“Crisis, what crisis” as Spain property dips again
By Kevin Barnett, 14 Feb 2012
Spanish media looked at the latest property prices dip and declared that the “crisis worsens”, while international buyers welcomed the worst year on year January depreciation in the last four years.
It was also welcomed by the pro property, new Spanish Government that wants better affordability and is pushing banks to slash residential property prices by introducing higher capital requirements and greater provisions on dodgy property portfolios.
Property portal, idealista.com claimed January was “the worst month since the Spanish housing crisis started four years ago”, supported with figures showing prices dropped by 9.4% compared to January 2011.
Considering December and January are traditional the worse property sales months, the average month on month reduction of 1.9% matters even less as average prices remain above the EUR 2,000 per square metre mark which equates to a typical 2-bed apartment priced at only EUR 130,000.
In some prime Costa areas that’s low enough to attract serious international investors as they sense good yields from a still growing self-catering tourist market that helped push the country’s visitor income to a record high in 2011.
Around 36% of bank-owned property is in coastal locations, funded heavily, built during the real-estate boom by speculator developers and now fully built, key ready and exciting bargain hunting buyers from Scandinavia, Germany, Benelux and Britain.
A spokesman for bank-owned property specialists, PropertyInSpain.Net said: “Crisis, what crisis? Price reductions are good news for both international and Spanish buyers. The affordability ratios are skewed by international buyers who can afford to pay more for prime property in prime locations, whereas Spanish buyers still benefit from improved affordability of the city suburban properties they tend to buy.”
The banks have been accused by their regulator, the Bank of Spain, of holding back the best properties from market until better times and house price increases. Bottom of the market “bargains” have been offered to bank staff, their relatives, their best friends and customers. Yet still around 600,000 remain unsold – around
a year’s supply in the pre-slump era.
They will be looking to the discerning international buyers to snap up prime property in prime Costa locations and will be under pressure from the government and regulator, the Bank of Spain to release more and boost sales with even greater incentives.
IMAGE: Spain's last on-the-beach new homes in Costa Calida
Spanish Property News from PropertyInSpain.net