Property Bargains Drying Up On Spanish Coast

Costa Brava, Girona Province, where house prices fell 17% according to Tinsa
Costa Brava, Girona Province, where house prices fell 17% according to Tinsa

The era of property bargains on the Spanish coast is coming to an end, according to a recent article in the Spanish daily El Pais, based on data from a market report by Tinsa, a valuations company.

Adaptation and translation of an article published by El Pais.

Spain’s sun & sea combination has offered property bargains for the last few years. For example, homes on the coast in Casares (Malaga province, Costa del Sol property), Canet d’En Berenguer (Valencia property) or Ayamonte (Huelva province, Costa de la Luz property) have gone down by up to 60 per cent.

But now those who have set their heart on a holiday home in Jávea (North Costa Blanca property) are going to have to do their sums. Prices in this Costa Blanca resort have gone by nothing short of 11 per cent in a year, bringing the square metre cost to €1,658. The latest prices apply to the few new projects currently underway, including 40 new homes being built by foreign and Spanish developers.

So things starting to change. The list of beaches where prices are still going down is getting shorter and shorter. “A total of 35 resorts have seen price rises between Q1 2014 and Q1 2015. Last year, only four registered increases,” reports the valuation company Tinsa, in its latest study of new and resale property on the coast. Prices have gone up by between 5 and 9 per cent in Chiclana (Cadiz province), Adeje (Tenerife), Punta Umbria (Huelva province), Vilagarcia de Arousa (Pontevedra province, Galicia property) and Soller (Mallorca property).

Not everything is over for bargain hunters. There are 29 resorts along the Spanish coastline where properties have gone down in price by over 10 per cent during the first three months of this year. “Palafrugell, in Girona province (Costa Brava property), leads the list with a year-on-year drop of 16.9 per cent. Next comes Barbate (Cadiz province, Costa de la Luz) with a 15.3 per cent decrease and Gandia (Valencia province) with a fall of 14.6 per cent,” Tinsa explains.

So prices are rising at some beach resorts, and falling in other. In some – the majority – construction has come to a halt, while in others cranes are back in operation. In Ibiza, for example, it’s estimated that around 100 properties have been started. And “in Marbella, stock is running out and there are already several new-build developments with a reasonable rate of pre-sales and sales. There are even developers interested in finishing buildings where construction was halted,” points out Carlos Smerdou, managing director at Foro Consultores, an estate agent.

That is how things stand, although the situation in the holiday home market is tremendously varied, and needs to be looked at under a microscope. To buy the most affordable properties you need to go to the Costa Azahar (Castellón province) where the square metre costs €804. Or to areas further from the beach such as Puerto Lumbreras (Murcia) at €823 a square metre. “Affordable coastlines are those in Castellón or Murcia, where there are still areas oversupplied with homes, but the good news is that the speed at which the stock is being sold is faster than in previous years,” explains Smerdou.

Anyone looking for bargain new homes on the beach will need to catch a plane. “The cheapest coast [for new homes] is the Canaries with prices around €1,250 a metre,” Says César Hernández, director of Market Analysis at Tinsa, a valuation company.

Luxury destinations, in contrast, start on the Costa Brava [and Barcelona’s coasts], continue in the Balearics, and end on the Costa del Sol. Sitges property is most expensive [just south of Barcelona], with a price of €2,504 a square metre. Next come Calvia, Andratx and Alcúdia, all in Mallorca, according to Tinsa statistics.

When it comes to really high-end property, Mallorca has no competitors. “In Mallorca a new luxury property segment of the market is emerging with prices around €5 million against the €2 million set a few years ago. The improvement began in the southeast and now it’s spreading across the whole island,” claim Engel & Volkers, a franchise chain of estate agents.

When it comes to a beach property most buyers are divided between beaches in Alicante and Andalusia. The five coastal resorts that registered the highest number of sales in 2014 were Torrevieja, Marbella, Orihuela, Mijas and Estepona, all according to data from the Spanish Ministry of Development (Fomento). On the Alicante coast recent new builds are not common but each coastal resort tends to build between 30 and 60 units a year. Playa Paraíso, in Villajoyosa, stands out, with 60 new properties built.

Buyers are clear about the characteristics they want. “Demand hovers around 70 and 80 square metres. There’s currently a trend to find slightly larger properties than before, bearing in mind that you can find bigger properties for lower prices,” Hernández says. Other clients sacrifice space in favour of greatest proximity to the beach.

Tinsa’s conclusion: “A typical holiday home on the coast costs €123,000, is in good condition and has two bedrooms and around 84 square metres.”

Spanish Property Insight adapts and translates selected articles from the local press for the benefit of non-Spanish speakers.

This translation is based on the following article (in Spanish): Los saldos en la costa se acaban

+ Related article: Life Returns To Coastal Property Market

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