Bargain-hunting Scandinavians and Russians replace British buyers as Spain faces up to banks' toxic debts
Spain's property market is changing, with apartments in Barcelona and other major cities costing far less than in recent years.
Estate agents in Spain say there is a new realism in the property market as officials finally face up to the issue of the banks' toxic debts.
Henri Dovermann, of Hedrealestate.com, an agency in Torrevieja, said: "Things are changing – we are being given whole developments to sell, and pressure is on to sell them fast."
In the past foreign buyers getting into financial difficulties were quietly switched to interest-only mortgages which slashed monthly repayments for three to four years, he said. Spaniards who have got into difficulties have been allowed to stay in their home paying a rent rather than making mortgage payments. Developers, he said, that were technically bankrupt, were propped up so the banks did not have to own up to their bad debts.
But, according to Dovermann, apartments on the coast that were making €200,000 at the top are now, he said, going for €70,000-€80,000, although there are signs that those prices may be reaching the bottom, with local buy-to-let landlords starting to invest.
Bargain-hunting Scandinavians, Russians and even Ukrainians have replaced Britons as the key foreign buyers, often arriving with cash generated at home.
Spanish Crisis Triggers Real Estate Price Collapse
A move by Spanish banks to offload the build-up of foreclosed properties on their books is triggering a massive decline in real estate prices.
Spain's real estate market saw a flurry of building activity prompted by rising real estate prices and property speculation up until 2007, when transactions came to a near standstill.
As a result, Spain now has an estimated two million units worth of excess residential property.
Spanish banks had been slow to offload the properties, which came into their possession when struggling developers proved unable to repay loans.
However, the banks now need an estimated $77.4 billion to stay afloat. And so the financial institutions are now attempting to liquidate as much of their inventory as possible.
The move is good news for overseas buyers who can now secure Spanish real estate for a fraction of its peak prices.
A series of newly completed condos in a historic area of Granada, for instance – hailed as Spain's most beautiful city – have just been offered by one Spanish bank with a price tag starting from less than $100,000 per unit.
The 800-square-foot units are within walking distance of the city's Old Town and come with 95% financing available for both domestic and overseas buyers.
Spain had tried already to create the European 'Miami'.
A combination of hotels, apartments and retirement homes for European pensioners and partly-retired professionals, all over the Spanish coast. The project included the construction and updating of communication infrastructures, such as the AVE, highways and airports. Now, big plans are coming again.
Las Vegas
The first one is the Eurovegas,which is getting great presence in the media because the American company that will develop the mega casino is in Spain, checking two likely locations, Madrid and Barcelona. The entrepreneur Adelson demands, among other petitions: lands expropriation, special tax treatment, and smoking permission in public places. In returns, up to 250,000 employs will be created, Adelson say. Some sources make sure that most of Adelson’s requirements has been satisfied, and only the casino location is left to know.
Palma de Mallorca Cathedral
The second project is in Mallorca. The developer Roland Ras has presented to the Govern Balear a plan in order to remodel Palma’s Habor. This undertaking could create up to 33,000 employs. The stipulated period to finish the redesign is around 5 years. The work would be over a surface area of a million square metres and the industrial area would be enlarge in nearly 400,000 square metres.
The project would be developed by a private group with American and German funds. ‘Now is a good moment to invest in Spain and we see an opportunity for it’ Ronald Ras said.
This is the moment for those who would like to purchase a house in the beach
The prices have gone down around a 38% along the Mediterranean Coast. Most of this decrease had been cause by the banks. Here there are examples:
Comunidad Valenciana
In Castellon, towns as Peñíscola o Vinaroz, make the most of the geographical conditions, such as the closeness of the sea and the mountain, to sell houses that in some cases were finished years ago. In the tourists cities of Oropesa or Benicasim is very important also the presence of real estate agencies owned by financial institutions.
Second residence in Spain
Those who are looking for a good offer will find a wide variety of them in Valencia Province, from Sagunto to Oliva, and in many cases is even possible to negotiate the price. The most interesting offers are located around the Ribera Baja, and the comarca of La Safor.
Alicante gather the biggest tourist offer. Marina Alta, Jávea and Calpe are the most famous destinations. The city of Benidorm keeps being one of the main references in the region. It is possible to find properties in Cala Finestrat for a price under 122.300 €, or even less, from 120.000 € in Villajoyosa.
With the exception of Marbella, the financial institutions are the main seller in the Andalusian coast. In Almería, it is easy to find one or two bedrooms flats from 54.000 € to 110.000 €, in towns like Vera, Mojácar or Roquetas de Mar. In Almuñécar, in the coast of Granada, there are 90 square meters for only 189.423 €.
Two bedrooms flats from 136.600 € in Nerja. And in Torrox, one bedroom and 95 meters flats, from 168.840 €. The minimum price in Torre del Mar is 114.246 €. Furthermore, real estate agents and banks are competing for the little area of Rincón de la Victoria.
Additionally, there are apartments for less than 134.030 € in Torremolinos, and studios for less than 45.000 € in Fuengirola. On the other hand,in Marbella where the number of properties from banks is minimum, the prices are higher, between 155.540 € and 259.000 €.
The excess of property in this region is smaller than in Valencia or Andalucía, with the exception of Tarragona.
Although Girona and Tarragona concentrate the biggest amount of properties, some seaside towns in Barcelona, such as Castelldefels o Sitges, keep being important points to buy a second residence or even a first one.
The developers, Realia and Vallehermoso, are selling in Sant Feliu de Guíxols, two and three bedrooms flats from 139.000 € and 232.399 €, respectively.
Cambrils, in Tarragona Province, offers the widest number of available properties.
Balearic and Canary Islands
House in Ibiza for 350.000 €
The islands do not scape from the competition between banks and real estates developers. More relevant in Canarias than in Baleares, it is causing a bigger decrease in prices.
In the Balearic Islands, in Ibiza as well as in Mallorca, it is possible to find three bedrooms flats from 262.000 €, apartments for 165.000 € and studios for 42.500 €. In Ciudadela (Menorca) flats for 110.000 €.
In the Canary Islands, there are houses for sell from 63.000 €, and flats from 55.000 €. Moreover, It is possible to find apartments from 37.700 € in Tenerife.
Costa Cálida, Costa del Sol and Canary Islands are the hottest destinations
According to statistics, the destination which has come down in price most is the Costa Cálida (Murcia), where it is now possible to rent a house for an average of 24 euros per person per day, which is 40.56 per cent less than the 2011 prices.
These declines have also reached the Canary Islands, with rents falling by 38.85 per cent. Rental prices on the Costa del Sol (Malaga), dropped by 31.51 per cent, and on the Costa Tropical (Granada) rental prices have fallen by 23.22 per cent in 2012.
At the other extreme, in the Costa Blanca (Alicante), the price per person per day reached an average of 47 euros, an increase of 18 per cent compared to 2011. On the Costa de la Luz (Cadiz and Huelva), prices have increased by an average of 13.3 per cent and in Valencia they have risen by 4.57 per cent.
The Balearic Islands, meanwhile, remains the most expensive destination with regards to renting, with an average price of 54 euros per person per day, although this figure still represents a reduction of 21.6 per cent compared to 2011 data.
Overall, El Mundo reported that revenue from Spanish beach rentals showed a decline on average of nearly 17 per cent between the summers of 2011 and 2012.
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Henri Dovermann, of Hedrealestate.com, an agency in Torrevieja, said: "Things are changing – we are being given whole developments to sell, and pressure is on to sell them fast."
According to statistics, the destination which has come down in price most is the