Property in Spain Price crash

As usual the Press in Britain have indulged in some Spain bashing, nothing nicer than a bit of bad news from abroad to make you feel a bit more smug with life in old blighty is there? Bit like the illicit glow you get when the neighbours shed catches fire.

Headlines like "Spanish Villas Crash!" sell newspapers. I have lived in this wonderful country for over eighteen years and no one I know is having any panic attacks. Due to the the vast influx of Brits in Spain over the last 3 decades we have had two distinct property markets, foreign and domestic, unlike Irelad, the UK, France or Italy where you could reasonably expect to sell your property to either a Local or an imigrant.

Both property markets have happily co-existed together, very few foreigners buying into Spanish Areas and very few Spanish buying into tourist areas. Only three times in the past thirty five years has there been any upset when due to either oil crises or over development, property values fell for a extremely short time.

After the Millenium there were several changes in the real estate sector on the Costa's, introduction of the euro, currency and property buying from the new states of Russia and eastern Europe, low interest rates, banks flush with money to lend and investors releasing equity out of their UK properties to buy their foreign properties all combined to fuel the biggest growth in property building ever been seen on the Costa del Sol and Costa Blanca. This was further driven by the collapse of traditional investment vehicles such as insurance policies, pension funds and stock markets with investors looking for a safe haven for their money.

The Spanish domestic market was largely unaffected by all this still rising by 5 - 10% per year whilst the foreign investment market went sky high with rises of 25 - 35% every year. Recently we've had over five years of massive increases in this sector with investors and developers making fantastic returns.

Some of the newspapers led on the crash of real estate developers funds on the Spanish Stock market with some major developers losing aprrox 35% of their capital, what they failed to point out is that for the last decade they have been making up to 65% per year.

What is happening is a readjustment in the Spanish real estate market. The investment markets and the local domestic market have to get a little closer together that's all. Those investors and property owners who are in for the medium term will see a rapid return to sensible growth, remember that property ALWAYS HAS BEEN and STILL IS by far the best medium or long term investment vehicle. Short term blips may provide headlines but can never alter the inevitable upward curve of your property investment in Spain.

Some investors will get their fingers burnt (thankfully not our clients) but then some people seem to behave like lemmings or sheep rushing towards the pot of gold with no real knowledge or advice or because John down the pub invested so it has to be a top investment. Maybe a certain area is in fashion... (remember Tuscany and Provence?).

I can see this happening also in other so called emerging markets such as Northern Cyprus, Bulgaria, Romania and the Baltic States. I was employed as a consultant in most of these markets over ten years ago and that was the time to invest not 2007. Watch out for the newspaper headlines soon, "Life savings gobbled up in Turkey" or "Couple lose holiday home in scary bulgary"

So property owner in Spain? Here's my advice - Get yourself a bottle of Finca Luzon jumilla red, relax, enjoy the sunshine and don't worry - We are talking about bricks and mortar here and Spain has easily made 16% pa for the last 32 years despite these period hiccups and will continue to.

Article Source: http://www.123article.org

Mr Marsh is a Spanish property expert based in Murcia, Spain. His new web site, Murcia Direct, caters for Polaris World and Murcia rentals and he also is a Golden Partner of Polaris World Golf Resorts

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