WELL, well, well. Demand, no surprise, has virtually ceased in the Spanish property market, though a few committed buyers are hanging in there and there are some indications of speculative interest from a few groups looking for bargains from desperate sellers.
They may be a little bit early, but as time goes by, there are likely to be more opportunities available.
However, as things ease, we anticipate a surge of interest from Northern Europeans locked up for so long they’ve made a firm commitment to move to the sun, with the charge probably being led by Brits keen to buy before Brexit makes life more difficult.
More good news:
- A digital marketing firm has reported that travel searches for trips to Spain in 2021 were up by 1,626% compared to last year. It should be a very busy spring next year.
- We are still receiving enquiries for building surveys, from buyers continuing with their purchases. The market still has life!
Discounts, agent and buyer incentives and furniture packages are being offered by developers still keen to sell their developments.
With finance and other fixed costs continuing, delay in completion of construction has always been a fear as it inevitably brings additional costs and risk.
There is the added fear that prices may drop, which would take only one or two developers to lose their nerve, and then the appraisal profitability disappears.
That can also enable committed buyers to back out of ‘time sensitive’ contracts, demanding return of deposits, and so the whole development finance crumbles.
Valuations: The outbreak of Coronavirus has required all RICS Chartered Surveyors to declare all valuations, until further notice, as subject to ‘material valuation uncertainty’. Note that the uncertainty is in the market and not the valuation. Survey Spain will be continuing to provide our valuations principally based upon adjusted current asking prices, and agreed sale prices, where these are supplied by pre-acquisition building survey clients. We consider that these sources reflect the current market more accurately than if we were relying on comparison to historic valuations or Registered sales, which information always lags behind the market.
Statistics – the average difference between the Asking Price and Actual Selling Price
We keep a record of these along with our valuations. Though the numbers of examples is relatively small, they give a good indication of the general strength of the market. Also, our statistics cover the geographical areas from Alicante to Cádiz and Gran Canaria to Menorca.
Quarters of 2019
- January to March – 7.61%
- April to June – 10.69%
- July to September – 9.7%
- October to December – 11.29%
Quarters of 2020
- January to March – 8.66% – This figure is the average of a range from -2.53% to -13.69%
Whilst the statistical calculation is correct, it is very much biased towards the beginning of the year, when optimism was high, and the virus was largely unknown. It should also be remembered that many of these reductions will have been achieved after we have provided the buyer with a building survey report, enabling them to point out to the seller the defects and quantify the costs of remedying them.
With an average valuation over the period of 946,880€, our survey fee is repaid many times over.