Property Buyers Return To The Spanish Coast

ibiza-palacio-bardaji-terrace

The Spanish coast is back in favour with second-home buyers. Prices have fallen 47.7 per cent since 2007 according to the valuation company Tinsa. That said, in some areas, and depending on proximity to the coast, holiday homes have fallen up to 80 per cent in price, and today you can find apartments for €50,000 or less.

Adaptation and translation of an article by published by El Pais.

“As a result of the supply left after the property boom, it’s easy to find products at competitive prices, and in some cases, at prices below what it would cost to build from scratch,” says Darío Fernández, Residential, Urban and Land Director at JLL.

Bagging one of these bargains still available on the coastline – and there are fewer and fewer of them – will be one of the objectives of bargain-hunters in the forthcoming Easter holidays. For example, in Torrevieja (Alicante) there are 1-bedroom furnished apartments, near the city centre, and just 200 metres from the beach, for only €50,000 says Pedro Menarguez, owner of Marsol Internacional.

Frontline beach property has a higher price tag: a 2-bedroom apartment in Torrevieja costs around €130,000. Marsol Internacional, who specialise on the Costa Blanca – one of the most dynamic coastlines – claims to be selling properties priced at 70 per cent below their value in 2006.

There are bargains to be had both new and resale: Key-ready new apartments with 1 to 3 bedrooms within 800 metres of the beach at Campoamor (Aguamarina) are on the market starting at €91,000, explains Joaquín Martínez, Sales Director at Grupo Mahersol.

It’s now clear the market is moving on the Spanish coast. More property is being sold and at better prices, caused partly because of aggressive reductions from banks, involuntary owners of a large part of the unsold stock. “A slight recovery – 14 per cent – in closed transactions on the coast in 2014 has been seen, still behind the 20 per cent in Spain as a whole,” says Fernández. “Between 45 and 75 per cent (depending on the coastal area) fewer properties were sold compared to the peak of the property boom.”

In Marbella and surrounding areas, there are almost 20 new developments. Demand for second homes have gone from 100,000 in 2005-2006 to 20,000 now. “This trend is starting to rise little by little,” points out Chus de Miguel, Sales Director at Casaktua.com, a portal that has noticed an increase in sales on the Mediterranean coast, specifically in Andalusia, the east (Costa Blanca) and Catalonia.

“An obvious sign is that available stock in places like Marbella is running out, and cranes have started to appear,” says Carlos Smerdou, Managing Director at Foro Consultores. In fact, in Marbella and surrounding areas, there are almost 20 new developments with reasonable pre-sales and sales rates. There are also developers interested in finishing buildings where construction was halted, and others looking for land in very specific areas with a shortage of supply.

It seems there is a two-speed market on the coast, and amongst buyers. Many Spaniards – above all, retired couples or those between 45 and 55 – have opted to withdraw their savings from banks where they get next to nothing in returns and buy a home on the beach in cash, particularly in La Manga, Castellón, the Costa Blanca, the Huelva coast and in Almería. “They feel that prices have bottomed out and are buying for investment and personal use,” Smerdou points out. “They’re looking for cheap properties priced at no more than €70,000 with two bedrooms and close to the beach with basic services,” says Menarguez. But the stars of the show are foreign buyers, who are now 80 per cent of the market on the coast.

When it comes to buying a beach property, not all clients get the same discounts. Frontline beach, with a shortage of supply, is the most expensive. At the same time, on golf developments some distance from the sea (Murcia, Casares and Manilva) – a product that was created for the foreign investor market – prices have gone down by up to 80 per cent, while frontline beach in established locations (Mallorca, Ibiza and Marbella) discounts rarely exceed 25 per cent, JLL explain. This makes sense because there’s a bigger glut of unsold properties on developments in land. In the area of Marina d’Or (Oropesa del Mar), apartments that were once valued at €240,000, are now on sale for €70,000. Prices are double that if you choose frontline beach on the Costa del Sol where a high-end property with two bedrooms costs from €200,000.

There are offers for €60,000 on the Castellón and Almería coasts. Going north to Galicia, price adjustment has been considerable, particularly on the Mariña coast in Lugo province (Foz, Burela, Viveiro, Ribade) where a 2-bedroom apartment costs as little as €38,000. In the Balearics, 90 per cent of buyers are foreigners, and the Canaries stand out as the area that has best survived the crisis over the last six years, especially in the south of Tenerife and Gran Canaria where there’s little supply.

If buyers look only at price and not location, there are plenty of options. There are properties for €60,000 on the Costa del Azahar, for example in Moncófar, and on the Almería coast in places like Roquetas del Mar. “At JLL, we’re selling a property development in Vera (Almería) linked to golf where there’s a 2-bedroom duplex apartment for €70,000. The distance to the beach is under a kilometre,” says the company’s Residential, Urban and Land director.

Nowadays you can find properties, front and second line beach, “at very good prices, under €80,000, on most of the Spanish coastline, especially on the Andalusian, eastern (Costa Blanca), Murcia and Catalonian coasts,” says Casaktua.com, a bank sales portal: an apartment with 85 square metres and 3 bedrooms in the centre of Aguadulce (Almería) within a few minutes of the beach costs as little as €47,300.

But buyers also need to bear in mind infrastructure, communications, services and, obviously, distances. “What’s the point of buying a holiday property 1,000 kilometres from home if you can’t use it?” points out Fernández.

The Germans and Belgians have the best budgets. Foreigners accounted for 1,095 purchases in the last quarter of 2014, 16.7 per cent of the total, according to the Spanish Ministry of Development. “The Russians, Germans and Belgians were the ones who invested most in property purchases in 2013, and this was also the case in 2014, although the Russians to a lesser extent because of currency exchange and their economic situation. The Germans and British are back as well as the French and Scandinavians,” explains Carlos Smerdou.

The British continue to lead the league table in terms of numbers of buyers, but they buy cheap properties, between €100,000 and €150,000 in golf and coastal developments away from the beach. “Their grandparents and parents bought on the Spanish coast, which gives an indication of the traditional link these clients have had with our coast for over 40 years,” says Darío Fernández. Residential, Urban and Land director at JLL. The Germans buy properties over €350,000 and €450,000, while the Belgians buy around the €250,000 mark.


Spanish Property Insight adapts and translates selected articles from the local press for the benefit of non-Spanish speakers.

This translation is based on the following article (in Spanish): Las casas en la playa recuperan atractivo

Comments

comments

Leave a Reply