We expect to see the Spanish property market recover somewhat from its lows this year and certainly with regard to volume of sales if not price. While the market for property in Spain throughout 2011 saw rising sales volumes and bottom fishing by bargain hunters at cheap property prices we expect 2012 to accelerate from this point.

 

In the first quarter of 2012 we have seen a big surge in sales volumes on the resorts in which we operate in Murcia. The market is being driven entirely by bank properties at present. However bank stock has diminished considerably in the last 18 months and we are seeing shortages in some areas. We appear to have passed the low point for prices late in 2011 as recent bank promotions have ended, volumes are still buoyant and there is less choice. Unless the banks want to accelerate sales there is no commercial logic for cuttting prices further. It is the banks that are setting the market pricing at present. There is no prospect of resale properties ever being able to hit the same low prices (execept for a few desperate sales that are snapped up quickly). Also any new developments would have to be at a profit. Current bank prices are below the cost of build so no new development will occur.

 

This year and throughout 2013 we expect to see shortages of quality properties in certain areas but not all. We expect the bank offers of high mortgages with the bank repossessions to continue along with a possible dumping by Spanish banks of the cheaper property that couldn't sell in 2011.

 

At this stage buyers of bottom of the market bargains in 2010 and 2011 are unlikely to be looking at significant gains in property prices if anything at all. But we do forecast a shortage, which we are already beginning to see on some of the Polaris World resorts in Murcia, where the absolute cheapest properties of a few months prior are no longer available to prospective buyers.

 

 

We expect in these years to be three years on from the price lows in the Spanish property market and many of the banks by 2014 will have cleared much of their stock. Pent up demand from buyers stretching back as far as 2006 and 2007 will continue to feed through as confidence in economies throughout Europe increases. The dream of a home in Spain will not have gone away for many people. While interest rates will undoubtedly rise, financing is still expected to be affordable and confidence in capital values, perhaps with property price gains in Spain by this point will be fuelling demand.

 

 

Well here's a bold prediction....the start of the next property bubble in Spain that had its seeds back in the half price discounting by Spanish banks and 100% mortgage deals of 2010/2011. Massive underinvestment in property projects by developers from 2008 onwards will have left a shortage of quality coastal holiday properties. Lifestyles and demographics in northern Europe will accelerate demand, economic recovery is well underway and property prices in Spain will accelerate.

 

To visit the Polaris World resorts in Murcia and to view our collection of repossessed property in Spain that we have with several banks please contact our office on +44 208 429 7115.