The Latest Spanish Property News from Kyero.com

Necessity is the mother of invention, they say, and the property sector is awash in necessity right now. Quite simply, houses are no longer selling on the Costa del Sol and the province of Malaga like hot cakes. The only response is to dream up more imaginative ways of selling properties, and this is what the companies are doing. Now, instead of putting the house on the market and waiting – a very short time, until recently – for a buyer to come along, the company sales departments are putting their heads together and coming up with a wide range of attractive offers, from free gifts to monthly payments and trips abroad. It may be a slow period for builders, but the advertising departments are working round the clock.

The latest sales techniques were unveiled recently at the Property Salon in Madrid (SIMA), and they give us some idea of the lengths to which the builders and promoters will go in their efforts to unload houses on us. Lotteries, gifts, discounts and easy payment facilities were being offered to attract the attention of the buyers at the SIMA fair, and they reflect the state of the market at this time. Property prices are falling all the time, and this is good news for buyers, especially first-time buyers. This is a positive aspect of falling house prices, in a market in which price negotiation and additional incentives played no part in the recent past.

One of the most spectacular offers is that of the Cordoba company Prasa, which proposes to pay a monthly salary to buyers for a period of a year after they have purchased a property. This promotion, which was valid only for the week of the trade fair, consists of a dozen cheques, each corresponding to three per cent of the purchase price of the house in question, to be paid each month to buyers of one of their houses. Company sources said this week that the promotion means a payment of, for example, 800 euros each month for a year to a person who has purchased a house whose monthly mortgage is 1,100 euros. “The only amount remaining to be paid is then 300 euros a month,” says a Prasa spokesperson. The offer was valid for, among others, five promoters selling properties in the city of Malaga, Mijas, Estepona, Chilches and Torremolinos. In spite of the fact that the Malaga market had a high profile in the SIMA fair, through many big national building companies (only Madrid had more houses on sale at the fair), there were relatively few local or regional companies represented at the fair. One of those that were there was Sando, whose most important offer was a discount of up to 20 per cent on houses purchased during the fair. The company was promoting a total of 18 residential developments in such diverse places as Madrid, Andalucía, Valencia and Warsaw. Plans for the future of this company include the building of more than 5,600 houses in Eastern Europe. The strategy used by this company – the offer of attractive discounts for the duration of the fair – was also the most common form of marketing at the SIMA trade fair, even if many of these discounts took the form of monthly gifts, purchase price reductions and loan facilities. The Alcalá 120 company, for example, offered discounts of up to 20,000 euros for two promoters in Madrid, while Afirma proposed the return of 20 per cent of the deposit paid by the buyer.

But the price war currently being carried out in the sector goes a lot further than a trade fair. Many companies are offering bargains everywhere throughout the country. The Lar Group, for example, has launched what it calls its ‘Campaña 6% TAE’, which consists of the return of this amount of money – six per cent of the purchase price of the house – on the handing over of the keys. The total amount must not be more than ten per cent of the value of the house, however. According to the Lar group, the initiative means that in the case of a house valued at 350,000 euros, to give one example, the buyer pays half the amount before receiving the keys, which takes two years, and with an income of 17,304 euros on it over this period, the buyer is, in reality, paying only 332,696 euros for the house in question. The Malaga executive of the Ñ XXI Group, Emilio Jaime Sánchez, says that the key to property marketing these days is to motivate demand, as he puts it. “The company must adapt to the different circumstances as they arise, and the key to success is adapting to these changing circumstances,” he says. For this reason his company has initiated a series of measures aimed at stimulating sales, among them providing rental clients with a first option on the house they are renting, and not paying any deposit when purchasing. The scheme is aimed at people who may have the capacity to pay the monthly mortgage but do not have the savings needed to put a deposit on a house. Sánchez says that the Ñ XXI group has different formulas by which the company guarantees to purchase the client’s old houses, as well as additional incentives on the new house. “This is another incentive we are proposing to buyers, and if anybody buys one of our houses and then decides to sell it again, we buy back the old house as long as the client buys another house from our group,” says Emilio Jaime Sánchez. A spokesperson for another Malaga building company, the Hexa group’s Jesús Cabello, says that his company has had this same policy of guaranteeing re-sale of old houses for some time past. His company goes a step further, he adds, in that it offers the new house fully furnished, while the buyer is consulted on the choice of furniture and fittings before accepting the keys. Meanwhile, the company takes care of the purchase of the old house. Cabello says that another interesting company strategy is helping maintain clients over many years. “We offer our clients and employees a sum of money in cheques that can be spent in the El Corte Inglés department store, which has a comprehensive home furnishings section, if that client introduces us to somebody who then goes ahead and buys one of our houses,” says Cabello.

As far as many experts in the field are concerned, these discount and free gift policies are no more than a reflection of the property market at this time. Quite simply, it is a buyer’s market, and as one well-known Malaga builder comments: “Any buyer can walk into any show-house these days and come out the owner of a new house, because he can bargain the price down to what he is prepared to pay.” In other words, for the first time in many years, the client can lay out his own terms. As far as financial expert Agustín Ciatelo, head of IHS Consulting, is concerned, the important thing is not to frighten buyers away, because, as he says, they are still out there. More and more builders and promoters are turning to companies like his for advice, and the result is what we have today: a wide range of special offers aimed at attracting more clients.

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