WHY BUY NOW?

To answer this question, we need first to analyse the current situation within the real estate market in Spain.

What do we know?

We know that many of the main players during the boom years have disappeared. At the height of the bubble there were approximately 7,000 estate agents in Andalucía; 3,000 had already closed by the end of 2007 and if the regional trend replicates the national trend then about 65% will have gone by 2009. However, the professional, long-established agents will survive, as they did in the last downturn in the early nineties. The speculative buyer has also disappeared, and this is a good thing, as they were partly responsible for prices rising at the ridiculous levels over the last ten years. We also know that the banks have put the squeeze on, due to the world wide financial crisis which has caused the banks, at least in Spain, to scrutinise all mortgage operations to a maximum whilst also reducing the amount that they lend. Unemployment during 2008 rose at 2,500 persons per day! Equivalent to nearly 1,000,000 people in just a year, and Spain currently leads this list in Europe with 3.2 million unemployed, and rising. From which, 70% came from the real estate and construction sector. There is an excess of over 1,000,000 unsold, finished properties in Spain, according to official figures. And of course, all of this doesn’t contribute to a “good feel” factor.

But despite all the doom and gloom, there are buyers around. They are discerning buyers in a buyers market, carefully looking for and selecting bargain properties that are becoming available and which will continue to appear during the course of this year. Although the pound is weak against the Euro, this does at least offer a big advantage to the British seller selling in Euros as they can purchase more pounds with their Euros than just a few months ago. In this way, sellers can bring their prices down to sell and in turn offset to some degree the exchange rate difference for the buyer.

During the boom years, many speculative buyers purchased property off-plan with a view to selling on before the complex was completed. Many of course accomplished their plan. Others did not, and are now caught up with one or more mortgages that they didn’t bargain for. These properties are beginning to appear as well.

Some good news

The projected municipal marina has been passed in principle and is expected to start soon. This will inject much needed infrastructure and new business opportunities to the Nerja area, something that has always been lacking, together with the absence of golf courses, shopping complexes, etc. This project could be the catalyst to jump start the market on the eastern side of the Costa del Sol.

Is the time right?

ALL property markets go up and down, in much the same way as does the stock market. But unlike the stock market which rises and falls on a whim, the property market is far more sustained in the long term, both in the good, and the bad times. Property in Spain rose and fell in the seventies, in the early nineties and again now in the new millennium, the first signs of slow down appearing in 2007. But with stocks and shares, what drives buyers to buy again? Downturns in trading, new emerging markets, or better still, stocks that are simply on the floor! This approach can be applied to the property market, but when? Fortunately, the property market is less volatile than buying shares. It runs in cycles, at a smoother rate, and over a longer period. Spain is currently experiencing its third cycle since the early seventies. But each time, the market has bounced back, and particularly in Spain, in a big way! The time is right, now!

One of the keys to recuperation is that the Spanish banks begin to release finance packages and mortgages, and given the current stagnant state of the market, this must happen in early 2009. This will provide the means to buy again, and the market will slowly re-emerge. When this happens, confidence will return, and prices will begin to rise again, simple supply and demand, and albeit difficult to put a date on it, it's essential to buy now whilst prices have dropped, and thus take advantage of substantial returns over the medium term. And if you're purchasing with a long term plan, as opposed to speculation, such as to live or buy a second home, then even better. Your investment will grow even more.

Conclusion

Bargains and well priced properties are beginning to appear. And when they do, they sell, proving the point that there are buyers out there. Everybody is simply waiting their turn or opportunity to pounce. This may sound as bad news for the seller but again, analyzing the price increases over the last ten years, any seller who has owned their property for a number of years has seen a dramatic increase in the value of their property. They can afford to drop their price if they really need to sell now and still obtain an attractive return.

So this year is all about carefully searching and selecting the property of your choice at the price you can afford. Seek and you shall find!

BUY NOW, FROM ABROAD.

People are buying now. They are taking advantage already of the "buyers market". If you're familiar with this area, a purchase can be made from a distance or abroad. Once you have decided upon the property that you wish to buy, we can introduce you to a local lawyer who can liaise with you to thoroughly check all legalities of the property enabling you to proceed without you being here. The purchase can be completed by notarised power of attorney or by post-purchase ratification. In this way you can act quickly and not loose an opportunity! Please see our Buyers Guide.

If you have been considering a purchase in Spain, this is the time! And do so with confidence, as Bargain Properties Nerja, a family business, is backed by over 30 years of sustained and uninterrupted property sales experience in Nerja!

Finally, Bargain Properties Nerja is a new service, launched 1st February 2009. It may appear that there are few opportunities currently available, but this will change during the course of this year. Keep tuned to our website as we will be adding more properties of this kind as they become available. Alternatively, please join our mailing list providing details of the type, price and location of property that you are seeking and I will send you updates of new offers as soon as we have them.

Scott Edwards - Bargain Properties Nerja.