Hundreds of properties at less than 700 Euros per square meter. This is an example of the offer of properties at the seaside that can currently be found in the Spanish market.
Five years after the end of the real estate bubble, banks and developers have decided to accelerate the absorption of the stock of properties that floods the market, mainly in coastal areas. According to the last report from the valuation company Tinsa, instead of selling the 100.000 properties that were sold in 2005 and 2006, there have been sales of 20.000 properties in 2013, figures that should not increase until, at least, 2015.
This is why, real estate companies and above all, financial institutions, have decided to apply great discounts on the prices of their properties. “Generally speaking, we are currently at price levels from 2003 with descents since the years 2007 and 2008”, María Monasterio, director of the office of Aguirre Newman Andalusia, explains.
Tinsa assures that the prices of properties have dropped by 18% only this year, nearly 30% since the maximum levels, a descent that reaches up to 38% if we talk about holiday residences. “Prices have dropped around 50%, especially in Levante and Andalusia, although it is also true that this is an average figure. But, in general, there are very attractive prices in all the coastal areas in Spain”, Luis Corral, managing director of Foro Consultores.
At the Mediterranean coast and, especially in Casares and Estepona (Málaga); and El Egido, Vera and Roquetas de Mar (Almería), the descent has been higher than 50% from maximum levels. “In the case of Andalusia, there have been important price reductions in Manilva, due to the oversupply, and right now it is possible to find one bedroom apartments for 50.000 Euros and two bedroom apartments from 70.000 Euros. Or in Almeria, in the area of playa de Vera, it is possible to find them from 50.000 Euros, the managing director from Foro Consultores assures.
The main forerunners for these great discounts have been the financial institutions.
The need of getting rid of the awarded homes, originated from foreclosures and exchanges with developers, have obliged them to make very aggressive offers. “Most of the properties we commercialize have a price around 692 Euros per square meter, much less than half of the current cost of the square meter (1519 Euros, according to the Ministry of Infrastructure, in the first quarter of 2013)”.
In spite of these sales, the level of sales continues being low to absorb all the stock from the real estate boom.
For this reason, banks and real estate companies have concentrated in the foreign buyer. “The foreign demand has increased and it will continue doing so each year. It comes mainly from Russia, United Kingdom, Germany, Scandinavian countries, Netherlands and France”, Carlos Ferrer-Bonsoms managing director of Jones Lang La Salle España explains. “In the Balearic Islands, the strongest demand comes from the Germans and the Russians, followed by the British, very similar to the percentages at the Costa del Sol”, he adds.