Alicanteos

The numbers of holiday properties to be sold in the next 5 years is excepted to be around 650,000 claims the real estate investment company Pierre & Vacances, Spain is considered one of the most attractive European country for that type of housing.

Costa Del Sol (Andalucia) is the most demanded area high level of tourist activities, services , golfs and profit make it attractive. Investing in Andalucia is considered safer than in any other area of Spain says expert from Pierre & Vacances, there is also little probability of price drop for Andalucia.

Speculation has stopped being the heart of the Costa Del Sol properties market, speculators have moved to new emerging markets such as Bulgaria, Brazil, Morocco and Dubai. Today, the typical investor for a property in Marbella is someone looking for a stable investment such as from rent revenue.

Technorati Tags: andalucia, property, market, marbella, investment

According to Enrique Llopis, Honourary President of the Alicante Real Estate Agents College, 300 estate agencies ceased trading in Alicante in the first seven months of 2007. This is quite a number. The numbers of agencies in trouble is estimated at 3000.
The most vulnerable agencies are the smaller and newer companies.

Prices are stable on resale properties but as I said in an earlier post , the time to sell a property is getting longer about 120 days. They are also less buyers at this period new mortgages over the first six months are down by 2.85%, that the first reduction in six years.

Technorati Tags: spain, property, market, mortgages

If you consider a mortgage loan to finance the purchase of your property, they are two aspects that will tell how much you can borrow.

The value of the property – A valuation company will determine the value of the property, in some case the valuation and the purchase price may differ greatly.
You pay the valuation process ( a valuation is like a survey report) whether you get the loan or not.

Income - Spanish lenders generally calculate a ratio of your net disposable income that will be used to repay borrowing and will want to ensure that you have the ability to service the loan. If it is a family or joint purchase then multiple incomes can be used. lenders usually
recommend that the monthly instalment you will have to pay for the mortgage loan, should not exceed a certain percentage -around 30%- of your monthly income. It is safer for you: you avoid the risk of non- payment if you have unexpected expenses.
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The landlord of an apartment located in Madrid or Barcelona can make as much as 8000 EURO a month by renting his property to tourists and I believe that, I remember I wanted to rent a very small flat in Barcelona near La Ramblas, it was 1330 EURO…I don’t understand these prices they are depressing.

A property of standard quality can bring a yearly profitability of 5% , this is higher return than the average 2% you can get by normal rent.

Many people entered this market during the last few years and the market will probably continue to grow, each time, I go to Barcelona I cantt see to find a room in a hotel…..If you have a flat in the center of Madrid or Barcelona you can get between 80 – 100 EURO a night.
If you wish to invest in that market it will be good to have the transaction made by a registered company that can handle insurances, keys, guarantee.

Technorati Tags: barcelona, madrid, rent, profit, center, property

According to an article posted on Fotocasa , there is a bit of fears about some risk on the Spanish properties market, promoters bought a lot of lands at high prices and they have no other remedy that selling to high prices says Oscar Martinez Solozábal president of Asociación Empresarial de Expertos Inmobiliarios (APEI).
He also see no signs of the real estate bubble deflating in the near future, if that bubble exists because according to other commentators the market is in normal condition and there is no bubble in Spain.

Technorati Tags: bubble, spanish, market, property

FirstRung.com gives a list of 10 tips for property investors in the actual slow market.

1) Research the curve - the concept of a property market cycle existing is not myth it’s a fact and is generally accepted to be based on a price-income relationship. Check the recent historical price data for properties in the area of the country you’re considering purchasing in and try to determine the overall feel in the market for prices currently.

Prices slowly decline in certain area of Spain however prices are still increasing in the country (10% this year , 15 % in 2005)
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Buying a property off-plan (off-plan property is a property that has not yet been fully constructed) can present certain risks.
First you cannot check what is offered to you until some substantial construction have been made, secondly the developer can vanish in the air even before the date of the construction. There are a few guarantees that you should always check out when you buy off-plan.

An off-plan reservation contract starts with the deposit of a sum of money then the buyer and developer can sign agreements, the contract presented to the buyer should always be negotiable, if the developer refuses to negotiate the buyer has the right to receive a full refund of his deposit.

The buyer has the following rights:

To know the identification information of the developer and the architect

Detailed description of the property and its surface.

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Investors buy off-plan to make strong capital growth, the idea is to buy a property at a low price in a new development (groups of houses intended to form a community) and sell a few years later when the development is completed, when bars, shops and people are installed as a community in the development.
The Spanish coast is on high demand by off-plan investors and an increasing numbers of properties are sold off-plan to people looking for a holiday residence or a property to live, usually, the developers will keep a certain numbers of properties solely for the investors, they will be the first properties to be sold usually these properties can be re-sold before the development is completed to a make a plus values.
Buying in Spain is good investment when you consider the 121 % growth between 1997 and 2004. The Spanish property market is excepted to continue to growth but a slower rate during 2006, observers of the markets expect a growth lower than 10% for 2006. Buying as an investor in 2006 should be for medium and long term. According to Mark Stuckin from Spanish Property Insight :

If you are buying as an owner-occupier with a long-term approach (even if you only plan to use the property for holidays) and you have the finances to buy without taking excessive risks, then go ahead and buy. Over the medium to long-term Spanish property should be a sound investment as well as a property to use and enjoy

Like most investment buying off-plan should be carefully planned, there is many pitfalls to avoid and things to follow with caution. According to some experts penthouses and corner units, units with private garden are best investments choice.
You might only see the property on plan as it has to be built but be carefully one of the recurrent complaint is that the plan do not match the property, sometimes there is structural defects in the finished property.
You will have to be prepared to face such conditions make sure that the developer has procedures to deal with these issues.

5 advices to buy off-plan, from PropertyInSpain.Net

1 - Look for lower than market prices offered by the developer
2 – Look for high demand types of properties (penthouse, those with privates garden, etc…)
3 – Go see the home when the main structures is in place, you will be able to have idea of what the finished development will be like.
4 – As the developer sells more properties, the value of your property if you bought it earlier should increase, at this point you can have idea of possible Return On Investment.
5 – When the development is completed your property will have more value, you can sell it or wait that a community is installed to sell at a higher price.

Off-plan properties in holiday resorts with golf and beach are highly demanded. Area with shops, restaurants and nightlife are also things to consider. If possible check for the developer reputation. Ask the developer how many % of the development is reserved to investors if the level properties sold to investors is to high you will end up with a ghost town without a community of happy retired baby-boomers.

Technorati Tags: off-plan, property, Spanish coast, Spain, Spanish property market