The European property market has taken a tumble in recent years. Way back in the halcyon days of the 90s, villas were being built left, right and centre, and millions of Brits were flocking to the Costas and beyond in search of their very own chunk of paradise with a pool. But the recession hit and the property market in countries such as Spain and Portugal crashed spectacularly. Owners suddenly found themselves living in ghost towns with villas worth a fraction of what they had paid for them.
Things are slowly improving, but thanks to a weak Euro, many expats are now finding that their money doesn’t go very far in Spanish shops and the cost of living is a lot higher than it used to be. But the good news is that if you have some spare cash, the Spanish property market is ripe for the picking and if you make a wise investment now, you could end up seeing your investment significantly increase in value in the long term.
The Spanish Property Market is Still Suffering
Experts believe that property prices in Spain could fall by a further 10-15% before they stabilise once again. There is very little investment in new-build properties and Spanish lending institutions are still not handing over much in the way of mortgage cash. All this, combined with high unemployment levels, means that Spain still has some way to go before the property market picks up again.
Is it Wise to Buy in Spain?
The answer is yes, but you do need to be careful. There has never been a better time to invest in Spanish property and there are enough new houses for sale in popular locations to attract buyers from the UK, but buyers should always do their homework and take expert advice at all steps of the process.
Spain has loads to offer property investors and it is one of the most popular destinations for Brits looking to invest. It has a fantastic climate, friendly locals, and the potential for fabulous property investment returns. Cities such as Barcelona are very popular with overseas buyers and it is possible to find beautiful apartments in historic buildings for as little as £400k.
Prices in Spain are now around half of what they were at the height of the property boom. This means that the potential for picking up a bargain is huge. There is a glut of properties for sale and you can pick up some fabulous properties at bargain basement prices, particularly if you look inland away from the busy resort areas. Another way of bagging a bargain is to buy direct from the banks—many will accept ridiculously low offers just to offload properties from their books.
You have to be very careful when buying property in Spain. Buyers will need a large deposit if they hope to obtain mortgage funding. There are also lots of legal hurdles to overcome and corruption is a problem—there are many sorry tales of owners losing everything after their dream villa was razed to the ground because the builder didn’t bother obtaining planning permission.
If you are careful, your dream of living in the sun might not be as unrealistic as you first thought, but if you subsequently decide to stay in the UK, visit Gumtree and check out property prices in your area instead.