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A Good Time to Buy in Spain?A couple of people have asked me if it is a good time to buy in Spain. Several articles have appeared in property magazines showing the amazing deals available in Spain. So, is now the time to buy when everyone else is panicking?Undoubtedly you can pick up some good deals in Spain at the moment. However, I do follow a series of rules when dealing in property. Let's have a look at them and see how they apply to the current situation. The first rule of investment is "Dont Lose Money!" That means you need to buy low. There is also an implied rule here: "Dont buy when the market is going down." If the market is going down then you can be sure of better deals in the future. The market is still going down, and will probably do so for another year or so. That means there is no hurry to buy anything. My advice would be to wait until next summer at the very least. If you do want to have a look at what is available you would be advised to look in two places. But first, be warned, now is not the time to go to an estate agent. They have the worst deals. The local newspapers will have ads for people desperate to sell. Some of the papers have literally dozens of pages filled with ads. The last time I answered an ad I found a £60,000 house advertised for £30,000, and they were prepared to take an offer on that. Similar reductions are available now. Many people are desperate to sell. A friend of mine has three villas on the Costa Blanca. He cant rent them out, so they are costing him money. He has already offered them for sale at a 25% discount and has had no takers. He's desperate now. He will be even more desperate next summer if the rental situation does not improve, which is likely. The locals are in trouble too. Unemployment is in double figures, and things are set to get worse. I have only just read an article in a Spanish paper about a guy in Tarragona who has been arrested while trying to sell his two daughters. He cant afford to feed them. The second place to look is at bank foreclosures. The bank takes in a property when the owner can no longer service the mortgage. The bank doesn't want the property and so sells it on for whatever it can get. These properties therefore go for fire-sale prices. The best deals are non-mortgage deals and you need to move fast. That means you must have the total price in cash and be able to sort out the legals within days, or weeks at worst. There are also deals where you only pay the 10% and then get a mortgage. But for both these kinds of deal you need negotiators. I can put you in touch with people who do this if you want me to. However, I would be tempted to wait for another year before moving in on this market. There is still a big hole in the bottom of the bag and things are still falling out. Back to the Top |
© The Property Organisation 2008
