This guide takes a look at what constitutes a Spanish property bargain: we try to define what a bargain is, and give a compendium of 25 ideas to think about when searching for a Spanish property in Spain. To get the Completed Guide in a PDF printable version please contact us.

We have created the guide because we thought that our audience would need a set of tips and basic data about the current market, in order to get as close as possible to a property bargain in Spain. Also, when buying property in Spain, check out Spanish Property Insight by Mark Stucklin for more tips and recommended service providers.

The unfortunate situation of the economic crisis and property market collapse is: financial pressure on Spain, oversupply of properties and high price competition from sellers and Banks in order to attract final buyers.

These three factors result in one outcome: lower prices for home-buyers and more opportunities for investors. The reason for producing this guide is to help bargain-hunters to spot real bargains and to negotiate the best deal in a market of over-supply, such as the Spanish market.

The guide has 5 parts:
1) An introduction to the current state of the property market and property stock.
2) A definition of what constitutes a property bargain in the current Spanish climate and things that a bargain hunter needs to keep in mind before starting to make a purchase.
3) 25 Essential Tips For Finding Your Spanish Property Bargain: from the searching to the buying process.
4) An interesting chapter about how the exchange rate affects buyers. This has been written by Nigel Hodges, one of the best currency brokers in the UK, and sponsored by Currency Solutions.
5) A total costs breakdown when buying a property in Spain: “What Are The Total Costs When Purchasing A House In Spain?”. Please request this part via online. Please contact us

1.1 A user-friendly market profile to help understand what is happening on the coasts

Since 2011, property investors and home-buyers have begun to keep a close eye on property prices in Spain. The credit crunch and economic recession have brought about thousands of repossessions and shrunk property demand. The logic of the market dictates that property prices must go down.

1.1.1 How much have prices dropped?

The most recent figures come from the property prices index of leading Spanish company TINSA. Property prices have dropped an average of 12.5% in April 2012, compared with April 2011. To have a reference about the pace in which property prices are dropping, in August 2011, prices fell an average of 6.8% compared with August 2010. The conclusion of TINSA is that the average drop since 2007 is 30%. TINSA states in its report that the average drop in property prices is 25.6% since prices peaked in 2007, whereas on the coasts, the fall has reached 37%.

1.1.2 How much property over supply is hitting the market?

There are many different figures about the size of the property surplus in Spain. We are going to do a breakdown of the sort of properties that form the Spanish surplus – properties on sale, and developments to be launched on the market.

Borja Mateo is the author of “La Verdad Sobre: El Mercado Inmobiliario Español” (‘The Truth About The Spanish Property Market’).

The book is mildly controversial since the author discourages buyers to buy now. He believes it is better to wait a couple of years when prices will improve. He also emphasises that property developers, the government and Banks created the property bubble in Spain.

One of the startling quoted figures relating to the market is Mateo’s calculation of the amount of empty properties that exist in Spain. So far, the worst estimate has been 1.5 million empty properties in Spain, yet according to Mateo, the property stock in Spain is 6.1 million. Property Stock – Mateo’s calculations:

• Empty flats: 3.1 million of which 620,000 units are second-hand, are already on sale.
• Fully-built flats but not registered with the catastro (property registry): 1.2 million including 960,000 that are already in the market without a buyer.
• Units being built in unfinished developments because of credit shortages: 1.22 million.
• Properties with title deed but not registered with the catastro: 120,000 units.

1.1.3 The Coastal Phenomenon

The Mediterranean Coast is perhaps the most attractive geographical side of Spain for foreign buyers. Due to the property boom phenomenon (2001-2007), there is now a good opportunity for British home buyers and expats to choose from a large portfolio of coastal offers.

The recent property boom and expansion of credit has attracted thousands of foreigners, including Brits, to the Spanish coast. Costa Blanca, Costa de la Luz and Costa del Sol, are among the most famous locations on the Spanish Mediterranean Coast. Support from estate agents in the United Kingdom was a key factor in promoting Spain as a retirement destination or the ideal country for a second residence.

Despite the small decline in the number of transactions over the past few years, the British were still the biggest buyers in 2010 among all foreign nationalities, acquiring a whopping 4,350 properties (23.4%). The French came a distant second, at 8.3% of the buyers. In 2009, Brits bought 5,190 properties in Spain, or 31.5% of the total.

The most popular UK property portals, including Rightmove and A Place In The Sun, predicted that Spain will still be the most popular market for British buyers in 2011. According to a survey of 1,500 Brits noted on the property website, Brits were looking for a property abroad at a 151% higher rate in June 2010 than in June 2009.

