Tinsa, the property valuers have recorded a 4.3% decrease in Spanish house prices from July to July. This figure continues to fall on a monthly basis, so if the trend continues Spanish property may be in positive territory by the end of this year. Imagine!
Unfortunately, these figures are based purely on valuations rather than actual real life sales prices, so they can be taken with a pinch of salt. Similarly, the Ministry of Housing figures are equally as skewed, reporting a decrease in Spanish property prices from peak to trough of 11.4%. Absolute fantasy!
I was having a conversation with someone involved in the property industry the other day who still thinks that 2007 prices were correct, because "people were paying the asking prices and banks were lending those prices". Well excuse me, but surely the current situation we are seeing here, is a direct result of a bubble, therefore pre-bust asking prices just won´t cut it with todays buyers. Let us not forget, prices should be driven by what people are willing to pay, simple economics.
How can you justify an apartment in Benahavis, with average build quality and only 85m2 selling for €450,000! Goldrush mentality and one hell of a bubble!
On the upside the Euro is losing ground against Sterling, so for UK buyers you are getting slightly more clout for your hard earned cash. Couple that with more reasonable vendors and much softer asking prices, in some cases, you can get a lot for your money.
For investors, this market is not for the faint hearted, so a long term view must be taken. You must know and understand the market here inside out before jumping in.