In so much as the Spanish property market is much like the British property market – it is regional and indeed very local.
What happens in Madrid does not necessarily have any affect on the CDS and vice versa. Equally so with Murcia and CDLuz.
Having worked through the recession of the early 90’s in the UK (within the property sector) I see many similarities between then and now.
There is no doubt that the CDS is in for a hard 2 years. Oversupply of property and a lack of buyers will mean many properties unsold, many estate agents going bust as well as a few property developers/builders/promotors.
Many vendors will have to adjust to the fact that property prices do fall (and I would have thought many will have experienced the early 90’s) although London and the SE was more severly affected. If you have to sell then get realistic – if you don’t need to sell, wait.
That doesn’t mean for one moment that you should not consider buying (indeed at some stage the prices will become so attractive that the market will start to revive itself naturally) but you should consider buying on a number of factors (probably very different from the majority of British buyers in recent years), these include:
Don’t buy to make money – most people will happily enjoy the next 2/3/10 years living in the sun without needing to see a 20% return on investment.
Buy in the right area, a develoment or type of property that you actually want to live in. Don’t buy new. Don’t buy on the coast (unless you really want to be there)
If you buy for investment, treat the deal as a long term investment (at least 10 years) and the chances are you will make money.
Don’t buy to rent out. It doesn’t work unless you have a particularly unusual or attractive property.
The market is still active inland. Indeed, many people from the coast are looking inland to improve their environment, enjoy a more Spanish life and get better value for money.
In answer to the original question I guess it depends totally on what you want from your purchase – investment return or lifestyle change. If you want a better lifestyle than the UK then it is here and you could pick up a bargain over the next 2 years.
If you want an investment I would wait for a while and see what happens – especially on the CDS.
Where do you buy? Well not on the coast. Too much crap has been built (and still is) whereas inland I feel there is still a chance that things will not be destroyed by the development of southern spain.
At the end of the day, you should buy because you want a place to live – property as an investment is fine if you understand property and the market as a whole. I would never put my money in to the Stock Market because I simply done’t understand enough about it.