25/02/2014 – Cinco Dias
If any investor still doubts whether to enter the real estate market or not, maybe the fact that the prices turn out to be the most attractive in the history might convince them. There is a nice outlook for the price-supply relation, aided by approaching financing. (…).
Due to the fact that the prices fell by 30%, up to 50% in some areas, the investors might find it appealing that luxury assets, such as villas and second houses at beach fronts depreciated by about one, two million Euros in the first case and in the second one houses are available from €30.000 on.
However, experts claim that the best business one can do at the present situation is to buy a dwelling and lease it as renting demand has soared up significantly recently.(…). Yield could reach 6%, let alone the present public debt (currently at 3.6% for 10 years) and deposit that is less jeopardized by risk than the security market.
The last case is when an owner lives in their house and is planning to renovate it. (…) Each kind of buyer can find property for themselves.
La Costa del Sol glamourous again
According to experts, luxury does not know recession but the truth is that when the real estate bubble burst, even the high-standard property had to adjust the prices. (…). Right now discounts creep up to 20%, however only in case when an owner is in hurry to sell their house. Also, demand for them is higher so the moment an attractive asset appears, it sells like a hot cake.
What is more, places considered luxury, like the Balearic Islands, Costa Brava, Marbella and several places within Alicante, like Altea, Javea or Moraira start to welcome potential purchasers again. Vast majority of them come from the United Kingdom, France, Russia or Belgium. In turn, such nations as the Chinese or the South American seek primary assets in the best areas of Madrid (Salamanca, Chamberí, Retiro) and Barcelona (Pedralbes, Sarrià and Eixample).
The interest of the foreign investors has been awaken partly by the Law for Entrepreneurs which guarantees nationality if at least half a million invested in the Spanish property.
Securities in the city centers
Manuel Gandarias, managing director of the Research Department in Pisos.com claims that “it is the best moment to buy and make up for living from renting”. Demand is growing and so does profitability, now oscilating between 4 and 6%. Places where investment will bring considerable and stable yield are: centers of big cities, well-communicated districts, areas adjacent to universities or administrative and business centers. (…). Houses give 4.7% yield while trade premises and garages 6.8% and 3.6% respectively. Another good option is to buy an entire building, renovate it and add to its value. (…).
Moreover, offices shall appear on the to-buy-list of investors for two reasons. Namely, due to the big supply of units requiring reform available from 2.500 to 3.500 Euros per square meter, after renovation worth between 3.000 and 3.500 Euros per square meter.
There are investors who, awaiting the credit to be granted again, also consider buying a better house (so-called replacement residence) than they own right now. (…). Specialists say that if in order to buy a new house the owner must sell the old one, under no circumstances shall they sell at lowered price. Undoubtedly, it is advisable to sell before buying as no bank will grant any bridge credit, so popular in the golden times of the boom. The cheapest houses are found in Murcia, Extremadura, Castilla La Mancha and Castilla y León, offering discounts higher than 10%.
Pick from Castellón to Cadiz
These areas offer wide range of property of all sizes, at affordable prices, of better and worse quality, close to the Sea/Ocean, on the top of the mountain, etc. The Valencian coast has been impacted by the bubble burst the most harshly. In that area, for example in Torrevieja the prices plummeted by 43%, in Oropesa del Mar by 48.3% and in Gandía by 46%.
In Andalusia, nearby Vera prices fell by 43.5%, setting themselves at the lowest level of €30.ooo. When it comes to Malaga, prices start off from €80.000, in Catalonia similarly, however one must consider the accumulated decrease of 53% (in some municipalities). Other locations offering vast supply and budget prices are Alicante, Murcia, Granada´s coast and Cantabria. (…).
Original article: Cinco Días (Raquel Díaz Guijarro)
Translation: AURA REE