Editor’s Note: Taylor Wimpey España is a homebuilding company with operation in the UK and Spain that has been building homes in the Balearics, the Costa Blanca, and the Costa del Sol since 1958. Marc Pritchard, the Sales & Marketing Director of Taylor Wimpey España, talks about the business, and gives us his views on the market.
How long have you been building in Spain?
Where do you build?
Mallorca, Costa Blanca & Costa del Sol.
What kind of demand do you cater to?
Second / holiday homes in prime locations- lifestyle, typical age group from 40 – 65.
What’s special about TW homes, and what do you think attracts your clients?
Good value for money in prime locations from a name you can trust.
How have you found business in these crisis years?
Difficult but we are still here and probably in a stronger position than previous to the crisis.
Are sales going up or down?
Up since 2012
Who is buying and why?
We have sold to 25 different nationalities in 2013 and to 22 in 2014. The market has become much more international over the past 3 years with clients from northern, eastern and central Europe, Russia, and the middle east.
How do you see demand changing, for example in room sizes, personalisation, fixtures & fittings, and other product characteristics?
Modern design (not too modern and keep some of the mediterranean touch!!) open plan kitchens, personalisation very important – our clients can choose fixtures, fittings and floors up to certain dates.
What is happening to property prices in the areas where you build?
Prime locations with amenities and ideally beach in walking distance on the Costa Blanca, Costa del Sol and Mallorca are areas where prices are steadily increasing. Even some Golf developments which are not too far out are performing well.
What is happening to your own prices?
Sites which have been launched over the past 12 – 18 month and are built in phases are steadily going up phase after phase. We still are carrying with us some pre-crisis developments which are still hard to sell.
Many know about the Spanish property glut, and might think you are mad to be building more. Is there an oversupply of property where you build? If so, is it comparable to yours?
We would definitely not go into areas where there still is an oversupply. There is still only a handful of property developers in Spain actually actively building. The competition on the southern Costa Blanca is definitely the biggest. But if you look at the Costa del Sol and Mallorca there is still only very little activity.
Is it still possible to find good plots of land to build on the coast?
Possible but very difficult and prices are going up.
Have building costs come down in the crisis?
Are you selling off-plan? If so, what would you say to people who think it’s mad to buy off-plan in Spain today, given the glut of property and the problems many off-plan buyers had in the boom?
80% of our sales in 2014 have been off plan. I can only speak for Taylor Wimpey – buy off plan because you will get a brand new property, with the latest specifications, modern design, possibility to bespoke your new home with all the legal and bank guarantees you would expect from a well established and professional company!
Do buyers today get a better deal than buyers in the boom? Why?
Of course! Prices are still well below the peak of the market in 2005/ 2006. If you compare some of our developments which we are building in the same locations today and compare them to similar properties in the area built in 2005 the difference in price is approx. depending on location 30%. Have in mind that all properties we currently have under construction, roughly 500 units, are built under the new technical building code which means that insulation and energy efficiency are regulated under european laws which we have to comply with. If you buy a new property today you will get a much more energy efficient property than any property which was built until 2009 in Spain
Can buyers get mortgage financing today?
Yes, realistically 60% -70% LTV from spanish banks. However you probably will get a better deal if you decide to speak to your bank in the UK or most other European countries and, if possible, re-mortgage the property you own there.
Have you noticed any impact of the “Golden Visa” on the market?
Some Russian buyers have purchased having the Golden Visa in mind – but it has not had an important impact for our business.
Have you noticed the impact of international funds on the market?
They do compete against us in some land deals. Yes.
Have the banks still got anything interesting to offer?
I think all the good properties are sold and most of the properties they offer now are left overs.
Will moves to regulate tourist rentals affect the market?
The rental market needs to be regulated. Will it affect the market? It depends how it finally will be regulated. . It still is a very grey area .
What is your short term forecast for the market – transaction volumes and prices?
We, a UK Plc., would not make the effort and take the risk to buy land in the 3 regions we operate in if we would not believe in the market. – we have bought several plots this year. I think we will see a steady increase in volumes and prices – but I do believe it’s very much down to location of the properties.
What is the biggest obstacle to recovery?
We, TW, definitely are on the way to recovery.We have survived the past 6 years and are now in the consolidation period. I believe it is much more difficult for most of our Spanish competitors as they still have no access to the banks and liquidity.
Are you bullish or bearish about the Spanish property market?
Are you expanding in Spain, if so in which areas?
We are trying to expand carefully in the 3 regions we operate in.
Do you have any new product you would like to tell us about?
There are so many! – 14 active sites and a further 4 going live in the coming 3 month. Check our website www.taylorwimpeyspain.com with some great frontline beach sites.