Added 31/08/07

Is Spain still the tops?

 
FOPDAC, the Federation of Overseas Property Developers, Agents and Consultants, which recently merged with the NAEA,( National Association of Estate Agents) to form NAEA International incorporating FOPDAC, has compiled a list of opinions and stats from its members to help buyers decide for themselves if Spain is still the number one place in which to invest
“ 26% of all enquiries relating to Brits buying abroad are for Spain” says Mark Bodega at HiFX. “They are looking for value rather than creating it artificially.

Over supply in Spain at present can lead to real bargains and property markets always fluctuate, so the increase in buyers is coming from astute investors seeing the potential of purchasing whilst the market is slightly lower.”

He concluded that a stable Government and excellent infrastructure means the country has much to offer and buyers now should see their investments grow in the coming years.”

David Scott of David Scott International says: “I live and work in Nerja and have done so for over 20 years and what is interesting is that the news that Spanish property prices have dropped has shown that now is the time to buy.
“ We also operate a ‘four owner’ scheme giving buyers an opportunity to own a quarter share in a fully furnished property with pool, from as little as £21,000.”

Another FOPDAC member which operates from Spain is Villas Valencia which reports that although buyers are not going to reap 25% profit per year, as some have in the past, there is still a very healthy market place.

Also, despite comments that there is over build, in certain places such as Valencia city, there is actually a shortage of housing. Even with a current slight increase in the mortgage rate, the company can remember UK buyers flocking to Spain even with a mortgage rate of 16% and maintains over the years this has still proved to be a worthwhile investment.

“Although a slow down in some areas of the Spanish has been widely reported in the media, investors should remember that Spain is a big country and there are many distinct markets with varying prospects” says Craig Stocks of Eden Villas.

“One still relatively undeveloped area is the Costa Tropical (the coast of the Granada province), where excellent capital growth and rental returns can be obtained, with new, 2 bed, beach front property still available from around £110,000, remarkable for a Spanish Mediterranean coast.”

And what about the higher end of the market place in Spain? According to Serge Cowan of Unique Living they have had a very busy year in the Costa del Sol. “What we have found is a booming market in the top range, re-sale market, where licensing problems that have beset new build, do not exist. There is little choice of good quality off plan products in the area at the moment, but there is a tremendous choice of quality homes and 90% of our sales are in fact re-sales.”

Bodega concluded: “Research at HiFX has shown a doubling in the number of people bringing money back from foreign investment. Whilst figures show investors that bought over 20 years ago are either downsizing or selling as they grow older, there is now a whole new generation of buyers and the overseas property is booming with property prices in countries, such as Spain, seeing good, steady growth”.

• Spanish bank Banesto, part of the Santander group, has withdrawn all of its own non-resident mortgage lending. The only product it will offer to foreign applicants is a self-certification loan which they are administering on behalf of GMAC.

The news comes just weeks after Caja Mediterraneo (CAM Bank), one of the largest providers of non-resident mortgages in Spain, instructed some of its branches to accept no further non-resident mortgage applications for the time being following a spate of false mortgage applications.

Heather Chambers, Director of International Mortgage Solutions Ltd (IMS), a Spanish non-resident mortgage broker explained: “This is clearly a case of once-bitten-twice-shy for Banesto.

“It is sad that due to certain unscrupulous brokers supplying false paperwork to the banks in order to push through an application so they can earn their commission, the ethical buying public has to suffer. However, we must applaud this action as it should serve to prevent and dissuade both clients and the brokers involved repeating such practices in the future
The Spanish banks are tightening up and at IMS we have noticed how pedantic they have become about documentation provided, and quite rightly so. Lenders will also now check liabilities and credit files back in the applicant’s country of residence, something that didn’t take place previously.

“Scottish Widows, part of the Lloyds TSB group, has taken the extra measure of registering a non-resident loan granted in Spain back in the UK on the client’s credit file. The climate is certainly changing and those practitioners operating on the wrong side of the law will have to clean up or close down.”