Spanish Property Market Overview

What goes up must come down! Since 2004 price increases on the Costa del Sol have been more modest – just under 10 per cent in 2006 and predictions for 2007 are between 5 and 10 per cent.For buyers used to a market where investments double in a few years, the current situation seems stagnant. Rumours of the bubble bursting and property recession are in the air. Estate agents report that resale properties are now taking far longer to sell and developers have noticed a definite slowing up in the number of off-plan purchases. And for the first time in several years, developments are being finished without having been completely sold. Many back-to-back buyers hoping to sell their off-plan property before signing the final title deeds have been caught out and have found themselves having to complete on purchases they couldn’t afford.

But, consult a local expert, especially one who has been in the property industry since the early 90’s, and most are quick to stress that single-figure price rises are normal and signs of a healthy property market with mature prices. Many predict that the next market cycle on the Costa del Sol will consist of several years showing between 5 and 10 per cent returns. And, it’s worth remembering that as a secure annual return, this provides a good medium to long-term investment. Most importantly, almost everyone firmly believes that prices generally will not go down – the odd desperate sale by a would-be back-to-back buyer who can’t pay the mortgage or a property owner in need of ready cash are possible exceptions – but it’s still worth placing your money in bricks and mortar on the Costa del Sol. There’s also excellent buy-to-let potential as new relocators all need somewhere to live.

While the Costa del Sol is no longer the place for a quick profit – property investors out for short-term gains have now turned their attentions elsewhere – for the investor with medium to long-term plans the Costa del Sol is your oyster. ‘Se vende’ signs are everywhere, but what should the discerning buyer look for?

Property gurus always claim there are just three considerations when choosing a property – location, location and location, and within a relatively small area, the Costa del Sol offers a surprising variety of locations. Take your pick from the hustle and bustle of urban life, the peace and quiet of an inland retreat, front-line beach positions, golf-course properties and panoramic views from coastal vantage points.

Once you’ve decided where, it’s time for what. Quality is the key here. During the property boom, many homes were built quickly with little attention to quality and finish. These were bought by those in search of a quick profit and many are now for sale. Avoid them and set your sights on quality construction. In a slower market, developers are keen to offer as much as possible and nowadays many complexes come with 24-hour security, generous gardens and heated pools. The properties themselves are spacious and fitted with a range of features: top of the range appliances, sound insulation, domotics, sophisticated heating, alarm systems… Choose the best you can afford.

As well as a variety of location, there are also different types of properties. If you’re looking for a home within a golf resort offering services, it’s worth looking at Doña Julia, Finca Cortesín and Valle Romano at the west end of the coast, the resorts in Mijas Golf Valley in Mijas Costa or La Parchite Golf and Los Merinos in Ronda. Football Village in Valle Romano gives you the chance to boast a footballer as your neighbour.

If you want the services provided by a luxury hotel but in the comfort of your own home, several hotels offer the chance to buy an apartment within the hotel. Las Dunas and Villa Padierna in Estepona and Cruiser Hotel (currently under construction) in Torremolinos are among the five-star possibilities. For those thinking of retirement within a purpose-built complex, consider Sensara in Benalmádena, Vitania in La Cala de Mijas and Sol Andalusí in Alhaurín de la Torre.
But above all, take your time. It’s your market and there’s plenty out there. Shop around and make sure you exactly know what you’re buying before you sign on the dotted line.