The difficult financial situation prevailing in the Spanish banking sector has forced many financial institutions in the country to offload huge numbers of repossessed properties at incredibly low prices. Buying a Marbella home now hasn’t been this cheap for many years – especially with low interest rates and a record high of Sterling against the Euro.
Marbella has the reputation of being a glamorous gem of a resort at the Costa del Sol – with property prices to match. While it is true that Marbella real estate has kept prices marginally better than other parts of the Spanish Costas, there are plenty of bargains around that have been discounted by up to 50% and are offered with 95% or even 100% mortgages. In
In Marbella East, the district of Elviria for example, potential buyers can snap up bargain priced apartments with such generous finance packages for just under EUR 180,000. Close to Santa Maria Golf Club and the sea, these apartments have beautifully maintained grounds and communal swimming pools and are a mere 5 minutes’ walk from shops and other amenities.
Borrowers can pay off their mortgages early without incurring any penalty fees and the mortgages are usually transferrable, should buyers decide to sell in the future. Most properties are offered with between 30% and 50% reductions in price from their original listing. It is important to note the location of the property – what services and amenities are already in place? How close is the property to the airport, high-speed train station, how well is the area served by car hire providers and coach companies?
These questions are not just important for potential buyers who want to move to Spain or let their properties for part of the year, while they are out of the country. First-time investors often get lured into buying the cheapest properties, when they should be thinking about the added value potential tenants will look for, when they come to choose a rental property. Holidaymakers in particular are far more sophisticated in their tastes than they once were. They want all the amenities and services within walking distances and, more important, up and running.
While brand-new, key-ready Marbella property is available with 95% to 100% mortgages, resales are not offered with such generous finance. Typically, the finance available for resale homes is based on a loan-to-value of between 50% and 70%. The difference in purchase price must be found by the buyer.
Buying a property now in Marbella, Puerto Banus or Elivira makes sense, as prices are bound to go up, albeit slowly owing to the recession in the Eurozone. The huge increase in tourism numbers visiting Spain is already having an impact on the property market.
Experienced estate agents should offer a viewing trip that includes pick-up service at the airport, hotel accommodation and, ideally, a pre-approval for mortgage finance. Bargains get snapped up quickly in the prime developments, where often waiting lists for viewings exist. Scandinavian buyers in particular are very active at present, so are buyers from other European economies with strong growth. Where it has been difficult to obtain finance in some parts of Spain, investors have made cash purchases for the lower priced real estate on offer at the Costa Blanca or in Murcia for example.
At present many Marbella resale properties are sold as amazing bargains. A south west facing, 5-bed, 3-bath villa set in a 1017 sqm. plot and offered with 229 sqm. floor space can cost as little as EUR 465,000. The property benefits from a private swimming pool and is just a short walking distance from Cabopino Marina and the El Casco Tennis club as well as being a short distance from the beach.
Adopting a wait-and-see attitude is perhaps not entirely risk-free. Asking prices may go down a little further – but they are more likely to have already levelled out. With Spanish banks now receiving a cash injection from the EU bail-out fund, further price drops in prime areas like Marbella are unlikely, making now the perfect time to buy real estate at the Costa del Sol’s best resorts.