The Spanish Brick has just had a quick chat on the phone with the most controversial, but reputable, Spanish property gurus.
According to the Spanish property expert, Borja Mateo, author of three books about the Spanish property crisis, property prices in Madrid are in a process of stabilisation: “a process that probably started 12 months ago”.
Against hard criticism in Spain (especially from Spanish authorities), Borja Mateo defended, in April 2007, his thesis that the property crisis would last for several years and property prices would keep dropping at least until 2014. Time has proved him right. He is a property guru.
The Spanish Brick asked only three key questions.
TSB: Is Madrid running out of property bargains for those who haven’t bought yet?
BM: Property prices are not rising. The second-hand market is living a process of stabilisation and prices could drop further more. There are always opportunities, but they are neither visible, nor obvious.
Now is the time to take decisions. I have serious doubts there are many bargains in the market yet. It is important to thoroughly search in order to find bargains and catch them quicker. I recommend working with The Spanish Brick; this will guarantee you buy a bargain property, if there are bargains for what you’re looking for, that is. If there are no such bargains, with The Spanish Brick, the investor will at least get to buy at the right price according to the current market.
TSB: For property investors in Madrid, which yield should they aim for?
BM: Investing in a property that can deliver a yield below 3% is very dangerous, especially in Spain. Currently, in Spain, a yield above 8% is very good.
TSB: Have property prices in the main cities, Madrid and Barcelona, dropped enough?
In Barcelona property prices have grown from 2% to 3%. In Madrid, we see signs of stabilization. We have to be careful with Spanish property portals with “inflated” prices. With properties listed in portals, the negotiation process must be properly conducted, otherwise you buy expensive. Moreover, interest rates may rise in a future (they are at their lowest ever), which will affect property prices.