Spain: Paradise Lost?
June 26, 2009 - Posted in Articles
It was with some trepidation that I sat down to watch the first part of ITV’s 2 part documentary entitled Spain : Paradise Lost.
As a long term resident of Spain and the owner/manager of an estate agency here I am always wary when the media get the teeth into the Spanish Property Market.
To a certain extent my fears were proved right as we were told the usual stories of disastrous experiences suffered by the unfortunate people who had got themselves embroiled in the financial trap of owning properties that were either, difficult, or impossible to sell in the current market conditions.
Whilst the cases shown were typically extreme it is fair to say that the current economic situation has put many people into the position where ownership of property with big mortgages is proving to be a liability.
I spend a large portion of my working life at the moment advising people who find themselves in this type of situation. Property Owners who for one reason or another either cannot afford to continue funding their mortgages, or who need to release their equity in order to use the money for other purposes.
The majority of the problems all seem to be rooted in the amounts of money that have been borrowed. Over the last decades we have all fallen into the trap of believing that borrowing was the way to fund the lifestyles which we believe we are entitled to. The Financial Institutions made this so easy.
They desperately wanted all of us to jump on the bandwagon and it seemed that the borrowing frenzy was never ending. The availability of money helped push the house prices up, and rising house prices increased the feel good factor making us all feel wealthier, better and more important.
Now it is clear that all that has stopped. Hopefully the banks will take a more responsible attitude to lending in the future and for our part, I hope we will take a more responsible attitude towards borrowing. But where does that leave the property market, and more importantly Spain?
I am extremely confident in the future of the Spanish market. As agents we resisted the temptation to diversify into the new markets and have remained focused on the Costa del Sol. Our Offices are all seeing increased inquiry levels from genuine buyers and sales are being made on a daily basis.
We have noted that the buyers are currently coming from more diverse countries and in recent months Dutch, Russian and Spanish buyers have been the largest groups. The British have dropped back into fourth place, mainly I think, as a result of the low pound, but even this seems to be rallying and so far in June the number of British Inquiries has increased dramatically.
The Infrastructure on the Costa del Sol coupled with the best climate in Europe have always made it the most logical place to own a second home or to come and live. We have a truly multi-cultural, multi-national society and now, with lower prices it is more affordable.
As the programme stated at its closure, “The British love of Spain seems to continue” from our perspective that seems to be true… but it is not just for the British!
Regards
Michael Moon