We spoke last week of how the prices of spanish real estate are surprisingly static, despite the obvious increase in demand.
Sales are booming yet this is not reflected in the prices being achieved here for property on the Costa Blanca.
Lets look at a few of the reasons-
1) The media- its simply uncool to write headlines such as “Spanish Property Market is just Fine” Can’t imagine “The Sun” ever leading with it, but as we rely so much on these people for their so called expert advice, the fact they are not saying anything mis-leads people that nothing is happening- far from it. Something like 100,000 properties will change hands in SPain in 2013- thats not going to make CNN but its true.
2) Estate Agents- many estate agents in Spain deserve the truly shocking reputation they have- but not all of us! We often speak of unqualified, unscrupulous sales people- (yes more to follow in future articles) but they muddy the water for everyone by making ludicrous predictions “Property in La Zenia set to double in the next 15 minutes.”
Its so difficult to explain to buyers the importance of getting your advice from the correct source. Yes, your salesman can tell you if Rooney was offside, why some ejit did or didn’t win the X Factor or who is on page 3 today but does he know how much a property is worth- possibly not!
The reason Spanish property prices are on a level plateau is partly due to motivated sellers. Lets say a buyer has 100,000 to spend in La Zenia. Typically they will offer 20% below the already discounted prices and very often if the home they want won’t be bought for that, we’ll sell them the one across the road. We got slated in the letters to the editor in the Coast Rider newspaper, but what can we do? We sell property and if a seller is willing to accept a price, we are obliged to broker the deal.
Next factor- the banks. We could set up a full time newsroom on the banks selling Real Estate in Spain. They don’t know what they are doing and the ones losing out are the buyers, not the banks. Comaskey Properties for example are registered agents for most of the Spanish Banks repossessions. It is cheaper to buy repossessed property in Spain from Comaskeys than direct from the banks. Does that make any sense? No answer to that question is needed, thanks. The banking situation is changing dramatically in Spain and we’ll see how it influences property prices in 2013.
Buyers are becoming more educated- we love it! Buyers, especially those who work hard for their money want bargains and now understand what a bargain property in Spain actually looks like! Cash buyers in particular are in a strong position when it comes to getting the price down and know how to use this power. We tell these buyers not to feel bad about making an offer, if a seller is happy to reduce a further 5% for example for a quick sale, then why not make an offer.
Mortgage rated, exchange rates, the I.M.F, Spanish government policies, the E.U, heck- even the situation in Greece can all have an effect on Spanish real estate next year. What is the factor that keeps is all even though, above all other? Simple- its supple and demand. The great news is that both exist in equal measure, especially amongst ex-pat buyers right now. Those special interest groups, telling us what they think we want to hear don’t like the truth….. Property in Spain just now is selling for exactly what the intelligent market says it should go for.