There’s some good news for lovers of Spain from the Spanish property portal Kyero.com; the average price of a house in Spain this April is 3.6% lower than it was just a year ago – so you can get a bigger piece of Spanish real estate for your Euros in 2008! But before you get too excited, the bad news is that your Euros may now cost you 16% more to buy than they would have if you’d bought them a year ago…
This is because the Pound is currently worth significantly less against the Euro than it did 12 months ago, so the house price depreciation benefit that Kyero.com has highlighted is eroded by the strong Euro/weak Pound situation. This particular currency situation has arisen because global confidence in the Pound has been dented temporarily; this is thanks to worries about the knock-on effects in the UK of the sub-prime mortgage crisis in America and the near-collapse of Northern Rock last year.
Unfortunately, all of this currency negativity has been putting Brits off buying Spanish property when in actual fact, now is probably a perfect time to buy a home in Spain. The IMF predicts that the British economy will grow more quickly than the Eurozone economy over the next two years; you can negotiate some spectacular deals with Spanish property developers; and you can certainly protect yourself from negative currency fluctuations if you know where to look for foreign currency exchange advice.
According to the foreign currency exchange specialists at Moneycorp, British buyers should not be put off looking for property to buy in Spain just because of the strong Euro/weak Pound situation.
What’s more, Moneycorp don’t believe that buyers who have already bought a Spanish home should panic either. Those who have bought a property under construction and who are making stage payments, for example, can still buy their Euros now, because it is possible for them to take a neutral stance on future exchange rate movements. They can buy half of their required Euros today and half at a future date, when the outlook for the rate of exchange becomes clearer. Those who have invested significant funds in a completed home in Spain already can withdraw equity and benefit from cheaper Euro mortgage deals; they can also enjoy greater benefits from the Euros they release by converting them into Pounds!
Moneycorp can also offer more financial security to those who are interested in buying a property in Spain and who have yet to negotiate a deal. They can actually pay a percentage deposit now while fixing an exchange rate for the balance of the funds required, for settlement at a later date. No other money need be paid until that settlement date arrives; this approach to currency exchange is known as a “forward” transaction and it is exactly the strategy that larger investors are adopting right now as they seek to cash in on the weaker housing market in Spain while knowing exactly how much Sterling they will have to pay.
According to Mike Hamilton, Sales Director of Casas de Lorca: “seasoned investors are well aware that in a market environment where there are weakened sales projections, developers will ensure that those coming to the market are given the best deals possible.
“For those with the money to buy in, a slowing property market such as the one in Spain right now represents the absolute best time to buy. Not only are the smaller and the less scrupulous developers squeezed out of the market, but the larger developers who know what they have to do to generate sustained interest in their projects go all out to accommodate the buyer.
“It’s a buyer’s market in Spain, and the buyers who negotiate the best property and currency deals will reap the strongest possible dividends in the future.”
So, you can get more for your money in Spain if you speak to a currency exchange specialist like Moneycorp, as they will show you how and when best to trade your Pounds for Euros. Then, because it’s a buyer’s market, you can get more for your money if you approach the larger, more robust and reputable developers.
A highly detailed report in the Irish Independent recently backed up this theory, stating that in a weaker property market, every buyer heads for quality… This holds true just as much in Spain as it does in Ireland.
Let´s take a look at a developer, such as Casas de Lorca, as an example. This company is building some of the highest quality, most attractive properties in Spain’s Murcia region. They give their buyers the best guarantees in the business, they offer homes on five acre plots of land and they build to five star standards, guaranteeing not just the title deeds and the build quality of their homes, but the fixtures and fittings as well!
If you buy through Casas de Lorca you are buying off-plan and you can make the most of their flexible payment plans and wait for the Pound to bounce back against the Euro. You can also get real value in terms of what you purchase; for example, you get five acres of land with their luxurious five star villas.
Casas de Lorca clients are also given the option of purchasing now but spreading their payments over a period of up to two years, giving them even more time to win the currency fluctuation game with expert help from someone like Moneycorp. Or buyers can use a Euro mortgage to fund their build, so that they can benefit from future exchange rate movements in their favour.
The Casas de Lorca projects mentioned are near the town of Lorca in the Murcia province of Spain. The company offers buyers the chance to own a stunning, custom-tailored villa with classic architectural features, such as rows of arches, courtyards, or walls of glass. The villas are each located on five acres of land and these stunning properties are for sale from just GBP 196,900 / EUR 265,000, which buys you a four bedroom villa. This offer really does give buyers the chance to own their very own home on a rolling five acre estate, rather than a generic apartment on a housing estate in an urbanised part of a popular Costa!