The Spanish property market will offer some juicy opportunities in 2011, but banks are still withholding their best properties, says market insiders. Small city-centre flats will be the best buys in 2011.
A recent article at the Spanish financial website Finanzas.com gave tips on the best Spanish property opportunities next year from a group of real estate ‘analysts’. (In the worst tradition of Spanish journalism, the article didn’t clarify who was being quoted and why, so we will just have to assume they are people who know what they are talking about.)
One property sector inside called Acuña says that small city-centre flats will be the best investments in 2011. “2-beds sell better than 3-beds, and 3-beds better than 4,” he said.
But another ‘analyst’ called José Barta warns there is a glut of small homes, so not all 2-beds will do. “Recently, too many small homes have been built. Now you have to look for niches where there are shortages,” said Barta.
Elisa Morillo of Foro Consultores, quoted in a seperate article, argues that 3-beds are the way to go, thanks to a relative scarcity of this type of home. Cost cutting and expectations of smaller families lead developers built too many studio flats and 1-2 bed homes during the boom, she argues, and not enough 3-4 bed homes.
The banks have a lot of property for sale, and some agents are making a song and dance about bank repos, but do banks have anything interesting to offer? Not according to Barta. “In the end, the banks are only offering the worst of what they have,” he says.
The best opportunities for good rental yields will be found on the outskirts of cities, especially Spain’s mid-sized cities like provincial capitals, says Ferrer-Bonsoms, another ‘analyst’. Many of them already come with 100pc financing.
Along with niche-hunting, Barta also recommends holiday buy-to-lets on the coast, but not everywhere. “Most of all, in places where the Germans and the British like to holiday,” he says, recommending the coast of Catalonia (Costa Brava & Costa Dorada), Mallorca, Menorca, and some parts of Alicante. Carlos Ferrer-Bonsoms (Jones Lang LaSalle) would add Almeria (sticking to 2-beds and the best locations), where he says you can get discounts of up to 50pc.
But Nicolás de Sangenis, another ‘analyst’ quoted in the article urges investors to be cautious about buying on the coast, saying prices could fall in coastal areas by up to 20pc next year.