The perfect mix
There are different types of property to buy, from a studio apartment in Puerto Banús as a weekend or holiday retreat... to the luxury Marbella villa on a private estate for semi, or permanent residence.
"The low point of the market lasts far less time than people imagine. As buyers become more active and vendors more defensive, before we know it prices start to rise, as always, and almost imperceptibly at first."
There are different budgets, different locations, and a wide range of Spanish property opportunities whatever the market. Everyone is different, with their own individual criteria, vision and needs.
There are common types of decision, however, that apply almost across the board regardless of the individual or property: buy what is affordable; buy what is the best available; buy what works well for you today and into the future. These are the basic and simple rules not to be broken.
There are more fluid rules, however, those applying to the general market situation; the right timing; taking advantage of opportunity; ensuring great value for money.
By following the basic rules any Spanish property purchase, at any time, will always work successfully over the mid and long term. We all buy and sell at the appropriate time for ourselves and have to accept the market situation as it stands at that time.
How do you account for and take maximum benefit from the more fluid rules in the market?
Having witnessed the boom to bust scenario in the Costa del Sol property market of the mid ‘80s to early 90s, it was not difficult to spot the approaching 'Perfect Storm' again in 2005. A period of calm normality had followed the downturn up to 1998, when an incredible worldwide boom in property saw the Costa del Sol market rise inexorably to a huge peak of selling activity in 2004.
It was easy to see that prices had crested beyond real value, supply was exceeding demand and the downturn was underway. It gathered pace in 2006 and the market was almost at standstill by 2007, unsustainable at its previous levels. With low market interest, low sales, the slowing of construction and no new investment, the 'Perfect Storm' had reached the Costa del Sol long before the worldwide economic crisis.
Yet it was a predictable, natural event. Prices fell gradually back from false highs, developers hunkered down for 12-24 months and banks saw no hint of repayment or solvency issues in their customer base.
What happened in the worldwide economy in 2007-08 and throughout the early part of 2012 has, of course, utterly changed the market. Who would have predicted at the peak of the market in 2004 that properties would be changing hands in the middle of 2012 at prices more akin to 2001?
People who followed the basic and simple rules for buying Spanish property did nothing wrong. They were hit in 2007-08 by the worst economic recession in living memory and have suffered a freezing of activity and falling prices across the property market ever since.
And now we arrive at achieving the "perfect mix" for the right buyer. Buying for the right reasons.
Prices at certain new developments just can’t go lower. Buy at the right project and you buy into the same upturn as the smart developer who knows this will come and can afford to weather the storm. The timing is perfect - the value in today’s sales price is outstanding for the future and the opportunities are certainly here and now. Mix to this, buying what is affordable, best available and what will work best for you, and it becomes an all-round great bargain buy. A potentially significant investment at low risk.
All the timing issues also fit with resale purchases, as some vendors have no choice but to sell. Here the market is wide open with everything up for grabs and - for a period - at the lowest prices since 2001. Someone else’s unfortunate loss is your gain and by being in the market today there is every advantage in taking that opportunity.
The low point of the market lasts far less time than people imagine. As buyers become more active and vendors more defensive, before we know it prices start to rise, as always, and almost imperceptibly at first.
When the market can go no lower the smart money says buy, but buy knowing what your criteria for buying are and find someone to help you benefit most from the fluid rules.
Find yourself the most proactive, out in the market agent you can. The agent who is busy, who the best of developers, banks, and private vendors will flock to and who will therefore have the best stock. The agent who will be looking to meet a significant number of buyers’ objectives rather than being wrapped up in selling to one unsuspecting buyer a month in order to survive.
If you would like to know more or hear from us further please email us at firstname.lastname@example.org