This is a question that I have asked myself in several occasions. I am obviously talking about Spain, the main subject of this blog.
Some experts state that the market is full of bargains. Lets see if it is true.
150,000 Euro is a relevant amount of money. This amount can buy you a very decent house in certain parts of Spain. However, this may not prove sufficient for the main cities. For instance, in accordance to our research this amount would prove insufficient in cities such as Guipuzcoa or Vizcaya. The picture is different in cities such as Alicante or Almeria and their surrounding areas where the stock of properties is larger. In those areas, 150,000 Euro could buy you a very decent house in a good area. However, punters need to be aware that most experts think that property prices will continue to fall for at least another 1 or 2 years. If you are buying the property as an investment you may see that the value of your property falls down, although it should not be as accute as for those who bought from 2005 to 2007.
Statistics show that there is a better demand for properties that are worth less than 150,000 Euro as these are the type of properties that Spaniards can afford these days. These properties can also be let for an affordable rent that will hopefully cover the investor’s mortgage. As many know by now, committ to a very high mortgage and the rent will never cover the monthly instalments. On the other hand, if your mortgage is affordable, within the 400 to 800 euro range, you may have a chance to cover the mortgage with the rent.
The last trend in Spain is to buy from banks as they have a good portfolio of repossesed properties and in many occasions will die to give you a mortgage (and therefore get rid of a property that is affecting its balances account wise). However, not all banks have been realistic with their pricing and a good amount of their properties are still overpriced for the current times.
As Manuel Luque used to say in a very famous tv advert in 80’s Spain: Search, compare and if you find something better..buy it. 30 years down the line and still a very wise saying.