On 13th September Tinsa confirmed the latest report on Spanish house prices was to be made available - showing that from peak times in 2007 to now the average Spanish home has lost 40% of its value.
In August this year the General IMIE index showed a decline of 11.6% in a year-on-year comparison with 2011, which was marginally more than the fall recorded in July this year. According to the Tinsa report, the cumulative decline in home values since the Spanish housing market’s boom days in December 2007 now stands at 32.4%.
Generally speaking, the Mediterranean coast saw the largest declines of all Spanish areas (down 39.5%), but this doesn’t mean that areas like the Costa del Sol are universally affected. Prime locations like Marbella, Fuengirola and Estepona may have seen house prices falling, but they are nowhere near as badly hit as other stretches of the Mediterranean coast, such as Costa Blanca for example.
With economists warning that the Eurozone will still be undergoing severe recession for at least two more years, Spain’s housing market remains volatile, but what is one person’s loss is another person’s gain.
The Costa del Sol housing market is undoubtedly a buyer’s market at the moment. The Malaga and Granada provinces offer some amazing bargains to buyers with ready cash or those, who qualify for a mortgage. Rural 4-bed properties in Granada can cost as little as EUR 39,500 and town houses with 4 bedrooms and 1 bathroom are offered for just EUR 49,950.
The resales market in particular has been hard hit, as bank-owned, new property is offloaded by cash-strapped banks happy to offer generous finance packages of 100% mortgages together with heavily discounted properties. An older-style, resale penthouse with 3 bedrooms and 1 bathroom located in Estepona in the Malaga province at the Costa del Sol can cost as little EUR 78,660.
It is not all doom and gloom in the Spanish economy though. According to a recent report by Randstad, Spanish workers are more confident about keeping their jobs than they were a year ago. Just three out of ten workers fear they will lose their job, the lowest ratio of this year. Eventually, this increased confidence should spark a modest revival of the domestic housing market with more Spaniards either buying or renting new homes.
Holiday bookings for overnight stays in hotels were down by 2.1% in August of this year compared to the same month last year - despite a record number of visitors being welcomed in Spain. Domestic demand for hotel accommodation declined by 10%, which resulted in lower figures being recorded for overnight guests. Another explanation could be that more homeowners are renting out their homes as self-catering apartments, fincas and villas.
Marbella, the jewel in the crown of Costa del Sol real estate, has also seen declines in home prices, but the high quality construction and luxury interior fittings and design on Marbella properties has ensured prices held better than in other locations at the Mediterranean.
The glamorous resort boasts very distinct differences in its districts. At Puerto Banus apartments dominate - here the world of sailing and motorboat sport likes to show its gleaming white yachts in the famous Marina. In the east of Marbella there are districts like Elviria, where buyers can find a pleasant blend of luxury apartments and penthouses, town houses and luxury villas set in extensive grounds. In Estepona, Gualdamina, Benahavis, the Golden Mile, Nueva Andaluxia and Sierra Blanca anything goes, from studios to top-end, luxury villas with ten bedrooms and more.
Guadalmina has wonderful golf villas on offer, while beachfront property dominates the Golden Mile. Even in “millionaire’s row” in some of Marbella’s most exclusive neighbourhoods prices have fallen - an ideal moment to make a purchase. A 6-bed, 6-bath villa in Los Monteros was once listed for EUR 13,500,000, but now the more modest price tag of EUR 9,000,000 might lure discerning buyers through the door.
Even more exclusive property can be found in La Zagaleta, where a 9-bed, 9-bath villa set in a 4,484 sqm plot and boasting indoor as well as outdoor pools will cost “just” EUR 15,000,000.