Housing pain in Spain

The recent fall in property prices in Spain has left many thousands of Britons in a state of turmoil after the value of some properties has fallen by up to 65%.

The worst hit seem to be apartments bought off-plan or in the costa areas where there has been an oversupply of property. Nevertheless, expert advice suggests that owners should not rush into a panic sale, and that the prospects for the Spanish property market remain good in the longer term. A loss is not realised until a sale is made.

This is seen by most experts as a correction of prices that had become unrealistically high, especially on the costas. With such a fall, it is best to hold on and rent out if possible, with prices expect to recover in time.

There are about one million British owners of homes in Spain, but most of these are owned by permanent emigrants. Britons buy around 60,000 properties in Spain each year, which amounts to nearly 40% of foreign sales.

Spain is a well established market for British buyers and this is expected to remain the case, as many still look for second homes or property investment opportunities.

Those who have bought off-plan recently will find it harder to bear as their properties may now be worth less than they have to pay for them, even though they may not be finished.

There were some issues in Spain in recent years with retrospective planning permission and this bad news may have rubbed off on the recent falling valuations.

Of course, one man’s cut price sale is another’s cut price purchase and there could be some bargain opportunities with prices back at levels not seen for three years. For a buyer looking for a long term investment or holiday home, then the market looks good. Advisors suggest avoiding property hotspots, saying buyers should seek out less developed areas on the coast, or inland.

Further advice suggests negotiating on price and asingk for the highest spec. The final word is that prices may not have reached their low point.