The recent news from Spain has tended to be gloomy as property values have continued to fall rapidly, trapping many Britons and Europeans in homes they could not sell. Finally there is better news coming out of Spain as it seems the debt crisis has forced the government to reform its legal and economic structures which is something that has been long overdue.
Spanish Prime Minister Mariano Rajoy is working hard and tirelessly in turning round the economy since the spectre of a Euro zone bailout was raised late last year. Rajoy was determined his country would not face the same fate as Ireland and Greece and has implemented many new reforms over the last few months which regulate the property and lending markets, and the labor market. In doing so he has managed to reduce the wages in the public sector, raise the retirement age and reduce the red tape surrounding many governmental procedures.
The property reforms are designed to reassure buyers that their purchase will be legal and secure. Councils will have to submit a document that makes clear the legal status of the property, eliminating the risk of the property being deemed illegal later on. He also has ambitious plans to reduce the country's deficit to 6% of GDP by the end of 2011. It was previously 11% at the end of 2009, and this impressive decrease shows that the country can manage its finances better making it more attractive to investors. These factors combined with low property prices should be enough to tempt overseas buyers back into the market as the chances of getting a great deal are fantastic provided they are buying for the longer term.
Spanish Homes Just For You feel confidence is gradually returning to the Spanish property market as holiday home buyers take advantage of the market. The feeling is that it's finally bottomed out and developers are beginning to start new projects. In some parts of Spain prices have dropped by 50% and are back to the level they were 20 years ago, and the many believe they cannot drop any further. Buyers are finding great bargains as some are sold fully furnished and ready to let, and as they are in well-established areas they are easier to manage. There is also likely to be greater demand for holiday rentals this year due to the troubles in Egypt and other countries; low cost airline Jet2.com has just announced it is replacing its suspended Egypt programme with extra flights to Spain and Portugal.
The opening of the new international airport at Murcia City is certainly expected to improve the property market in Costa Blanca and two property developers have already announced new plans for residential projects. Some local estate agents are wondering if they are being a bit too optimistic as they are seeing little demand for of plan property. Much of the interest in this area is being generated by the new Paramount theme park but building work has yet to begin on this attraction.
In order for confidence to fully return to the property market and for the Spanish economy to improve, unemployment levels need to fall and the Organisation for Economic Co-operation and Development has said reducing unemployment is the key to recovery. Unemployment levels vary widely across Spain but are being exacerbated by the property market, although the Paramount theme park is expected to generate much needed jobs.
If you’re looking for property in Spain, now is the time to begin looking for that vacation, retirement, or permanent dwelling, as there are an abundance of properties on the market. It is estimated that there are approximately 1 million properties for sale in the Spanish market and prices are expected to continue falling this year.
Though this is not good news for sellers or developers, it most certainly is good news for buyers. Ideal locations such as the Costa Blanca and Costa Calida regions offer plenty of beautiful homes at affordable prices. According to Spain’s National Institute of Statistics home prices are decreasing with residential properties falling 2.2 percent in 2010’s third quarter when compared to figures from 2009. Additionally, the prices of new properties and re-sales are also decreasing. Figures show a 2.6 and 1.8 percent decrease year on year.
It seems that sellers have become more realistic in pricing their homes with the economic crisis that the world has been fighting. Many simply want their homes to sell quickly and are willing to negotiate the price. One of the most significant drops in prices was on the Costa Blanca, with a 6.7 percent drop. The Canary Islands were down 2.9 percent, Andalucia 2.2 percent, and the Balearic's faced a 2 percent drop. Despite the drops, a bright spot for sellers was found in Madrid where prices rose 0.9 percent in the third quarter of 2010.
Experts predict that home prices in Spain may continue to drop for another two years, which has many local and overseas investors keeping an eye on the country and many have gone ahead and made some key investments in the market already
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Timothy Patrick Baldwin - Managing Director