Now is the moment to snap up a bargain in the Spanish property market, and buying off-plan could bag a buyer the best facilities for a budget price

Amid the nervous twitching in the Spanish property market, one very relevant statistic suggests that the end is not nigh and hundreds of thousands of foreigners are not about to lose shirts, trousers and all other items of clothing. A survey in August revealed that more Britons than ever are fleeing their home country – and the warmth and near-guaranteed sunshine of southern and eastern Spain are high on their agendas when it comes to relocating.

Almost 60,000 of us made the move to Spain in 2005 – the last year for which figures are available – and that number has certainly increased in the ensuing two years. That’s just Britain. There are ‘new Spaniards’ from Ireland, the rest of northern Europe, elsewhere in the Hispanic world and North Africa.

The vast majority of people moving to Spain are still buying in the off-plan market – but that’s just part of the story, because those relocating don’t even make up the bulk of off-plan sales. The majority of buyers are either people looking for a second home or holiday base, or else what the market calls ‘amateur investors’, who typically buy one or two properties to let, looking for medium to long-term capital growth.

So, although Spanish figures suggest that 800,000 new properties were built last year, the end is not nigh for the developers, estate agents and – more importantly – those of us who have invested in Spain or are thinking of doing so. In fact, if you consider the growing Spanish tendency (finally) for young people to start fleeing the nest before they hit their mid-thirties, that figure of 800,000 might not even fill the gap!

In the Mar Menor coastal area of Murcia giant developers such as Polaris World have keenly priced townhouses from around €200,000, penthouses from €230,000 and villas from around €230,000 to almost €2 million. It’s all about choice, location and facilities. The toughest thing is deciding what suits you best and in which area.
“It’s true, the market is serving fewer buyers,” says Peter Cooper of Headlands International, who sell across established and emerging locations. “But we don't believe the Spanish market is in total decline, which you could be forgiven for thinking after reading some of the British papers.

“The danger is these things can become a self-fulfilling prophecy. At the moment you have a situation in Spain where there was a blip on the stock market that soon corrected itself. Also, re-sales bought three or four years ago are having to compete with new build from developers who have barely increased prices in that time.”
All of which plays into the hands of those heading Spainwards. One agent selling on Spain’s east coast who preferred to remain unnamed (for obvious reasons) said he was selling golf villas with pools for 10 per cent less than a year ago. “Everyone around us is doing the same thing. It just means we all have to cut our profit margin, which of course is good news for buyers – though the upside is that the number of buyers isn’t dropping.”

Lee Brace, of Brace Oakley, whose market is concentrated on golf resorts south of Valencia, says sales volume is being sustained by the fact that this is still a good market for investors.

There are some bargain contract sales to be taken advantage of, and the rental market for golf resorts in the region is proven, with La Manga Club being an excellent example.

“If you were to look in the UK at what you could purchase for £120,000, and then compare what you could buy on one of the golf resorts for the same money, not only would it be a far superior property, the rental income would be better in Spain, sometimes generating more for a two week holiday let than a months’ rental in the UK.”
He is quick to stress that every buyer has different priorities: “If the purchaser was looking for a holiday home they may want sea views and to be near the beach. If they were relocating they would have to think about the practicality of every day living – schools, shopping, work potential, that sort of thing.

“The investor purchaser would have a different view, as they would be looking at achieving maximum opportunity for capital growth and rental potential. Golf courses seem to be the most popular for this as they are normally fantastic quality, gated developments with plenty of amenities, sometimes with spa hotels. The major contributing factor is that there is a good all-year-round rental market with golfers and families wanting to stay on quality resorts.”
Mercers have experience of several very different markets in Spain, and, says director Chris Mercer, while things are quieter on the Costa Calida, his offices on the Costa de la Luz and inland are bucking the trend.

“We are selling off-plan developments in the town of Lebrija, half way between Seville and Jerez, and that has almost sold out. There’s a mix of second-home owners, foreigners coming to live here and also young Spanish people – the town has excellent commuter links with both cities,” he says. “That mix of clients has, to some extent, enabled the development to continue selling during a challenging time, but I think this is what developers and agents have to do to compete – look for a different location and offer a slightly different product.

To that end, Mercers are selling new properties on the championship golf course at Montecastillo, just outside Jerez, and city centre developments based around historic buildings with original facades and features. “People like the old city but they also expect modern standards of air conditioning, bathrooms and kitchens, that sort of thing. Jerez is a perfect base – it’s a beautiful city, has good transport connections and is close to the beach. The interest in our projects underlines the need for developers to be creative.”

That seems to be something of a mantra at the moment: give the buyer choice, value, flexibility. “Buyers are more knowledgeable now,” says Peter Cooper of Headlands. “They’ve done their homework.”

It’s not much of a price to pay: a few hours surfing the net, a few more checking a developer’s background. And – if it all stacks up – the chance of a bargain. All of which suggests that far from turning our backs, this may be the best opportunity in years to head down the Spanish off-plan route.


Headlands International www.headlands.co.uk
Brace Oakley www.braceoakley.co.uk
Mercers www.spanishproperty.co.uk
www.polarisworld.com
www.oppspain.com
www.titan-properties.com
www.duchyestates.co.uk





Buying off-plan

Just because a property is new doesn’t mean you shouldn’t apply the same due diligence in deciding to buy. And as with any house purchase, there are always a few small ‘unknowns’: how long before I stop living on a building site…will that next stage of building ruin my view…will the value of my property go up…
But there are also big advantages to buying off-plan. The most immediate and obvious is the staged payment. Typically, there’s an initial outlay of 10 per cent, then another 10-20 per cent after a few months and often nothing more until completion.

Buyers who get in early on a new development have the benefit of choice of property and lower prices than later stages on the same site. Of course, they may be waiting longer for local amenities such as shops to appear, but that’s one for the individual to weigh up.

Developers almost always offer a ‘finishing’ pack priced at different levels, which means the buyer can make his property more personal – even if it’s intended as an investment project.

The choice can be bewildering, even after deciding which area of Spain suits best. In an area such as Murcia, the Costa Blanca or Costa del Sol there are hundreds of developments to choose from so it’s essential to take time finding the right location. That can often depend on whether the property is intended as a rental/holiday home or a permanent residence. On the beach may be great for the former, not so hot for the latter if you’re 10 minutes out of town.