Its well documented that Spain is a popular holiday destination with Brits but new figures just released by the Spanish government, show that Brits lead the way when it comes to holiday home purchase in the country. The figures are quite staggering, in 2008, Brits were responsible for over 57% of registered property sales with 11400 properties registered. The previous year, 2007 saw Brits account for over 60% of sales. Without doubt the economic crisis, has slowed down sales, but there are still property sales going through.
However, what these figures don't show, is how many homes are resale's and how many are new builds. Recently, many Brits have been finding it tough going, making their income cover outgoings, sterling has devalued significantly against t the euro and this has resulted in many Expats coming home or seriously thinking of coming home. What to do with the property though is a big problem at the present moment. Values are down, its not easy to sell property and further because of the economic downturn, renting is no longer that easy. This slump in the value of Sterling has seen an average Spanish holiday home now cost in excess of £30,000 more than 12 months ago. Many web sites, attempting to sell property are now beginning to mark property prices down, at the present moment, supply is easily out stripping demand.
Savvy investors or would be holiday home purchasers, are wising up to the fact that there is plenty of property around and are thus driving a hard bargain before parting with any money. Advertised prices are simply not being achieved and anyone wishing to sell a property quickly is often having to make some sizeable reductions. Property has basically been overpriced, there is too much of it for sale and a natural correction is occurring. Homeowners are not the only ones with difficulties though.
Beleaguered Spanish property developers are now finding a "double whammy" when trying to dispose of property. Firstly, they are up against the banks often over zealous attitude to dispose of repossessed property, developers claim that the banks are undermining their capabilities to stay in business by deliberately selling property they have repossessed as prices that are too cheap and with preferential mortgage terms for new purchasers. Now, Spanish banks have announced that they intend to reduce debt-for-property swaps with developers, due to, too many holiday homes being on their books, this is being widely reported in the Spanish press. Developers now face being lumbered with the units they cannot shift, which is concerning, given that there it is an estimated one million unsold new-build homes on the Spanish market. Of dear, it seems to the laws of supply and demand are hitting home in the Spanish property markets with a vengeance.
One million unsold properties, when this is juxtaposed next to the actual amount that are selling, it appears that the correction in the Spanish holiday home market is only just beginning. The situation is likely to get worse before it gets better and in the not too distant future there may be some fantastic bargains. Of course, there are already many companies trying to lure in potential purchasers with tales of bargain property, but has the bottom of the market been reached ? The collapse in property prices in Spain has resulted in many Eastern Europeans, looking to buy property abroad now looking more and more towards Spain but it will probably be quite some time before they overtake the Brits as the largest purchasers. The next few months will be very interesting, prices are still dropping and if Sterling starts to strengthen against the euro prices will drop even further, many Brits may they be tempted to snap up those empty units.