Time to Buy 

 

 

 

 

 

 

 

Over 90 properties have been reserved since the banks slashed their prices in December. There is limited stock available and when it's gone it's unlikely anything will be sold at that price again. Our current discounted bank stock at up to 50% below 2007 prices is below the cost of build. So when Paramount Pictures build their theme park close to the new Murcia airport and developers look to build new resorts we don't expect anything close to these prices.

 

We have seen a huge surge in sales in the last quarter of 2010 finishing with the strongest month since 2007 as the banks cut their prices to get rid of their remaining stock.

 

The cheapest prices now are artificially low because of the remaining stock of property held by four banks. Of the 10,000 or so properties built by Polaris World on six resorts over 90% are sold. Over 3000 properties were sold back in 2007 alone. The banks own a few hundred and the central bank in Spain is putting immense pressure on the regional banks across Spain to sell their repossessed properties quickly in 2011.

 

It means they have to sell the remainder and the Spanish banks who recognise the importance of the international market for Polaris World resorts have appointed Villa Cashback as agents to sell mainly to the UK, Irish and Scandinavian market. Villa Cashback is the largest seller of property across the six Polaris World resorts and in 2010 over 80% of all CAM bank repossessed property sales on the resorts were sold through our agency.

 

The banks have instructed us to sell many of the properties at 40%-50% discount. This has fuelled the market and opportunistic buyers have returned to grab these bargains and the best remaining properties. Many of our customers this year have been registered with us for three, four and even five years when Polaris World was first heavily promoted on TV.

 

This leaves a small window of opportunity for buyers and it will not last. The bank stock is selling quickly and will accelerate as we hit 2011. Once the bank stock across four resorts are sold we are back to "normal" pricing with choice being limited to resale properties. There are no new properties being built - the resorts are complete. The market in general in Spain has fallen around 20% from peak. Market pricing for resales on the Polaris World resorts is typically 20% below 2007 prices, not 50% below as we are seeing for the remaining bank stock.

 

Hacienda Riquelme is a good example of this. A property priced at €180,000 in 2007 can now be bought for just under €90,000 brand new from the bank. However a similar resale property would be priced at €145,000 to €150,000.

 

 

All three of those properties above were similar prices, around €180,000 in 2007.

 

At Condado de Alhama we have bank properties at €78,600 which were priced at €131,300 back in 2007. Terrazas de la Torre has some frontline golf apartments at €96,000 down from over €140,000 and Mar Menor has large luxury apartments with two bathrooms starting at €159,000 rather than the original €220,000 and three bedroom villas at €300,000 previously over €400,000.

 

So, 2011 offers the perfect oportunity to buy in at hugely reduced prices while stocks last and before the opening of the new airport in Murcia late in 2011 and the expected go ahead for the Paramount Theme Park.

 

Call our UK office on 0207 060 1475 for advice and more details.

 

 

With a big uplift in sales activity and enquiries in the last six months the Polaris World resorts are very much starting to shape as two distinct markets.

 

1. People trying to sell close to prices of 3-5 years ago.

2. Buyers picking up bargains at up to half that price from the developer and from bank repossessions.

 

Depending who you speak to will determine the view you receive on the market! There is still a stock of unsold property held by resale agents - which two years ago was the place to get bargains. Now, the market has changed considerably.

 

Most owners can not afford to sell at today's market price, but the banks and Polaris World the developer can - with deals up to 30%-40% below 2005-2007 prices. Hence we are seeing the best deals at present with the developer and banks but they do get snapped up very quickly. Particularly as these organisations can offer 90% and 100% mortgages as opposed to the normal 70% on a resale property.

 

Not every agent is contracted to sell on behalf of Polaris World and the banks. At Villa Cashback we offer the full range of product (resales, bank and direct). Hence we get a comprehensive view of the market, can advise accordingly and find the best investment and property for our clients' needs.

 

 

We have seen a significant change in the market from twelve months ago. Confidence began to build through the middle of 2009 and took off later in the year. Realistically priced resale property has always sold on the Polaris World resorts. Currently the best priced resale properties for a particular home type tend to sell within a month or two. Those vendors realistic about their listing price tend to take offers perhaps 5%-10% below asking price.

 

We are now seeing some fantastic offers on bank repossessed properties and stock clearance direct from the developer. The advantage of these deals is huge price reductions - typically 30%-40% below prices of the last three years plus high mortgages of 90%. We occassionally have offers from the developer with 100% mortgages.

 

Interest rates on mortgages are around 2.5% per annum so you can buy a €90,000 apartment on a 90% repayment mortgage at less than €400 per month. That's comparable to the cost of a two week holiday package deal for a family of four in high season. Plus you are guaranteed your accommodation! Buyers need a good credit record, be able to demonstrate and prove income and their ability to afford repayments.

 

Whereas buyers were very cautious in early 2009 (and rightly so in terms of the world economy) that feeling now seems to be shifting to one of grabbing a bargain before the deals expire. Prices are now very affordable (for example frontline golf from 95,000 Euros, second line from around 87,000 Euros) plus villas can be purchased on established resorts from around 160,000 Euros.

 

Prices have stabilised recently and news in the wider market is that resale prices in Spain have started to increase in 2010. The Nicklaus Golf Trail is now established at Polaris World and with the new Corvera airport set to open next year (three airports will then service Murcia) and the possibility of the likes of Paramount Pictures building a theme park and studios in Murcia (with the land next to Condado de Alhama resort the most likely destination in Murcia) the region is set for exciting growth in the coming years.