The high unemployment rate in Spain is taking its toll on domestic property buyers who feel trapped in the private rental sector but are unable to move to affordable homes because of restricted availability of mortgage finance. According to the National Statistics Institute in Spain, rental values for homes increased by 0.2% in January this year.
However, seen in context, the data soon reveals that year-on-year rental values actually fell slightly in Andalucía, Castilla-La Mancha and the Canary Islands, while much larger rental declines were recorded in Murcia (down 1.5%), Madrid (down 0.8%), and Valencia (down 0.5%) among several others.
Although at first glance this might appear to be bad news for investors in Marbella or other Costa del Sol property markets, the country’s continued appeal to tourists is making short-term holiday letting still very appealing, particularly when considering the affordability of Marbella property versus holiday rental yields per week.
Malaga’s long-term rental market has been rather hit by an oversupply of stock. Here long-term rentals for a 5-bed, 3-bath villa with its own garden and sea views has dropped to just EUR 500 per month - the same rental value as charged for a 2-bed apartment in Mijas Costas.
In Marbella on the other hand, such properties command much higher rental values and for holiday accommodation a 2-bed-, 2-bath apartment in a small gated complex might cost as much as EUR 2,000 per week, leaving investors a tidy sum after tax and running costs have been accounted for.
Even in winter a 1-bed, 1-bath apartment in Marbella’s neighbouring resort Fuengirola will attract a holiday rental of around EUR 550 per week, making an investment of EUR 100,000 or less for a resale a pretty sound bet.
Marbella’s multi-faceted attractions, from amazing beaches and water sports to hiking and climbing in the Sierra Blanca mountains, have long made the resort a favourite for property hunters. The super-wealthy have their playground at Puerto Banus, where nonetheless luxury 2- and 3-bed apartments with 2 or 4 bathrooms and exquisite interior finishes can be purchased for less than EUR 459,000.
The resort offers property styles for every taste and varied budgets, from affordable and cheerful in Elviria in the east of Marbella, where new apartments start at around EUR 150,000, to golf resort property of a most exclusive kind, where starting prices for a 2-bed apartment with all the trimmings hover around the EUR 560,000 mark and where 3-bed apartments with 3 bathrooms cost a cool EUR 900,000.
This particular golfer’s haven consists of just 54 large apartments with breath-taking views and access to all services and amenities the 27-hole golf course on their doorstep has to offer. There’s a club house on site with a bar and restaurant, a 5-star hotel and Spa, where property owners enjoy preferential prices. The golf development is located within a 10 minute drive to central Marbella, is within a 40 minute drive of the airport and just a 5 minute drive away from the delights of Puerto Banus Marina.
Aided by experienced local estate agents and armed with an expert foreign exchange broker a house hunter can save a lot of time and money at the present time, especially when buying in cash. Credit availability is still low in Spain as the country’s lenders are trying to get their own finances into order following the housing market crash. For buyers from strong economies such as Scandinavia’s the housing market in Spain has become far more affordable thanks to a weak Euro and discounted property prices prevailing across the country.
Wherever possible, buyers have taken out finance in their own country rather than be disappointed by a Spanish lender. It pays to make extensive enquiries into the finance issue before booking a Fly-to-buy ticket via a local estate agency arranging property viewings in Marbella.
With a weak Euro buyers get far more value for money when it comes to buying an investment or holiday home at the Costa del Sol. And with discounted properties at 64% below their original listings, it is certainly worth doing a little research!