Torcal Estates Fincas and Country property - Málaga, Spain

Fincas and Country property - Málaga Property

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News - December 2007

A Review of 2007

Well, the year has certainly had its ups and downs!

For many people the year has been a difficult one with a change in the market place that has meant a completely new approach to property in Spain.

For the first time in 10 years, the Spanish property market has shown signs that the boom is over and that the bust is just around the corner.

Thankfully, for Torcal Estates, the market inland is very different from that seen along much of the coastal strip. In the area in which we operate, there is significantly less property available (even during the boom times) and therefore supply and demand are still equitable.

This balance of supply and demand ensures that the market here remains stable even though the market along the coast is struggling. These localised variations are difficult for journalists to recognise and therefore many of the attention grabbing headlines that have been seen over the last 6 months will generalise. This does not show a true reflection of the property market in specific areas and can be extremely misleading.

Another reason why the “inland” property market is surviving better than the coastal market is that buyers tend to have different motivation for buying. Many buyers that have bought along the coast in recent years have been buying for investment reasons (even if the property is to be a permanent home) whereas many of the people that buy inland are seeking more of a change in lifestyle and are less interested in the investment returns of their purchase.

Whilst the global concerns relating to the economic climate may be affecting the ability of some British buyers to purchase a foreign home, the desire of other northern Europeans is strong. Recent reports confirm that Scandinavian buyers are targeting Andalucia as well as the existing markets of Dutch, French and Belgium buyers are all still showing strong interest in southern Spain.

As with any property market, the market here in Spain is localised. Many of the worst hit areas are stretching along the coast and this has generally been created by an over-supply of property, especially low quality and high density new urbanisations comprising flats and townhouses.

Many building companies and property developers have lost huge amounts of money and their profits are fast disappearing. For private property owners these changes have led to price reductions, a stagnant property market and high levels of stress and concern.

Developers and house builders react quite slowly to changes in the market. In addition, they also find it very difficult to stop building developments half way through so that means properties continue to be built and therefore come to the market just when they shouldn’t. This creates further supply against a dropping level of demand.

Thankfully, not everyone loses when a market turns, as ours has done. Those that are looking to buy for the first time get a wider choice of property and can negotiate a really good deal for the property that they choose. Whilst the price reductions hurt vendors in the pocket, many new buyers can now afford properties that they previously would not have been able to buy.

The reasons for the market changing are many and varied (and have not just materialised within the last 6 months). We, at Torcal Estates, recognised that the market was changing way back in early 2006 and this is why we have changed the way in which we approach the market. For us, the market has been challenging, however we always feel that a strong level of professionalism, high service levels and a good understanding of the market place, will ensure that we continue to offer our services to those that need our assistance.

Sadly, many agents simply do not know what is happening with the market and they find it very difficult to adapt their procedures to deal with these changes. Many agents provide such a poor level of service and this is why many have closed their doors and will continue to do so in the coming 12 months.

As mentioned previously, the market has changed due to a number of factors and influences – the state of the US property market, the slowdown in the UK property market, the global Credit Crunch and the increased number of potential destinations for buyers (especially the new EU accession countries). Whilst some of these influences do affect people directly, there are a number of reasons why buyers still want to consider buying a property abroad.

The majority of people that approach us at Torcal Estates are looking for a change in their lives. This could be a holiday home to enjoy occasionally, a rental property that they can use as well as generate an income from or a complete move to their dream home in the sun.

With a variety of motives, there are some things which every buyer can guarantee when they purchase in Spain. The pace of life is traditionally Mediterranean and offers buyers a relaxed, friendly and sociable environment to enjoy whatever property they have bought.

Another given is the weather. Thankfully, the weather is just as good as advertised. Golf courses, beaches, great nature, a link to the countryside, stunning views, culture and all this can be enjoyed all year round with a temperate climate, clean air and most importantly sunshine!

An important factor for many who are approaching or enjoying their retirement or have children to care for is the infrastructure and facilities that are available within Spain. The state-run healthcare system is excellent, public transport is widespread and cheap, access to and from the UK is easy and great value for money, the political situation is stable and there is the overriding comfort of being a part of the European Union to help protect all members.

So, whilst the market in Spain has suffered during 2007 there are a number of fundamental reasons why people are still considering a move to Spain during the next 12 months. With properties at a more affordable level, this could be the best time to make you move to the sun.

We, at Torcal Estates, are confident that 2008 will continue in a similar fashion to 2007 – for a more detailed analysis of our expectations for 2008, keep an eye on the website…

 

 



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