December 14, 2015 at 2:03 pm #188677RicardoParticipant
It would be valuable to know what people think about the vast number of substantial properties, like mine (pictured), currently for sale en el campo, which show little or no sign of moving.
Before the Crisis, my 19 hectare cortijo and country estate, in the north of Andalucía, was valued at 700,000Euros. Today, it struggles to attract potential buyers at 300k.
Looking on the internet, there are hundreds of rural properties – many well equipped and in beautiful condition – which are in a similar position.
We all know it is a case of ‘having to wait until the market recovers’. I always thought it would take ten years – and that seems to be likely given the uncertainty about investment in property in Spain. I have seen this a number of times since the 1960’s where successive waves of foreign buyers came and went. But this time, the depth of the recession, lack of credit, legality issues and fear of Spanish regulatory inconsistencies seem to be holding UK buyers back. The Brits are different to other continental buyers in that they tend to own rather than rent houses and therefore have more immediate purchasing power. When I came out to Spain fifteen years ago and bought a ruined cortijo on 40 acres of almond and olive terrain, it was like the Wild West. You paid in Pesetas, hired builders for cash and sought permissions later.
Not any more (thank goodness.) Today you have to know what you are doing before investing your money whether it be on the coast or in the country. But for, say, a young family, with practical skills, a desire to learn the language and a willingness to respect and embrace the Spanish way of life, the opportunities for living a satisfying, open-air life, free of debt, are better now than they have ever been. You can pick up substantial properties in the country for the price of a studio flat in outer London, or a two up, two down terraced house in the north of England.
January 13, 2016 at 5:39 pm #189046Barbara Wood – Property FinderParticipant
Mark Stucklin asked me to take a look at your post and reply. In my view the rural market has returned to what it was before the boom, that is, a very small niche market for a tiny minority of international buyers and I believe that is where it will stay. Before the crash I doubt 1% of overseas buyers had any interest in inland properties and even those that did would have been looking at established, well-known locations such as Gaucín and Ronda. You don’t say exactly where you are but it seems to be well north and even in the boom there was very little demand for isolated locations in the deep interior; places such as Antequera, Iznájar, Coín, Alhaurín were fine, inland without being completely cut off from everything. Most people buying inland were not moving full-time, they were looking for a holiday home and wanted to be within one hour maximum from Málaga airport.
So the typical buyer in the country is a lifestyle purchaser who wants nothing to do with the coast. However, it is my opinion that the majority of those who bought in the country in the boom years before the crash were not lifestyle purchasers, they were priced off the coast and went inland not by choice but by necessity, it was all they could afford. This segment of the market has completely disappeared and, with prices so much lower on the coasts, even in the most prime locations, it will not return. In addition, now that planning regulations are strictly enforced few people will consider the option of refurbishing a dilapidated property and the banks, who are happy to lend to overseas buyers on the coasts again, always were, and remain, reluctant to lend in the case of rural properties. With so much bad publicity about demolitions in the countryside, thousands of illegal properties, town hall corruption etc., for most British buyers, who made up the majority of overseas buyers in the country areas, purchasing inland now seems a very unattractive option.
In the two years before the crash about 80% of my clients asked me to find them a rural property. Typically they had budgets between €250,000 and €500,000, which would have bought them absolutely nothing on the coast but was more than enough for a good location inland. In the eight years since the crash I have had only one serious client who only wants a country house and then a maximum of one hour from the coast. If you say your property was valued at €700K before the crash, although you don’t say by whom, €300K doesn’t sound that far off, although it is very difficult to value a property when there really is no market.
The Property Finders
Mark has posted my 2016 market report here: 2016 Southern Spain real estate market report by The Property Finders
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