the tales told to them by their estate agent hungry to seal a deal.
There are now fears that as Bankia emerges as the next super bank in need of a bailout, following the resignation of its chief executive, that there may be a glut of property put onto the market as a result of government enforcement. Even if that does happen, do not despair. Prices will not crash further in Spain as so much of the property held by the bank is, for want of a better word, rubbish. When prices get compared there is not a decision on if to buy the bank repo that is cheap but offers no value, buyers now look for value rather than just price. Don't get me wrong, I am not saying all bank repossessions are bad, far from it. We currently are promoting a packaged deal from a bank in Hacienda Del Alamo that offers great value in the resilient market in Murcia on a golf course, near the new Paramount theme park and Corvera airport. Not a "cheap" price, just good value.
My other concern and a partial reason for the mess Spain is in, is the Euro. We can all speculate what will happen next, Greece may withdraw and go on its own which may be followed by other Southern Euro economies like Italy and Spain, but the overall answer is we do not know. Take a mortgage based in Euros for as much as you can and you can only benefit.
Over the last two years the euro has lost around 20% of its value against sterling, making property purchases 20% cheaper. Add that to declining values, low mortgage rates and good spectrum of properties to choose from, and it could be sensibly argued that the time is right now to buy in Spain. Is it the bottom of the market, no one knows. As one client once said to me, markets do not ring a bell when they hit the bottom.
Steve, MD Lydnem Property
Contact us at info@lydnemproperty.co.uk if you are looking for a good deal in Spain or its islands and we will see what we can find for you. Click on the link HERE for details on hacienda Del Alamo. For offers on property all over the world CLICK HERE
