A look into the Spanish property market
There is now no doubt that the Spanish property market has stabilised and is set for recovery, with both government figures and Spanish banks reporting that the number of sales in southern Spain has increased by up to 30%. British buyers were leading the way followed by the Scandinavians, Belgians, French, Dutch, and Germans. The latest reports show property prices have actually started increasing along the southern coast of Spain.
Also, due to the increase in tourism on the Costa Del Sol, Malaga Airport has had to open a second runway to facilitate the high demand of flights, with approximately 50% of visitors reported to be staying in their own property or rented holiday home – great news for any “buy to holiday let” investors.
Peter Bowerman is a Costa del Sol property expert and master agent, often quoted in newspapers and radio. He is also one of the panel of experts for the Overseas Property Professional Magazine. Drawing on this combination of expertise and experience, Peter has recently partnered with Kingsley Hamilton Estates – a unique estate agency based in London’s Canary Wharf – which intends to offer British buyers the best apartments, villas, and luxury properties for sale.
“I feel that now is the time to purchase on the Costa del Sol, after all, logic dictates that demand and increased sales one day leads to increased prices the next.” Many astute institutions/investors agree, as Goldman Sachs, JP Morgan, Bill Gates etc. have also just invested in Spain. Peter explains that the genuine bargains and best property deals will go first. He also says: “We are selling beautiful apartments and villas in great locations at 50% of the original price and with the large increase in sales and demand, many shrewd investors are snapping up all the best deals right now.” At the time of this editorial, Peter had personally just completed another deal on the coast himself.
Before the worldwide financial collapse, Marbella and surrounding Costa del Sol areas were the number one destination for second home buyers and investors from all over the world. There were a number of years where property prices increased by up to 15-20% a year which obviously could never be sustained but certainly showed the demand for the Costa del Sol.
What about other overseas property markets?
With today’s prices at around 50% less than 6 years ago, investing in second homes overseas is now well within the grasp of the normal person and no longer a secret for wealthy investors and entrepreneurs. Southern Spain is still the firm favourite, especially now that the trend of buying in cheaper developing destinations is truly over.
Many people believed they would make higher returns or that they could live in paradise on a budget. But most of these promised lands are now failing or have already collapsed entirely, leaving behind an abundance of ghost town projects with none of the originally promised infrastructure in place.
The main criteria for a second home buyer include a good climate, good local facilities, a safe environment, and a secure and stress-free transaction. It will be the same for investors, as the second home buyer/tenant are whom they will be selling or renting to.
Demand for property in any area is proportional to the quality of life you can expect to enjoy there. State-of-the-art infrastructure, hi-tech communications, availability of low cost direct flights, top healthcare provisions, excellent state/private schools, and 320 days of sunshine are taken for granted in areas like the ever popular Costa del Sol in southern Spain.
However, in countries like Bulgaria, United Arab Emirates, Morocco, Turkey, and Egypt, words like ‘underdeveloped’, ‘third world’, ‘changing policies on foreign property ownership/visas’, ‘organised crime’, and ‘low standards of living’ are regularly heard. Problems including unclear land ownership and a lack of protection given on payments made before completion are serious concerns one should think about. Also, whilst temperatures of 30ºC may be mentioned in some of these promised lands, what they sometimes omit from the brochures is cold, wet winters of -5ºC or searing desert heat in the summer – conditions that are obviously not so inviting.
Why invest in Costa del Sol?
Spain now has a land registry system very similar to that of the UK. So with the right agent and lawyer, buying a property in southern Spain is a risk and stress-free transaction since only 10% payment is usually needed before completion. Bank guarantees protecting payments and low-rate mortgages (currently around 3.5%) of up to 70% can be arranged, subject to status and valuation. The Costa del Sol historically has a strong and proven property market with property investment opportunities as safe as any in the UK and a lifestyle that exceeds all expectations.
Costa del Sol’s exceptional climate, healthy and luxurious lifestyle, spectacular scenery, chic cosmopolitan resort areas, and more than its fair share of visiting and home-owning celebrities all contribute to the area being known as “the California of Europe”. In recent years, a number of exciting and immensely significant changes have been taking place, with massive investment into state-of-the-art infrastructure and lifestyle facilities which has attracted a huge influx of young professional expatriate families to live life in a dynamic land of opportunities.
Investing in lifestyle as well as property
Blessed with the finest climate in Europe (approximately 320 sunshine days per annum), privileged residents of the Costa del Sol enjoy a comprehensive choice of healthy outdoor sports and leisure activities all year round. Therefore, rained-off barbecues and cancelled beach parties are unheard of. Appropriately known as the Costa del Golf, due to having the largest concentration of world class golf courses in Europe, the sparkling blue Mediterranean is also the perfect place to indulge in every water-sport imaginable.
For the ultimate in nightlife, Puerto Banús, Marbella, Estepona, and Benalmadena Marinas are beyond compare and remain firm favourites with the international jet set as well as many A-list celebrities who own a penthouse, villa, or yacht in the area. Only around a two-hour flight from most European airports and with plenty of low-cost airlines covering the routes, a growing number of professionals and entrepreneurs unsurprisingly choose to live on the Costa del Sol and commute to their businesses when necessary – with the internet allowing them to keep their finger on the pulse while enjoying a quality of life second to none. Unequivocally providing the best of all worlds.
Investing in bricks and mortar (property) has historically always shown good long-term capital growth. With the added bonus of the strong GB pound, buying at the bottom of the market and with recovery already being reported, now could be the ideal time to secure your sun-drenched holiday home or “buy to let” investment.
For further information on the property market in Costa del Sol and the best available deals, call Kingsley Hamilton Estates on 020 7078 0214. Our Spain desk is located in London’s Canary Wharf – the heart of the UK’s lucrative property market – making our specialists the perfect source of expert knowledge to inform all your property needs.