[Anonymous]

I’m trying to work out if anyone wants to buy on a golf development in Murcia these days. Is there any demand for this product?

Do you? Do you know anyone who wants to?

If not, is a just a question of price, or better alternatives, or just no interest in owning property on a golf course in the sunshine?

Obviously this question is only relevent to people entertaining the idea of buying a property in Spain (or renting).

Mark

[logan]

The problems for golf developments in Murcia from an investors point of view is that in recent years they have built far too many. At least a dozen in a relatively small geographical area. The recession has hit these developments hard.
In this region of Murcia, tourism is also relatively under developed compared to other more populated costal resorts.
Intensive agriculture is probably the historical reason and the province of Murcia is not particularly attractive. Seas of plastic creep ever closer to the tourist infrastructure.
Apart from the city of Murcia the region is under populated with little local employment available. Agriculture employs immigrant labour on a poverty wage.
That said the regional government has spent billions on civil engineering in recent years. A massive road building plan now almost complete and a new international airport under construction makes communications arguably some of the best in Spain.
However the problem still remains that there are just too many golf resorts in the province with massive overbuild of apartments, small terraced housing and some small villas. Golf is a popular sport but not that popular and it’s also an expensive pass-time.
Supply massively exceeds demand. Therefore rental prospects are poor or at best spasmodic. In my experience golfers prefer hotels, family’s private villas with pool.
Although some of the courses are excellent they are often quite some way from the coast and significant services.
Add to that the catastrophic fall in value from peak of most of these apartments. The high cost of community charges to support the requirement to maintain the vast existing infrastructures, security, public electricity et al. (typically up to 1400 Euros per annum per unit.)
The future investment prospects in my opinion look very poor indeed. With no capital appreciation for many years and the risk of value deflation, rising overheads it’s not an attractive prospect.
I have in fact spent some time in the area recently considering such options lured by superficially attractive deals from banks and that was my conclusion.

[katy]

Being a golfer I have probably met hundreds visiting courses on the CDS. What they don’t want is to stay on a golf complex isolated from restaurants and nightlife. Neither do they want to be limited to playing just one or two courses in a week. Ideally they want at least 4 courses close by. Most golfers wouldn’t even dream of living on a golf course either. Usually most of the people who buy into these complexes aren’t golfers and they think they are going to rent to masses of golfers clamouring to stay sef-catering in some out of the way place and little choice of bars etc.

[Chris M]

I would concur with Logan and Katy.

I would add that some fairly intensive research undertaken some years back found that Playing Golf was a factor for less than 3% of our purchasers, there are far, far more important issues, and like Katy being a golfer myself it wouldn’t be an important part of my decision to buy either.

I like the expression though, that someone used with me years ago, when they said that a golf course was great landscaping for real estate, and it is, La Cala Resort on the CDS really looks amazing these days, and I think does really well with its Golf, but its value as landscaping is just awesome really.

[Anonymous]

Well I did put a deposit on a golf resort in Murcia, on Polaris World almost 7 years ago now. However, I decided not to proceed with the purchase and pulled out before the thirty days and got most of my money back. Turned out to be one of my better decisions in life.

I got caught up in the hype of Spanish property and placed my deposit off plan and without even seeing the resort (I had visited and played golf in the area several times though). The deposit was subject to inspection visit so I was not totally swept up in the hype.

The inspection visit did convince me not to proceed. I agree with a previous poster, the plastic fields are not very pretty. I also calculated that there was not enough airport capacity to fill all the Polaris World and other resorts on a weekly basis so all the rental promises by agents were meaningless. So I made the decision not to proceed purely investment/financial grounds. If I had wanted just a holiday home without any rental consideration, I would certainly not consider any resort in the middle of the boonies with little or no amenities outside of golf. I would always prefer to stay in a villa or apartment close to the coast and close to a town with a good variety of restaurants and bars.

I do think that some people who have bought on these resorts suffer from self-reinforcing delusions. Once bought, you have to go there for your holidays, and you convince yourself that it is a great place for holidays because you have bought there.

People should objectively question if they themselves would pay to stay for one or two weeks in an isolated golf resort.

