A home in Spain means nothing but the same?
Despite the slowdown in the Spanish property market there is still an astonishing volume of new properties coming onto the market targeting the holiday home buyer. So why, asks Mike Hamilton, Director of Murcia based Casas de Lorca, is the vast majority of Spanish property stock aimed at the holiday home market when over 70% of clients are looking to buy in Spain to live there full time?
“The first point to make” says Hamilton, “is that the difference between the two property styles is significant in itself. Apartments and duplexes and even some villas are built for short term accommodation; they are often smaller than your average home in the UK, with fewer appliances and accessibility can sometimes be a problem for the less mobile. You also have to bear in mind that out of the holiday season many resorts become like ghost towns with local shops operating restricted hours and few permanent residents. The 112m2 minimum detached villas that we construct on individual 5 acre plots around Lorca offer accommodation suitable for full time living with local stores providing year round supplies and the properties themselves offering a lot more space and freedom to make a real home.”
The OPP Spanish report in July 2008 extensively researched the market for Spanish property and concluded that 71.4% of all clients wishing to purchase in Spain were looking to live there full time; Mike Hamilton has seen these findings backed up in his own research: “75% of clients enquiring for property in our area of Murcia are looking to live here full time which just shows that there has to be a massive shift in the way we look at where and what we are building.”
As an established real estate developer in Spain, Casas de Lorca, has seen the market rise and fall and in the current conditions has now chosen to not only look at what the statistics are really saying but also change the mind set and assumptions that are made about buying property in Spain.
“The last 5 years has seen a dramatic increase in the amount of residential development in Spain” says Hamilton: “and expats who have relocated and retired to the country are now ending up very disillusioned as well. This is a great shame as some areas of the Spanish coast are now being tagged by the retiree community as being areas that promote ‘First world prices, third world services, and underworld practices’ as a recent article in The Spanish daily newspaper ‘El Pais’ reports. We at Casas de Lorca want to demonstrate in our work ethic and our high quality product that there are regions and companies that offer the ‘original’ Spain, taking people back to basics and offering a safe and sustainable place for people to retire and relocate to.”
‘El Pais’ goes onto report that sales to expats in the region of Costa Blanca fell by 50% in the first quarter of 2008 compared to last year. The article quotes Gerard Peret, a Swiss national who bought a home in 1990 in Orihuela Costa: “We used to love it, but now it has all changed because of excessive, out of control development, everywhere has been built up, and there are so many people.” And as Hamilton explains what the locals are witnessing is true: “What developers in the region of Murcia are continuing to try and push through the system is incredible; 51 new golf course development proposals in the last 5 years really shows what a desperate place Spain is in.”
“I must take us back to the statistics though” Hamilton says: “ We have to ask ourselves, why is over 90 percent of the new property coming onto the market aimed at the holiday home market when over 70% of clients are looking to buy in Spain to live here full time? The reasons are various, but in essence many developers have simply failed to understand how the Spanish market has been changing.”
“This discrepancy led to an over supply of holiday homes suitable for short stays which meant that many developers had to cancel their plans for golf and coastal apartment developments. Moreover many investors struggled to sell on their off plan holiday apartments with the gains that they had been promised. This effect was heightened when the exchange rate plummeted from around 1.45 euros to the pound in Nov 2007 to 1.23 in April 2008, so many potential buyers decided to wait to see if the exchange rate would improve before investing.”
Brits buying property abroad, according to a recent overseas property ‘hot spots’ report compiled by Conti Financial Services, a UK leading overseas mortgage specialist is still highlighting that Spain is number 1 with buyers even though they have seen the gaps between overseas markets tighten. Simon Conn, Sales and Marketing Director at Conti Financial Services, says: “Spain and France are still leading the pack, albeit with a narrowing margin, and it’s not difficult to see why. Affordable prices, low interest rates, easy access and great weather have all contributed to the attraction of these destinations.”
So what is the future for Spain? And what is drawing buyers such as Drew Broadley to buy 4 plots of land in Lorca with one being put aside for his future hopes of retiring to the region?
In order to understand this we need to look at what other property markets have to offer and why Spain stands out; accessibility, climate, culture and of course price are the main factors to evaluate. Many investors have rushed to buy cheaper property in Eastern Europe attracted by low entry prices but it remains important to be sure about the accessibility, the climate and the culture as they may wish to sell the property in the future.
“Spain has a very strong future in international property. It is tried and tested and is the number one European destination for people looking to retire or relocate. In fact a recent report from Cater Allen Private Bank, part of Banco Santander claimed that over three million Brits are likely to buy a property overseas within the next two years as economic conditions in the UK make strong returns less likely”, comments Hamilton.
“I chose Spain to invest in because of its popularity with the British, the large number of retirees that are looking for something different and the simplicity and cost of return flights” says Drew Broadley, a retired buyer from Scotland. “Developers such as Casas de Lorca have focussed exclusively on lifestyle properties, building classically designed villas on 5 acres of land. This whole exercise was an investment and I cannot say enough as to how good Casas de Lorca was in handling the purchases. It is extremely helpful to have English nationals on any Spanish estate agency team, it just makes the job so much easier and reduces the chance of a misunderstanding.”
Sales Director Mike Hamilton concludes: “We have continued selling at a controlled level right through the credit crisis and the downturn in the overall Spanish property market. People who are retiring or relocating cannot wait forever and flexible payment terms have allowed people to make their dreams a reality.”
To find our more about all that Casas de Lorca has to offer contact Mike Hamilton, Director of Casas de Lorca on 0844 734 8057 or visit www.casasdelorca.net.