The crisis and the purchasing de-acceleration, highly contrasts with the number of properties on the coasts. According to the Minister of Public Works, 70% of the newly built properties that need to be sold on the market, are on the coast. Such a surplus generated a 12% increase growth in 2009 alone, leaving the figure of 688,044 units for newly-builts. To this general figure, slightly more than 306,000 properties that are already off-plan or being developed, must be added.

There are 3 autonomic coastal regions that concentrate 50% of the Spanish property surplus: Comunidad Valenciana (17.4%), Andalucia (16.6%) and Catalunya (15.6%). Despite the decline in transactions over the last few years, the British are still the biggest buyers in 2010. Among foreigners, British buyers bought the largest amount of properties in Spain in 2010: 4,350 (23.4%), followed by the French (8.2%). Also in 2009, British buyers represented 31.49% of all buyers, purchasing 5,190 properties.

Despite the fact that the property stock problem can only be solved in Spain by Spanish buyers, with a essential of the economy and recovery of unemployment as the most important improvements, there are traditional markets that always deliver some positive results. For instance, according to the Comunidad Valenciana Government, in 2011 a total of 9,200 properties in Costa Blanca were sold to non-Spaniards – mainly English, Russians and Norwegians.

2.1 What Is A Property Bargain In Spain?


2.1.1 Property Bargains

In Spain, it is difficult to define a ‘property bargain’. Professionals agree that a bargain should be a combination of a good price, good location and good finance programme. A bargain should be a property sold at not more than the market price.

2.1.2 How can we define a property bargain in Spain?

Defining a property bargain is not a science, but nevertheless, our statement is that a bargain in Spain should satisfy the following criteria:
• A bargain should have a selling price lower than the selling price of other similar properties in the area, at the time.
• By working out how much interest you would pay to the Bank over a hypothetical 20 years mortgage, the resultant figure should be lower than the calculation, were you paying rent on the property over the same timeframe.
• The property should be well-situated. Beware of badly located properties in Spain. These are quite common. Don’t become over-passionate with the building layout and property specifications. These must be balanced with the property’s location, which should ideally be in or near an area having all the standard services and amenities and transport links.
• The cost of housing repairs (if needed) should not involve an amount of investment greater than two year’s worth of rent.
• The value of the mortgage, or ‘Loan to Value’ (L.T.V.) should be, ideally, between 70% and 100% (if required). However, it is important to remember that a cheap apartment or apartment with an L.T.V. of 100% is not necessarily a bargain.
• Regarding Interest Rates, it is good news that in 2Q/2012 the Euribor has been falling and it seems to keep going downwards. If you plan to arrange a mortgage with a Spanish Bank, you may be able to guarantee a fixed rate mortgage at a comfortable rate you can pay. Read and double-check Spanish Banks’ paperwork and contracts with a legal or financial adviser.

2.1.3 Things To Have In Mind Before Searching For A Bargain

• Before buying, be ready to see a lot of properties. During the property boom, home buyers would visit 4 or 5 properties before buying, whereas nowadays they may have to visit up to 50 different properties.

• Be clear about what your goal is in buying a property:
1. Is it for a permanent residence? If so, then you will have to carry on with all the expenses.
2. Is it as a temporary second residence? In that case, are you going to be able to sustain the costs of the home when you are not there? If not, then you will be able to save on your mortgage for a few months, if you let the property during those months.
3. Is it going to be a Buy-to-Let investment? Any rental yield (the profit dividend) above 4.8% can be considered an optimum yield in Spain nowadays and this could reach up to 8% in certain areas .
4. Is it going to be a Buy-to-Resell investment? Generally speaking, it will take considerable time for the price to pick up. Your buy to resell strategy should be for the mid to long term.
• Do not purchase by yourself without a financial and legal adviser – you may end up embroiled in a messy process and lose some money so that your bargain would become a liability.

• Hire a lawyer with good references, who can save you time and money, by making sure that there are no loose ends that will ruin the deal and cause you to regret the purchase in the future.

• With the right legal advice you will be able to ensure that:
1. all the licences are ready, including utility connections.
2. the property is free of charges such as I.B.I. (equivalent to Council Tax), utility debts, etc.
3. if your potential bargain is a repossession, the eviction process is going to be effective and you will not have to waste time waiting for it or experience complications later on.
4. all documentation will be ready at the time of the property exchange.

• If you want to multiply your options when finding a bargain, and further save time and money in your search, a good local estate agent will help you:
1. search locally for the best options and prepare a portfolio of properties for your perusal;
2. have a meeting with sellers in order to let them know your needs regarding average utility bills costs, access to local amenities, etc;
3. arrange viewings with sellers;
4. be the best intermediary figure in the price negotiation process.


