If youââ¬â¢re looking for a second
home in the eurozone then you may be considering buying a property in
Spain. The euro crisis has created
excellent buying conditions for Brits, mainly thanks to plummeting property
prices and the fact that the pound now buys 25 per cent more euros than it did
three years ago.
However, if youââ¬â¢re thinking of
buying property in Spain you may have to be patient before the value recovers,
as we see next.
Property in Spain is cheap ââ¬â but may remain so for years
Property prices in Spain have
fallen significantly in recent years.
And, the strength of the pound against the euro is resulting in British
buyers getting more for their cash.
Charles Weston Baker, head of Savills International, says:
ââ¬ÅSpain is the main bargain area, the Costa del Sol in particular. Spain has seen dramatic price falls,
not least because banks need to shift distressed stock. Consequently, they are offering
high loan-to-value [LTV] mortgages on properties that are discounted by some 70
per cent compared to their 2008 peak.ââ¬Â
However, while property in Spain
may be cheap, it is likely to remain that way for some time to come. The Daily
Telegraph reports that ââ¬Ëeye-stretching apparent bargains need to be
scrutinised with care before buying in the crisis-torn eurozone.ââ¬â¢
The international credit rating
agency Fitch estimates there are more than a million unsold homes in
Spain. The massive house building
boom of the 2000s means that supply in the country is likely to exceed demand
for many years, delaying any recovery in prices.
In addition, it is possible that
prices of homes in Spain may continue to fall if the euro crisis worsens. James Price, a partner at Knight Frank
International, said: ââ¬ÅThere are naturally locations where property can be
bought at a significant discount to where prices were three or four years ago.
ââ¬ÅHowever, one may question how
much of a bargain these are. Such markets are likely to take some time to
recover.ââ¬Â
By Homesgofast Author Nick
Marr
