“2007 was bad, and 2008 will be worse,” says Andrew Lupton, head of Stacks Relocation Spain, a relocation and buying agent covering Almeria, Murcia, and the Costa Blanca. “The number of buyers was already down in 2007, in some places by as much as 80%. Now banks have stopped lending because of the credit crunch, hammering what little demand there was left. Any buyer with funds in 2008 will be king.”
According to Lupton, property prices in some areas popular with British buyers are already down by 20% or more compared to a year or two ago.
“In Javea on the Costa Blanca you can now get a 4-bedroom villa with a pool on a plot of 800m2 for 400,000 Euros that would have cost you 500,000 a year and a half ago,” explains Lupton. “And inland in Murcia, near attractive towns like Caravaca, you can now buy a 4-bed, 2-bath resale villa in reasonable nick with a pool and a bit of land for around 230,000 Euros, down from 280,000 to 290,000 Euros a year ago. This kind of property still appeals to active retirees who want an outdoor lifestyle with space to do things like walk the dogs. They don’t want to be crammed into a small apartment by the beach.”
Ken Whettalll, head of Spanish Property Shops Group in Los Alcazares, Murcia, also sees evidence of serious vendors accepting big price reductions, or even selling at a loss.
“One vendor has a current bank valuation 410,182.00 Euros, but will accept 280,000 Euros for a quick sale. That’s what he paid in early 2003, before spending thousands on improvements,” says Good. “ 12 months ago I could have rung 5 or 10 clients who would have jumped at it at 280,000, but right now, I can’t think of anyone to contact as my client database has suddenly become very inactive. I have noticed several developers increasing their commissions to the agents in an effort to bring more clients, they don’t seem to have grasped that, at present, there aren’t any. ”
There is no telling how far prices will fall in the most over-developed areas of Murcia and the Costa Blanca, for example Orihuela Costa, Torrevieja, the La Manga strip, or some of the least attractive, high density, golf developments in land.
© Mark Stucklin (Spanish Property Insight)