The property market in Spain remains in dire straits
While the USA property market continues its long road to recovery, the property market in Spain remains in dire straits.
A fragile economy, a glut of housing, unreliable statistics and corruption are just a few issues that have had a negative impact on the Spanish property sector. Property prices across the country have plummeted by up to 60% in the past four years, and with the banks sitting on an estimated one million foreclosed homes, things could be about to get whole lot worse.
In stark contrast to wider market concerns, there are tentative signs that property market conditions are improving on the Costa del Sol – a popular holidaying destination, as more homebuyers purchase heavily discounted homes in the region.
The volume of unsold new build properties fell by 40% in 2011 which is significant because an oversupply of homes has been the main cause for the decline in property prices in the Costa de Sol.
According to the Association of Builders and Developers of Malaga (ACP), home to the Costa del Sol, property developers sold around 10,000 new homes last year.
So is there an opportunity for property investors on the Costa del Sol? Well, the answer in short is ‘yes’. The region continues to attract millions of holidaymakers each year, providing holiday homeowners with an opportunity to let out their properties, with a good annual rental return achievable in some parts of the area.
Furthermore, with housing construction having come to a virtual halt, the existing supply of properties will eventually be digested, which could present an opportunity for future capital growth.
Mark Stucklin of Spanish Property Insight said: “Given the long lead times in the building industry, there could be an acute shortage of new housing a couple of years from now."
He added: “Shortages will be made worse if demand recovers to its normal level of around 22,000 new homes a year, based on the size of the population. However, unemployment or fear of unemployment is keeping many potential buyers out of the market.”
For full details on the real estate offered by Torcana Ltd please visit www.torcana.com