Spain comes alive again

Posted 15 July 2009 at 10:59

Posted in Property hot spots

 

Spain continues to dominate European property market

According some analysts, the desire for British and Irish buyers to purchase an investment property or holiday home in Spain is as strong as ever. Despite the financial restrictions of the credit crunch, Spain will always be one of the most popular places for those who are ready to invest in property. Its many natural lifestyle advantages such as climate and proximity to the UK ensure it will continue to be a safe and reliable choice.

According to some surveys, the number of inquiries is down 10 to 15 percent from a year ago, but buyers are much more serious and focused on bargains now, so sales levels remain higher than might otherwise be expected.

The exchange rate has affected property sales but the situation is temporary and is likely to recover to some extent during 2009. However - in real terms - the buying power of the pound hasn't actually changed. In many instances, the weak pound is cancelled out by lower selling prices. Those sending funds back to the UK are reducing asking prices as they can get the same amount of pounds for less. Developers are also offering major discounts on new units.

Q) When it comes to property in Spain, is it a buyer's market or sellers market?

A) Both is the answer in fact,

"At FC Exchange we have seen a significant turnaround in the flow of funds to Europe in the last few months." Said Mike Steenkamp, Director FC Exchange. The strength of the Euro will continue to affect both buyers and sellers in the following respect:

Buying property:

For property buyers the strength of the Euro is a problem, remember a strong currency is an expensive one. Against the Pound we have seen the price of the Euro increase by nearly 30 % in the last 18 months making a € 150,000 property about € 45,000 more expensive. In saying that, the property market is fuelled by demand, less demand often transcends into a fall in property prices which creates good opportunity for cash rich buyers.

Selling Property:

Over the course of the last 18 months property owners in Europe have struggled to achieve their original asking prices. Foreign investment levels have dropped as a result of current economic conditions which are making it difficult and expensive to raise finance for an overseas property purchase. Nevertheless properties are still being sold as some sellers (predominantly expats) offset reduced prices with positive exchange rate movement.