The Spanish property market is still at the top of the list for investment and holiday homes. However, in view of many new and emerging markets, the competition is stiff and the knowledge and experience required in finding a suitable property is extremely high.
In the past few months I have researched the Spanish property market and I would like to share some of my discoveries with you.
Before I begin, please remember that I am happy to advise you on a purchase of a property in Spain whether you are buying it through the Spain Homes Network or from another source. My contact details are at the end of this email.
Due to declining sales of properties in Spain, many estate agents in Spain have now expanded their business to selling properties in other countries. This, in itself, is not necessarily a bad thing but in some ways, gauging the Spanish property market through these estate agents is no longer a good formula to be used.
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As the chairman of the Spain Homes Network, I receive many requests from developers wishing to promote their properties on the Spain Homes Network site and whilst we all need a good selection of properties to be able to select the right one, some of these developers are offering outrageous rewards to anyone who sells their property.
Here is an example. A few weeks ago I have received a request from a development company in Spain offering 18% commission to any agent who sells properties in their development. Much more alarming was the fact that the offer also included a free property to any agent who sells 9 properties.
This means that the development company will be paying 18% commission on the selling price of any property sold, up to 8 properties and then once an agent sells the 9th property, a further reward in the form of a free property will be provided.
On a 200,000 Euro property, 18% commission amounts to 36,000 Euro which means that the developer will only receive 164,000 Euro. I can’t help wondering who is really paying for this outrageously high commission. Any idea?
It’s YOU – the buyer of the property.
Offering a further reward at the level of 200,000 Euro (the free property) means that from the initial 9 properties the developer is loosing a further 22,222 Euro on top of the initial 36,000 Euro paid in commission leaving the developer with 142,000 Euro.
Even as a company providing marketing services for properties in Spain, I cannot understand this practice and in view of what is already considered a tough market, practices like this one will result in a negative impact on the local property market.
The truth is that the Spanish property market is a Buyer’s Market now and whilst many portray a Buyer’s Market as one we need to stay away from, the reality is that there are lot of bargains available particularly in new projects pre or in construction.
I have also looked at some market analysis and property price trends for Spain; according to one source (MRI) Spain’s expected growth this year is between 10% - 15%. The other source (Kyero) is showing a slight decline in the price of 1 and 2 bedroom properties towards the end of last year with a recovery in the current period. More importantly, it seems that the larger properties with a higher value hold their value more consistently.
Whilst our own statistics focus more on the desirability of Spain as an investment destination, our own data is showing a drastic increase in the number of people looking to purchase a property in Spain within the next 12 months and these figures apply to mainland Spain as well as some of the Spanish Islands (Mallorca, Menorca).
The mass buying of properties in Spain that we have all experienced until 2004 has definitely changed and in my view, the main reason for the change is the availability of properties in new and emerging markets such as Hungary, Bulgaria, Czech Republic, Slovakia, Poland and even Brazil and China.
The important point is that if you are looking to buy a property in Spain, the current Buyers Market offers fantastic bargains and providing that you are provided with the right information your property will maintain and increase in value inline with the performance of the local market.
I have an Irish friend who always says: The day you buy it is the day you sell it. That means that buying the property at the right price will ensure a good return when you come to sell the property.
Once again, please remember that I am happy to advise you on a purchase of a property in Spain whether you are buying it through the Spain Homes Network or from another source.
Please feel free to contact me at the office or on my mobile at any time to discuss your property or investment requirements in confidence.
Best Regards
Ilan Slazenger
Chairman
Spain Homes Network
www.spainhomes.org
020 8440 9933
0774 0025 860
International +44 20 8440 9933 and +44 774 0025 860