Choose your location ambitiously.

Generally speaking, the location determines the price, however in the present market climate, certain properties in expensive locations may be more affordable. So, in terms of location, begin your search by focusing on your desired places. You do not have to abandon your ideal at the outset. There is nothing to lose in contacting local agents and trying to find your bargain in your dream location. With the current economic situation, there are, more than ever, many attractive options within your reach. Don’t be afraid of the asking price, when it looks to be outside of your budget, because the negotiation margin could be higher than you realise.

Lead the search and be ready to network locally.

Getting the support of professional agents is a wise move, but even with an agent, you should lead the search to ensure you master the local market where you are looking to buy. Make sure you can compare the asking prices of sellers
with the average prices for similar such properties, gathered in your field research. Do the research and get a feeling of the right prices for the housing profiles which interest you. As a first approach when evaluating prices, you could survey the market by going online and checking estate agent websites and property portals. After that, you can call the agents to find out the latest selling prices on specific properties. An agent will give you a more accurate picture of what you have discovered online.

In our view, at the moment, the best way to get a
property bargain is buying privately from individual
owners who need liquidity and quick cash.

There are many owners who match that profile. The difficulty is in reaching those sellers who have properties that fit your requirements. Opportunities with particular owners, come and go, quickly. That is why having a solid local network will help you to become aware of new bargains that are arising.

The Spanish Property Market is moving at a fast pace.

Buying from particular owners (through an agent) is, from our point of view, the best option right now. But as a statement, it will not last longer since the new financial reform may transform the situation and make Banks reduce the price of properties in a few months time, generating more bargains in the market.

About bargains in the Costa del Sol.

According to the D.E.I.M. Consultancy based in Marbella, most of the seaside towns along the sunny Costa del Sol have suburbs where, generally, concentrations of properties from the property boom are still on sale, resulting in prices with the highest drop since the crisis started. Therefore, if you are looking
for a bargain in the Costa del Sol, you may be interested in checking out those locations during your search for a bargain.

To deal with a seller directly involves risks.

For this reason, you will at the very least, require the services of a specialist lawyer, to tick all the boxes in terms of the legal status of the property, and the necessary licences.

Prices in Spanish property portals are higher than
privately-quoted prices.

You do not need to be very familiar with the Spanish language to shop around the online portals. The exercise will give you a fair idea of the market. Off that price, you may be able to deduct 10%, but it is not always a good idea if the property already has a good price since this approach could be a “deal killer” in certain “micro-markets” with not enough supply and therefore higher demand.

Your strongest ally is going to be the best property
agent that you can find.

Expect outstanding support from a local estate agent, who will endeavour to save you time and money. Their fee will depend upon the price of the property. Generally, the seller pays the agents’ fee, so there is every reason to find a good agent.

It is important to emphasise that looking for a
residential property on the coasts, involves emotional
factors that will blind you to the negative aspects of the

A good agent will help provide a neutral viewpoint on each property.

Repossessions straight from Banks are also an
excellent way to secure your property bargain.

There are plenty of Spanish estate agents dealing with repossessions.

Be aware of “bargains” offered by Banks, released in
specific campaigns, from time to time.

For instance, promotions such as the recent one from an online estate agent linked to a major Bank with ‘buy now and we will fit a new kitchen for you’ or ‘buy now and get a 25% discount’ offer. These campaigns are tricky since the Bank selects the portfolio of properties for the promotion, and so you might get a bargain, but on the whole, you will be more likely to find a better bargain if you search in-depth, online.

The potentially optimum time to make an offer for a
repossessed property is between the time of eviction
notice and moment of eviction.

This period could range from a few weeks up to a few months. According to experts consulted by The Spanish Brick, that is the best period in which a bargain hunter can extract the desired price from a Bank. The reason is that Banks wants to avoid the burden of managing a new property (with all the costs that are involved). Therefore, a bargain hunter has the opportunity to put a low offer on the table which is likely to be accepted by the Bank. This is a good strategy for property investors. In these cases, it is very unlikely that the buyer will be able to see the property before buying it. Location, specifications and price should be the deciding factors in the buyer’s mind. The condition of the property, which may need some refurbishment, will be a secondary factor.

As a starting point, when dealing with a seller directly,
reduce your offer by 20% of the asking price, when

Doing this, could be a way to guarantee a bargain in the negotiation process as long as you demonstrate that you are a serious buyer, eager to purchase quickly. Any discount higher than 10% is generally a very good achievement in this current market climate.


