The Spanish property market is starting to recover timidly after the last two years of constant falling prices and lack of bank lending. Now the banks are loosening up lending for those who have some money to put down as a deposit and on their own repossessed stock they are looking to finance at 100% where possible.
When I say recover though this is not everywhere and not on all types of property and I definitely do not mean that we will soon see price rises. Bearing that in mind, let me give you a couple of examples where I do not see the falls stopping currently.
If a property is "prime" then it has an intrinsic value which cannot be denied. A "subprime" property does not have an intrinsic value. It is prone to market sentiment and demand. There is no demand for "subprime" property outside of the big cities and the periphery of those big cities. An example would be a property built on an estate of similar properties inland from the beach with no facilities around and where an owner has to use the car for everything. As petrol prices and transport prices in general inexorably rise over the next few decades these properties become less and less desirable. Conversely the opposite is true of course, prime properties with little travelling distance to conurbations and facilities become more desirable meaning their price rises while the former drops increasing the disparity in prices between prime and subprime.
Another sector to suffer will be coastal properties without rapid access to the coast. Over the last decade the description "coastal property" was abused to include property even a couple of kilometres or more from the coast. Arbitrarily I would say that if you cannot walk comfortably to the beach carrying your stuff for a day by the sea then you don't have a coastal property. First line and even second line and third with sea views hold their value quite well because obviously they have a prime position and there is limited supply. Fifth line only becomes front line if the sea level rises predicted in the next century come to pass but then the view wouldn't be too good anyway, skeletons of ex first line properties.
What holds its value then? As people move ever more so into cities and large towns to look for work, these areas keep their value as the demand curve outstrips the supply curve. Remember that a city centre flat is a city centre flat and there are limited numbers available because of planning restrictions and replacement new for old. No more land is available for development in the centre of Spanish cities so there is little chance of supply outstripping demand as long as people keep moving to the cities as seems to be the trend in the whole of Spain.
Another type of property that will hold its value are those that have that something special, a spectacular view, great and timeless design, security features, facilities and more. If you wrap all of these aspects up into a whole in one property then you have the perfect property investment and quite a nice place to live too. Some examples of perfect property investments can be found on our website of course, Valencia Property, but the same applies all over Spain in the prime areas.
Related Articles:
1) Is the Time Right To Buy Cheap Holiday Villas?
2) Real Estate Investing in an Uncertain Market
3) You Might Have Noticed By Now
WhatsApp us
