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Cash Buyers & Investors Benefit from Troublesome Spanish Property Market - 19 November 2009

The Spanish housing market has reached its bottom, piquing the interest of cash investors, experts say.

The country’s overall housing stock is expected to fall 7 percent this year, with property values in places such as Murcia and Torrevieja seeing the greatest drop—30 to 35 percent—according to economic calculations.

However, despite the lows, many forecasters are predicting that now is the time to buy property in Spain. Interest rates are down, property prices are corrected and financial markets have reopened, and yet cash buyers are in the most prime purchasing position since banks only offer mortgage loans of 70 to 80 percent of the property value—leaving high down-payments that investors struggle to come up with.

For now, real estate experts suggest buyers stay away from less-popular areas and instead purchase homes in regions that have historically done well, like Costa Blanca, or the soon-to-bloom Andalucia. When compared to reasonably priced homes in preferable regions, cheaper, lower quality homes may even be may be even harder to sell in coming months.

Further proving that property interest is on the upswing, investment websites have also reported an increase in real estate searches for Spain, especially among UK investors, who despite the recession, have kept their eye on mainland coastal properties.

Though real estate experts believe the market in Spain has stabilized, they also estimate that values won’t steadily appreciate until 2011.

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