Some time ago I wrote about why perceptions of the Spanish property market as being in trouble uniformally were totally wrong. I contested that this viewpoint failed to take into account the issues around location and demand.
I continue to hold this view and now it is being demonstrated more prevalent among other commentators on the Spanish property market.
Unbelievably there now seems to be an actual shortage of good property for sale in certain areas whereas other areas have a glut and because of their questionable locations the prices that people selling can ask for the property is still dropping like a stone and there is really no floor where prices may stabilise.
The areas where the price falls have stopped are as follows:
1) The large cities where there is internal, Spanish, demand for good quality property usually in the centre of the city or desireable residential locations. Demand will usually outstirp supply in these areas as the spae is limited and there are limits on new construction.
2) First line beach properties in the best coastal strips around Spain. There are hideous carbuncles like Marina D'Or in Castellon but areas that are perceived as more desireable or having more caché such as Marbella are seeing a large upswing in property transactions at good prices.
3) Unique properties: This is especially the case around Valencia. The estates grew up in a haphazard manner in general so all houses tend to be different from one another. The better constructed houses on better plots are maintaining their prices well because there is nothing to compare them directly too. In contrast, if a builder has thrown up, literally in many case, 200 similar semi detached houses of the same size of house and plot the only person who can sell is the one with the lowest price.
4) Areas of outstanding natural beauty: Planning and construction regulations are now much more strict that they were in the last decade and previously so if you can now find a house in a beautiful area that is already legalised and with all permits in place it is much more likely to hold its value as nothing else can be built there so again the supply is lower than the demand.
5) Well communicated towns. Prices in towns where people want to live, those with good facilities, easily reachable for work to a large conurbation, with parks, cinemas, shops, medical facilities and communications on both a real, transport, and virtual, internet broadband, level are holding up well.
6) Places where the pace of construction in the past was not the same as in the rest of the country. For example prices in Asturias in Northern Spain never rose as much as everywhere else and building was never the same as on the Costas, therefore the prices are holding up because there is still a local demand added to an incipient demand from abroad.
Let me just say though that you should take note of one thing here. I am not talking up the market. I am just giving examples of where things are ticking along quite nicely. There are ghettos, shocking estates and high rise rubbish to be found all over Spain just like any other country and the bottom of the market has only arrived there for "motivated" sellers where you can pick up very cheap property, I hesitate to call it bargain property.
If you have any views on this article then feel free to express them in the comments below. I will reply to any comments made.
Related Reading
1) More on Segmentation in the Spanish Property Market
2) Segmentation in the Spanish Property Market
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