Spain’s Ministry of Foreign Affairs is to report via its embassies on the latest planning reforms and the new Coastal Act with a view to encourage property investment from abroad and to lay fears to rest over “land grab” and similar scandals that have dogged the country for the past few years.
With thousands of key-ready properties for sale both inland and in coastal regions, the Foreign Minister Jose Manuel Garcia-Margallo is keen to use the brand “Spain” to promote the empty homes. Embassies can be very useful to publicise the latest legal reforms governing planning and building regulations.
The new Costal Act for example aims to extend the concessions of the properties situated along the Costa Blanca, Costa del Sol and other coastal regions to 75 years, which should benefit a large number of foreign homeowners.
Once the government has fully approved the Coastal Act, the various autonomous regions will follow suit and will change their zoning laws. The Foreign Minister can then pass this information on to the countries where traditionally property investors come from, such as the United Kingdom, Germany and France.
Spain has faced much criticism over its legal framework governing property purchases. The vagueness and often contradictory advice given by “legal experts” left many potential buyers so bewildered, they decided not to buy in Spain, taking their much needed investment money to France instead.
Meanwhile, the Promoters and Builders Association of Spain has put forward a proposal that will actively promote the sale of some 250,000 properties in the most popular tourist areas. These housing units represent some 37 per cent of the overall glut of homes currently sitting empty. The average cost per home would be around EUR 200,000, bringing in a welcome EUR 50 million into Spain.
The project has so far met with governmental approval and currently discussions are under way that should see a framework put in place for these homes to be sold with guarantees.
In total, there are still some 675,000 most new built homes waiting to find a buyer. While housing units at the popular Costa del Sol and Costa Blanca are selling more quickly to newly emerging markets like Russia, China and to buyers from Scandinavia, investors from the United Kingdom are still hedging their bets, hoping prices will go down further.
So what are currently the best buys? In Torrevieja in Alicante a 3-bed, 1-bath villa will see for as little as EUR 40,000, while a 2-bed, 2-bath town house in the same location may be as little as EUR 31,000. Even in the suburbs of Barcelona, in Berga, a 4-bed, 1-bath apartment with floor space of 74 square meters may cost as little as EUR 21,200, if the property is bank-owned, meaning, when it’s repossessed. Residents who qualify for mortgage approval can get such properties with 100% mortgages, while non-residents are offered 80% mortgage finance.
A 2-bed, 1-bath, fully restored country house with swimming pool and own gardens located in Granada, just a 1.5 hour drive from the Costa del Sol, may cost around EUR 169,000. The Canaries and Balearics have held prices marginally better (down 14% compared to July 2011) and it is rare to find property priced below EUR 250,000.
Marbella has also kept its glamour along with its prices and it is more difficult to find such bargains, however, it is possible to buy a 5-bed, 4-bath country villa in Mijas, Malaga at the Costa del Sol for just EUR 695,000. The property has 300 square meters of floor space and stands in a plot of 3,700 square meters. Naturally, there is a swimming pool and a carport for three cars.
On 15th August, Tinsa published their latest findings with regard to the country’s house prices and recorded an average decline of 31% across Spain for house prices since December 2007, when the housing market in Spain last peaked. Capitals and major cities have dropped prices by 11.8% since July 2011.