Lanzarote is becoming a buyers market. As recently released figures from Spain’s National Institute of Statistics reveals that mortgage approvals in the region have fallen in the last year. Whilst leading local agents are also reporting that a growing quantity of price reduced property is now coming on to the market.
Lanzarote Property has been a firm favourite with overseas investors for well over a decade. Thanks to a buoyant tourist industry and a year round clement climate that provides owners of holiday properties with a reliable rental income for a full twelve months.
And despite negative factors such as a weakening pound and waning disposable incomes in the UK the island has proved more popular than ever with tourists to date this year – with overseas visitor numbers up by 8.7%. Whilst property prices on the island have traditionally been some way below the average in relation to other Spanish sunspots.
Now, as tourist numbers continue to rise, prices look set to start heading in the opposite direction. As mortgage approvals in the province of Las Palmas, of which Lanzarote is part, fell by nearly 36% in the first quarter of 2008. Creating fertile conditions for overseas investors in search of a genuine bargain.
Just as elsewhere around the world local banks have started to tighten their lending criteria – applying preferential mortgage rates to buyers who are able to come up with deposits of 20% or more. And are also imposing more realistic valuations on vendors – so effectively helping to force prices down.
As a result, all of the islands leading estate agents are now offering a growing amount of discounted property – with some serious price reductions now in evidence.
The Property Warehouse, for example, are amongst the biggest operators on the island and over the last month they have introduced a new section on their website specifically for price reduced properties. Which has quickly grown to encompass just under 100 listings – with discounts ranging from €6,000 on a one bedroom apartment through to a whopping €245,000 off a luxury villa in the islands main resort of Puerto del Carmen. A picture that is being repeated in estate agents windows across the island.
According to Nick Ball, of the leading island property portal, Lanzarote Guidebook; “There are still plenty of buyers out there. As we have received over 1500 enquiries this year to date. But they are exercising greater caution and are starting to test vendors with offers that are often way below the original asking price.”
Despite the credit crunch and ongoing mortgage misery in the UK demand for property in Lanzarote amongst overseas investors remains buoyant. Driven by an unexpected upsurge in British visitor numbers during the first quarter of 2008 and a revival of fortunes for the islands key resort of Puerto del Carmen.
Back in the 1970´s Puerto del Carmen really was the archetypal unspoilt fishing village beloved of holiday brochure blurbs. Known locally as La Tiñosa this pretty pueblo boasted over 6km of beautiful golden sands – and a small local population that survived almost solely on fishing and agriculture.
Today, La Tiñosa has been absorbed by the mega resort of Puerto del Carmen. And the same beautiful beaches ensure that the resort is still the most popular on the island – despite the creation of Costa Teguise to the north and Playa Blanca to the south.
During the first three months of 2008 Lanzarote enjoyed an upsurge in British visitor numbers of 8.7% on the previous year. A significant increase given the fact that the UK is the islands largest tourist market – providing 850,000 visitors in 2007 alone. And providing welcome news for the many British and Irish investors with holiday rental property on the island.
Where tourism leads, property investment tends to follow. And according to a detailed analysis of just over 1000 property for sale enquiries received by Lanzarote´s busiest property portal, Lanzarote Guidebook, during the first three months of 2008, the bulk of demand is now focusing on Puerto del Carmen.
This can partly be explained by the fact that apartment complexes dominate this destination. As overseas investors become more cautious this has proved to be to the benefit of Puerto del Carmen. With the vast majority eyeing up cheap entry level studios and apartments rather than the more expensive villas available elsewhere. 83% of all enquiries received by Lanzarote Guidebook during the first three months of 2008 were for properties priced at €300,000 or below.
The resort is also on the cusp of a serious make over – with plans in place to take Puerto del Carmen upmarket and ensure it s competitiveness as a holiday destination for decades to come.
The entire sea front promenade is about to be pedestrianised, a new 18 hole golf course is opening this year and plans are in place to replace the existing, old fashioned neon lit shop fronts with a more uniform and aesthetically pleasing look.
As a result, entry level apartments in the resort are starting to look like excellent value investments – as it’s still possible to pick up a studio here – ideal for holiday rentals - for as little as €78,000.
