Spanish Property Market Split

The Spanish property market has been split in two according to a leading Marbella property agent. Michael Liggan of Altavista Property Spain said that the recent release of thousands of repossessed properties has confused and split the market.



The sudden availability of thousands of repossessed properties is as a result of action taken by the Spanish central bank, the Bank of Spain. The leading 23 Spanish banks have been given less than six months to dispose of approximately €135 Billion worth of toxic real estate assets. This is an effort to increase liquidity within the Spanish banking system and to help kick start the economy after the recent deep recession. The Spanish government believes that the sale of these properties to foreign buyers will give a boost to the country’s ailing economy.



According to recently released figures, the banks aren’t doing too well. The figures show that the banks are managing to sell five properties per day on average. However, they are still repossessing more than that amount each day. To encourage sales the banks are now starting to offer 100% mortgages on selected properties that they hold. Some are also offering foreign buyers 80% mortgages with a three year payment holiday. To add to these measures, the banks are also forcing developers who are in their debt and who hold large stocks of empty properties to massively discount prices, especially in coastal cities where foreign buyers tend to make their purchases.

Mr Liggan said that private sellers cannot hope to compete on these terms. He also said that all is not lost for the private seller. Very cheap repossessed homes tend to be in poor areas and in a bad state of repair. New repossessions tend to be either unfinished or in partially completed developments. On the other hand, the properties of private sellers tend to be very well kept and in much better areas.

"This is a dilemma for the British buyer," said Mr Liggan. "Do you buy a cheap rundown property with generous mortgage terms or obtain a much better home at a higher price?" Michael said that his firm has a special department dealing with the sale of repossessed properties. He added that the market is changing rapidly and that a British based buyer will have to work hard to keep up with a situation that is changing daily.



The Spanish minister for development has recently made a visit to London to encourage institutional investors such as pension funds to buy up wholesale lots of repossessed properties. These big buyers tend to skew a local market when they make a large purchase. Michael said that specialist knowledge is needed to find the best property at any particular time and Altavista Property Spain are making great efforts to provide the best service they can to guide a client through the ever more complicated maze.



Michael Liggan also advised that potential buyers should not get too hung up on buying a repossession. He said that there are many extremely good offerings available from private sellers in the Marbella area. He stressed that the first choice a buyer should make is the kind of property that would make them happy. All other decisions should be based on that first one and buyers should not be distracted by apparent bargains that will turn out to be more pain than gain in the long run. He strongly advised that buyers should get independent advice from property experts in the area that they are attracted to and not try to go it alone when the market has become so fragmented.



AltaVista Property puts the emphasis on clients’ requirements. We focus our efforts on matching client requirements and sourcing suitable properties, but given our longstanding experience in real estate and knowledge of this market in particular, we are also able to identify those properties that offer great value. Michael Liggan is a driving force and our chief property bargain hunter.

www.altavistaspain.com