KPW

[Anonymous]

All thoughtful, valid points. Thanks.

[logan]

Your decision was indeed wise KPW. Investors in these developments are sitting on a 60% loss from peak and it’s getting worse. Add to that rising overheads and lack of return from investment and it is indeed pain in Spain. Even taking into account the fluctuation in exchange rates from peak to today and the loss is still there. The banks have repossessed hundreds of apartments in every resort both from the bankrupt developers Polaris World and investors who defaulted.
I guess the real question is what future do these developments have?
The golf courses will remain a viable business but as I see it there is little else to be positive about. Even if the EU economy recovers I cannot see investing here is a sensible project. I also think that for someone less interested in returns and wants a holiday home. There are so many other more attractive prospects in vibrant coastal resorts than in the wilds of Murcia with little choice of amenities.
So I think the answer to your posted question Mark is a NO.

[Anonymous]

I agree in most aspects. Far too much built in such a small space of time. The original idea of Polaris was pretty good, the pitch, really well done. Each development was self contained and there were always good restaurants and nightlife, etc…but that limited offer can only last so long and you neither have captive audience, nor people are going to do with just what you offer them.
Some of the projects are totally empty, with a 1-2% of owners living on the site…but how long can the firm running the course keep up maintanence? Will we see golf courses being churned up for the far more (nowadays anyhow) intensive agriculture?

[Anonymous]

Good article in The Guardian about the fate of Polaris World resorts and others in Murcia.

http://www.guardian.co.uk/world/2012/may/25/spanish-property-polaris-homes-crash

[Anonymous]

Good article in The Guardian about the fate of Polaris World resorts and others in Murcia.

http://www.guardian.co.uk/world/2012/may/25/spanish-property-polaris-homes-crash

[Anonymous]

Was always struck how close in proximity the Polaris World properties are to the course itself. Living front line on a golf course you pay a premium but lose privacy, imagine a steady procession of strangers passing by your pool all day, golf buggies, hearing profanities, seeing some relieving themselves, others spraying golf balls or chemicals all over the place. Can’t for the life of me see the attraction in living alongside that, and I play golf, badly.

The rental market is predominantly largish same-sex groups in the main, young and old, that also look for a certain social experience away from the course, clubs/bars/restaurants etc. Often these groups prefer to play different courses during their stay, so to rent near a beach resort with all its attractions, and hire a mini-bus makes sense; investors would be aware of this too.

There’s also the issue of greed, had PW built 1 or 2 really high end exclusive resorts, rather than the 7, it might have had a chance. They don’t appear to have fully determined the demand, or the needs, of their market. Folly.

[Anonymous]

Was always struck how close in proximity the Polaris World properties are to the course itself. Living front line on a golf course you pay a premium but lose privacy, imagine a steady procession of strangers passing by your pool all day, golf buggies, hearing profanities, seeing some relieving themselves, others spraying golf balls or chemicals all over the place. Can’t for the life of me see the attraction in living alongside that, and I play golf, badly.

The rental market is predominantly largish same-sex groups in the main, young and old, that also look for a certain social experience away from the course, clubs/bars/restaurants etc. Often these groups prefer to play different courses during their stay, so to rent near a beach resort with all its attractions, and hire a mini-bus makes sense; investors would be aware of this too.

There’s also the issue of greed, had PW built 1 or 2 really high end exclusive resorts, rather than the 7, it might have had a chance. They don’t appear to have fully determined the demand, or the needs, of their market. Folly.

[Anonymous]

I have just checked the Polaris World forum to see if anybody has posted a link to the Guardian article – as yet nobody has. I would post it myself but they tend to get quite animated with me if I post anything remotely negative about the resorts.

I do still keep checking the prices of PW property with half an eye on picking up a bargain. But the description of the resorts as ghost towns has completely put me off.

[Anonymous]

I have just checked the Polaris World forum to see if anybody has posted a link to the Guardian article – as yet nobody has. I would post it myself but they tend to get quite animated with me if I post anything remotely negative about the resorts.

I do still keep checking the prices of PW property with half an eye on picking up a bargain. But the description of the resorts as ghost towns has completely put me off.

[Author]

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