Is it the right time to buy?
Nobody can say 100% whether now is the right time to buy, speculating that property prices have reached the lowest possible level. Many experts have failed to predict this accurately since 2009-10. The fact is, prices have been dropping since 2007 and the average drop on the Spanish coasts is about 34% whereas in the cities, it is around 30%. In addition, there is a margin of negotiation for buyers to secure a lower price than the asking price. We would definitely say that this is the right time to search for properties in Spain since there are already excellent bargains to be found there. It is certainly a right time to buy, if you are serious about buying now.
Has the market touched rock-bottom?
Again, that is difficult to be 100% sure about, but we believe that with the general financial pressures of the Spanish economy, and the financial reforms that were adopted in early 2012, it is very likely that during 2012, the housing market will reach its lowest, in price terms. It is also unlikely that the property industry will recover in 2013, because the economy will take considerable time to re-stabilize. In other words, prices shall probably stay low for a protracted period.
What sort of market are buyers facing at the moment, if they want to buy?
For sure, it is a buyer’s market. 10-12 years ago it was very difficult to bargain on price, since the market trend, was ever-increasing price rises – ‘if you do not buy now, in 3-6 months, the price will be 5%-8% higher, or even 10% more expensive…’. That was the belief, and so any asking price was accepted. But currently, the situation is the opposite: now it’s a buyer’s market rather than a seller’s. Presently, the large supply of properties in the market, is causing prices to decrease: large supply + low demand = lower prices. In addition, the financial problems that Banks and Savings Banks are facing, due to their large property stock, is forcing them to release more and more assets into the market at lower prices. This also increases pressure on private sellers who are now competing on price with the discounted Bank stock.
In this scenario of oversupply, do I still need an Estate Agent?
Your Estate Agent is your ally. We encourage you to contact an agent to get advice, provide buying options and arrange viewings, to make your life easier and save you time and money during the buying process. In this distressed market, there are many professional agents, however, it is very important to choose the right one for you.
Should I be sceptical about agents and developers?
Have you watched “Cowboy Developers” on Channel 4, in the UK? If so, you know that everywhere there can be sharks. Bad press in the UK tarnished the Spanish market during the boom of the 2000s. Now, the Spanish market is becoming more transparent. Professionals are driving the market and substandard agents and developers had to close or run away when the bubble burst. Always obtain good references!
Other articles of interest:
- Homes Sales in February 2012
- 10 facts about the Spanish property market in 2012 !
- New PM To Reduce Tax Pressures For Property Buyers
- Can Property Prices Drop by 75% because of Ageing?
- Spanish property living a second boom