If you have witnessed the plethora of signs announcing "Distressed Property Sale" that are appearing everywhere referring to distressed property for sale in Spain, then I speculate that maybe you may have been intrigued enough to look into a potential acquisition of a property for sale in Spain yourself?
Prices of property in Spain are tumbling just as they are here in the United Kingdom and often they are falling at a greater rate. The financial problems of many Brits who bought a property in Spain for their retirement is compounded by the feeble exchange rate of the Pound to the Euro. This is a double edged sword that is bringing great distress to many retired Brits who have no choice but to list their property in Spain for sale and prepare to return home.
There are many reasons for the proliferation of distressed property for sale in Spain. Here are just a few:-
It took just three months starting in Oct 2008 for the Pound to loose nearly 30% of it's purchasing power in Spain as it tumbled against the Euro from almost 1,3 down to just over 1 Euro/Pound.
Some Brits who retired to their own property in Spain found that they could no longer afford to live there as the value of the Pound slid. This particularly applied to those who's income was derived from the UK, whether a UK pension or rental income from a home rented out in the UK.
Even worse off are people who acquired a property in Spain on the back of a Euro loan, expecting property prices to continue to rise and are repaying the loan from their UK income denominated in GBP.
And ultimately, the property has been repossessed by the Bank or Mortgage company and put up as a distressed sale because the owner could not keep up the payments.
A combination of massive property oversupply, poor and in fact criminal planning grants, alongside the general economic downturn has meant that prices have literally crashed on Spain's Costa's and as we speak over a million unsold properties are on the books of hapless local agents in Spain, although many of these have been constructed with Spanish buyers in mind.
Of course British have always been purchasing property in Spain since the 60's and their passion for the Costa Del Sol and especially Marbella always was a first choice. More recent investors in property in Spain, even if their property has not been designated as a distressed property for sale, may still be distressed themselves. Not realising the enormous profits that the early comers made, these late-comers could well be finding that they made a huge error.
But all clouds have a silver lining. Today you can buy at the cheapest prices we are likely to witness, I would put forward. As the fall in property prices levels out and banks allow developers to remortgage projects, the Spanish market is witnessing confidence return. The number of distressed property sales in Spain could be set to stop increasing as Estate Agents in Spain are increasingly expressing confidence that the fall in the market is now stabilising.
There is nothing novel in below-market deals, but the critical monetary position of many builders, financial institutions and property owners is pushing more sales into the distressed sale class which in turn means that further deals are being completed below real prices rather than merely at a reduction to the asking price.
Experienced investors have been persuaded to seek for and obtain low, mid and high end finest distressed property at a price truly below their open market value by the mix of a severely restricted means to get to money and falling property prices in Spain.
With the new trend in all-found holidays declining and more of us preferring to hire our own living accommodation and as a result have a many independent holiday, the rental marketplace for up-market houses is booming. This further builds a case to mull over buying a house overseas, although the hire earned on vacation lettings seldom recovers the complete yearly mortgage payments and running expenditure so prudent cost planning is suggested.
As any savvy investor will advise you, it's the rate that you pay instead of the rate that you sell for that really dictates the earning ability in many a property deal. Marbella in southern Spain is a real case in point of a 'lifestyle' investment choice, fundamentally a holiday home that can provide a fabulous center for personal vacation and that will be retained for at least 5 years.
For those of you who are well-off enough to be able to put up a deposit of approximately thirty to fourtypercent on a distressed property investment in Spain and who can access the know-how of the leading consultants, lawyers and banks, today in fact is an opportune occasion to purchase a magnificent property in a distressed sale position for up to fifty% lower than the existing market price, and crucially enjoy their investment in the Sun.
This 50 percent price cut on particular properties is down to the fact that they are heavily discounted by the title-holder (or the bank if by now repossessed) by a considerably larger sum than the median price decline in Spain. This is in point of fact an opportunity for the new investor to advertise the property nearly immediately at a higher price.
Distressed Property. Is Distressed Property For Sale In Spain On The Mend?
