Property markets are cyclical, and the time to buy prime property is now, during the bust, when everyone else is trying to sell. We could be on the threshold of the buying opportunity of the decade.
I’ve been bearish about the Spanish property market since 2004, and was expecting things to go pear-shaped 2 years before the boom started to show the first signs of exhaustion. Being a Cassandra for so long I started to think I was the only mug who didn’t understand the market, whilst everyone else got on with making money out of it. But I was always going to be right sooner or later, if only because property markets are cyclical, and always have been (though the long-term trend has always been up, in Spain at least).
My gloom may have been premature, but anyone heeding my warnings that prices might fall would have done well not to buy from 2004 onwards. But now, for the first time in 6 years, I think we are on the threshold of the buying opportunity of a decade, as we start the next cycle. Prices, in some cases, are back to where they were before 2004, and distress and capitulation are in the air. Property markets are cyclical, remember, and this time is no different. The time to buy is now, during the bust, when everyone else is trying to sell, not during the boom, when everyone else is buying.
But opportunists have to proceed with caution. There is still a lot of over-priced property on the market, and some of the talk about distressed sales and bank repos is just bluff. More importantly, there is a large glut of property that may not have a market today at any price; namely unattractive, poor quality flats in undesirable locations. It’s the biggest segment of the market and I believe it is doomed for some years to come.
The opportunity today, as I see it, is in the prime and A-grade segments, where thanks to the economic crisis and property crash you can now find attractive homes in superb locations for very reasonable prices. The worst of the crisis appears to be over, and most European economies are growing again. Many affluent Europeans are bound to be interested in a prime property on the Spanish coast, which means those properties are never going to be given away, and prices might not go down much further.
D’ya wanna know about the gems?
I regularly travel around Spain and get to see a lot of property, and sometimes I come across something that I think is a real gem. When I do, I have to assume that anyone thinking of buying property in Spain would be interested in hearing about it too. So as we enter this period that I believe could be the buying opportunity of the next cycle I will start reporting here on the real gems as and when I find them.
But for the sake of transparency, let me be clear about one thing. If I find a gem, then I am going to charge the vendor a fee to publicise it, as doing so creates value for both the vendor and potential buyers. If you have any doubts about me charging the vendor to tell you about it, then please, ignore everything I say. But if you are interested, and want to know more, then it’s up to you to contact the vendor for more information.
So, what have I got for you? Well, a real peach in Ibiza called Les Terrasses de Cala Tarida, no doubt about it. Something I think people will look back on in 10 years time and say “that was the time to buy”.
Les Terrasses de Cala Tarida, Ibiza
This project sold out in 2012. Several years later the properties were selling for several hundred thousand Euros more. It was fair to describe this as the buying opportunity of the decade.