These can deliver superb bargains but it is very difficult to succeed if you are a home buyer. The bureaucracy involved (administration, legal fees, bidding time etc), does not guarantee that you will have attractive options even when you bid. But auctions can be suitable for property investors, specifically because the bargains that investors are looking for, do not always require a pre-determined location, unlike the case with home buyers. On top, hard-level bidding professionals take advantage of the fact that Banks are already in possession of too much property stock, and consequently, are able to acquire the Spanish real estate properties in court auctions with a discount of up to 50%. In some cases, the discounts can be even larger. For more information about bidding at auctions Click Here, as recommended by the Legal Adviser, Andrés Diez.

Buying from an owner before the auction comes into

Another alternative is to buy the real estate property before the auction is held. The negotiation power of the owner of the real estate property is weak because without a quick sale, the financial institution will ultimately repossess the property through the Courts.

Use a Rent-to-Buy option to secure a property bargain.

By developing a local network through agents, you will meet owners in need of cash who have to sell-up within a short period of time. You thus have two options: a) Negotiate at the minimum selling price in order to secure your bargain; or, b) Pay a deposit in cash and agree with the owner on a Let-To-Buy basis. In this case, you would become a tenant on the condition that you pay off the remainder of the mortgage on the property.

Attend local property trade fairs where sellers are
generally ready to consider your offers immediately.

On the whole, exhibiters, agents and developers, prepare special offers for exhibition visitors ready to buy. That is an innovative way to begin your adventure. You will mostly find that agents and developers are based in Murcia, Alicante and Valencia and consequently tend to offer properties in these areas.

Cash is King not only for particular vendors but also
for Banks and Savings Banks.

Get your cash ready for upfront payments to guarantee juicy discounts directly from from owners and financial institutions. As an example, a Savings Bank offered, in the last six weeks of 2011, a listing of 3,000 properties with a 50% discount, plus an additional 10% discount for Cash Buyers !!! Sounds good.
If you are an internet buff, check local newspapers and
local online property portals where you are most likely
to find bargains.

For instance, you could find a two bedroom apartment in front of the beach in Torrevieja at €58K in a local Alicante newspaper.

A tip about a very well-loved location by Brits:
La Costa del Sol.

The standard profile of a property bargain in the Costa del Sol is a 2 bedroom property within 3 kilometres distance of the seaside, with a price 40%-50% below the developer’s launch price, according to a local consultancy firm.


At this moment (Q2/2012), Spanish property bargains are most likely to be in the hands of private owners rather than in Banks’ repossessed property portfolios. The reason is that properties in good locations tend to be held by private owners for as long as their owners can manage, rather than being sold or being repossessed. These are the properties that private owners are making the effort to pay the mortgages commitments on, but if the current economic recession persists, and mortgages are no longer affordable by the owners, it is likely that the properties will come on the market again. Nevertheless, the pressure on the financial situation could force a new wave of attractive properties in prime locations, either being sold directly by the owners or as repossessions by Banks.

In the buying process, there are three specific stages:

a. The finding stage, in which the buyer or investor has to prepare all the research on and off the field in order to choose the right property. This is the only stage in which a buyer has plenty of mobility and decision-taking power. Get the support of an agent to save you time and money.

b. The technical part: where an agent and lawyer will oversee all the aspects that involve utility licences, debts on the property, etc, and double-check that all administration is in order.

c. The legal part of the buying process, which you cannot contribute much to, unless you are a lawyer.

Property bargains can also come from developers
despite the fact that their portfolios are usually being
promoted by local agents.

The advantage of buying from developers is that they are under pressure to sell, so potentially, you can secure a good bargain in terms of pricing, location, quality and specifications.


If you are buying from a Bank you might obtain a mortgage of between 80%-100% L.T.V. finance. If you are buying from a private seller or a developer, it is highly likely that you will secure a mortgage of around 60% L.T.V. The reason why you gain higher finance when you buy from Spanish Banks is because in this economic environment, they tend to finance their own property portfolios.

Impuesto De Transmisiones Patrimoniales (I.T.P.) in relation to bargains.

Be careful after you find your low cost property. The most expensive tax on property is the I.T.P., or tax for a property transaction (also known as the tax for the transfer of the title deed), which is for second-hand assets. Depending on the region, it will be charged at 7%-8% of the property cost, however every region has a minimum price table when applying the I.T.P. Therefore, if you buy a property for €100,000 and pay €7,000 to cover the I.T.P. in the sale-exchange, you may get charged an extra €1,400 if the property has a minimum value of €120,000, according to the Tax Office estimation. How much will the Tax Office estimations be? In most of cases, it will depend on the location and specifications. Never forget to ask your lawyer for advice about this point, to avoid the shock when the tax inspector comes knocking at your door, a few months after the transaction is completed!

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