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Spain for under €100,000, but caution urged - 30 January 2007

It is easy to get carried away with price levels on overseas property, especially in a market like Spain, where the rapid rate of building and investing has pushed prices in some areas into the same bracket as London property.

Against this background, it is refreshing to find that it is still possible to buy a dream property in the Spanish sunshine for under £66,000. And, contrary to what you might expect, the properties aren’t stuck in the middle of nowhere, miles from the nearest supermarket, down a dusty track and where the coast and an airport with regular UK flights are equally fanciful notions.

The Mar de Vergel development, launched recently by www.totallyproperty.com, is in the historic town of El Vergel, just outside the Costa Blanca resort of Denia. Consisting of 24 spacious apartments, these exclusive properties are perfect for those who want the convenience and lifestyle of a property in Spain, but with a price tag one would more readily associate with Bulgaria or one of the emerging markets. Properties on this development even come with additional garage and storage space, at no extra cost.

Denia is increasingly popular with UK buyers and tourists, with low cost flights now landing at both Alicante and Valencia. With the beautiful, often wild beaches of this region, El Vergel alone has over 4km of impressive coastline.

The announcement of this affordable development comes as particularly good news for first-time buyers (FTBs) in the UK, who, according to a survey released at the weekend, are taking more risks than ever before just to get on to the property ladder. Many are prepared to take loans over five times their salary, or mortgages lasting beyond the normal 25 year term. In some cases, this sets them up to still be paying off their mortgage well into old age.

As a result, more FTBs are choosing, or being forced, to look at the overseas property market as a way of getting themselves onto the property ladder, and this type of development should provide the perfect stepping stone to a dream property either in the UK, or further investments overseas.

At the same time, the latest six-monthly report from the Organisation for Cooperation and Economic Development (OCED) has warned that property prices in Spain may undergo a ‘correction’ over the next few years. The report suggests that properties are being sold at up to 30% over their real value. The prediction is that the market imbalance will result in a gradual fall in property prices, though a ‘shock’ fall is not being ruled out under specific economic conditions.

The Spanish property market has brought wealth and happiness to many people, but this past week has provided a reminder that you can still buy cheap, coastal properties here, and that there is no such thing as a market immune to the caprices of economics.

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