Spanish Property Price Drop
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Monday, 27 Oct 2008
Although the financial headlines may be gloomy at the moment, for people in the UK who have the money to buy a property in Spain, the news is good...
As struggling builders look to offload their completed properties they are having to slash prices on new homes to well below the market rate, often with discounts of as much as 35 per cent.
According to Kieran Byrne, of Estate Agent HomeEspaña, British buyers are finding it hard to resist such bargains.
"We've never seen anything like this," he explained. "Since last year, property prices have fallen on the Costa Blanca by around three per cent, or by even less if you look at the official figures.
"But even some of the best quality builders are cutting their prices by 10 times that, up to 35 per cent in some cases.
"The market would have to keep falling at its current rate for 10 years for those prices to make sense. The buyers just can't believe their luck."
The discounts are a result of serious cash flow problems for many Spanish builders. Due to the demand during the housing boom thousands of new homes were built by developers, unfortunately at a faster rate than they could sell them.
Overall, Spanish construction output fell by 15.9 per cent in the first six months of the year, according to figures from Eurostat, the EU statistics office, and several large construction firms have gone into administration.
Those who have survived need to sell their properties quickly, before the economic situation gets any worse, and so they have cut their prices back far more than the market would suggest.
But Mr Bryne warned, "As soon as they've built up their cash reserves, they'll put their prices back up to the market level. They can't sustain these prices for long. I'd advise anyone in a position to buy to look at what's on offer as soon as they can."
Source: www.homeespana.co.uk |
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