Optimism for Spanish Property in 2010?
December 22nd, 2009
I really wish I could close 2009 on a brighter note regarding Spanish property – but no amount of positive thinking can make the current situation look bright.
Spanish Banks Prefer ‘No Sale’ Above Paper Loss gives us a first-hand account of why repossessed properties via Spanish banks are almost always such poor deals.
We also found this out the hard way – and I’m now hopeful that key-ready Spanish properties are currently the best route to finding realistically priced properties.
The difference is that these properties are available direct from the developer – who need sales to prevent the banks from taking possession. Unlike the banks, developers can act more quickly and negotiate from a more realistic property valuation.
Remember I told you about a Spanish property auction organised by A Place In The Sun? Unfortunately, that met with little interest.
A report in Overseas Property Professional magazine concluded:
.. Bidders were only interested in the two ‘no-reserve’ properties, which received offers of around €100,000, said auctioneer Jonathan Ross of Barnet Ross. It suggests that to offer Spanish property to a UK audience they need to be ‘no-reserve’ or at a substantially lower price than the market perceives it to be worth.
Thankfully, Peter Christian has something a little more cheery in Drink To A Happy Holiday.
Finally, I was recently asked by the International Property Journal for my 2010 predictions for the overseas property market. Here’s what I said:
The differing pace of economic recovery between nations will create activity between buyers and sellers.
In Europe, the stronger German, French and Dutch economies will allow buyers from those nations to seek and aggressively negotiate property deals in the slower-to-recover European countries – Portugal, Italy, Ireland, Greece and Spain.
Even though there is no currency exchange advantage for these buyers, one Euro is worth a lot more property in these PIIGS countries in 2010 compared to 2009.
If the US economy continues to improve and the US dollar increases in strength against the Euro, we could also see opportunistic US buyers sniffing out deals in those slower-to-recover countries.
This buyer activity is already happening at the top end of the market in the UK where foreign buyers are taking advantage of the devalued pound, a slow moving property market (tipped to get slower in 2010) and a stalled economy.
Expect more of the same for the UK and the phenomenon to extend to more countries in 2010.
I hope you have a great holiday break and that you’ll join me again in January to see how the Spanish property market starts shaping up in 2010.