With Spain into it’s seventh year of a housing bust, prime residential properties in Spain’s biggest cities are starting to look like a good investment, say property professionals.
“We are very close to the bottom for prices of residential and commercial property,” said Jaime Pascual-Sanchiz de la Serna, a director at the property consultants Aguirre Newman, talking to the Spanish financial press about real estate prices in central areas of cities like Madrid, Barcelona, and Santander.
“Everything that is exclusive and of good quality is resistant to price [falls],” said Adolfo Ramírez-Escudero, a director at CB Richard Ellis Spain, who also pointed out the best opportunities are properties in need of refurbishment.
But outside of prime areas, the experts warn that cheap does not necessarily mean a good investment. In parts of Gaudalajara, Toledo, and Castellón (Costa Azahar), where there is a big glut of property for sale coupled with weak demand, prices that are already down by as much as 80pc could continue falling until the glut has been absorbed, which can take years yet.
speakfreak says:
These guys have been saying the same thing since the crisis began and year after year they are proven wrong. I wish these so-called experts would support these blanket statements with logic and reasoning instead of trying to pretend that somehow city centre/Ibiza/refurb/commercial or whatever are somehow immune to the rot that is hitting the rest of the market! The reality is that there’s only one rule in property and that is supply and demand. On the supply side there are few restrictions. All that nonsense about Barcelona running out of land! There are lots of gap sites in Barcelona city centre. There’s still large (customer-free) car dealerships located on prime real estate- even one on Rambla Catalunya. There’s even still a massive prison in Eixample- in any normal world that would have been relocated to somewhere near the airport years ago and housing built in its place. On the demand side what’s interesting is that the crash is starting to hurt the wealthier people. Their businesses aren’t earning the cash that they used to so after laying off their employees (hence causing the earlier crash on mortgages based purchasing of cheaper homes) they now are suffering themselves killing cash based purchasing of expensive homes. Even the more financially astute of them know that the rest are suffering so know that the only way is down so will keep waiting. The only possible increased demand is coming from the Russians but soon they’ll have their own problems to deal with as Putin asks for his money back.
Francois Catto says:
So called experts !!! Yes our grand economists are now forecasting that 2013 and 2014 Spanish GDP will be slightly down, maybe be -1%. Wonderful. Tell me a lie ….. -1% when France will have a negative GDP change and Germany will at best finish flat. Again they are talking their own book. Spain GDP will decrease by 4 or 5% in 2013, unemployment will reach 29%. It is going to be another economic disaster year. Prime properties.. let me laugh when we receive everyday offers for half the buildings in Serrano. No no and no !! It is too early to buy. 20% vacancy rate, with commercial rents dropping sub 10 Euro/m2. CBRE just left its magnificent tower at 21 Euro/m2 (Picasso tower) to go 400 meters away at 10 Euros/m2. So 120 Euro/year capitalized at 10% makes real estate price at circa 1200 euro/m2. Here is the fair value. But feel free to overpay… I will buy it back from you in 2 years time at 1200. Have two lovely years and contact me when you will be happy to find a buyer at 1200. I shall be there:)
David RG says:
Again the gurus of the real state sector, claiming that we are hitting rock bottom prices and now the opportunities will flourish….Just as a matter of fact, why dont they put their money where they put their mouth and Aguirre Newman and CB Richard Ellis don´t start purchasing all those candies for them selves¿?
They are full of shite, the property market will continue in a dramatic fall as the country is doing so.
Corrupt and incapable PP at office… foreign investors mesmerize about all the media highlights, let´s name them: corruption, unemployment rate, dull youngsters good for nothing, lack of investment on R&D and what is more worring no productive sector as an alternative to the real estate and property promotion as the thrust engine of the domestic economy…who will put a penny here having the chance to invest in up-market emerging countries?
I rather invest in Southern Asia or SouthAmerica than here, and in a couple of years or 3 rape the profit as it will be a better scenario…
The country will go for about 10 years of flat economy as bad as Japan did in the 90´s.