Is property in Spain worth a punt?

Spanish propertyThe Spanish government estimates there are 700,000 unsold new-build houses across the country currently on the market thanks to a massive oversupply of houses. So does this mean that property investors will be able to pick up a Spanish property investment bargain?

Spain has long been a popular destination for British expats who have looked to the country for their retirement years. The strong demand for housing led to a buoyant Spanish property market.

However there is now a massive oversupply of new property. The Spanish government has estimated there are around 700,000 unsold new-build properties across the country, 400,000 of whch are thought to be on the coast and in the south, where the majority of expats reside. Of all Spanish properties sold to foreigners in the past few years, a third were sold to Brits.

On top of the new builds, there are around the same number of older homes currently up for sale at the moment. These depressing figures mean that some homes are now worth as little as 50% of what they were worth four years ago – and there is massive competition amongst those looking to sell.

It comes as no surprise to discover that Spanish property experts believe that the average house price is set to fall even further – with some estimating that prices will fall by as much as another 20pc.

The Spanish property nightmare reinforces the fact you should always purchase property with resale in mind. Estate agents have said that well maintained properties in prime locations will be sold quickest; those that are identikit in not-so-great locations are finding the property market difficult.

If you have cash, you may be able to pick up a bargain in Spain. With the massive oversupply of houses, now is a great time to bargain over the price. However don’t expect to see returns quickly – Spanish property in general should definitely be seen as a long-term investment and not a place to flip a house quickly.

It is as important as ever to do your research. The problem of Spanish properties being built without proper permission is thought to have affected as many as 100,000 homes on the coast so ensure that everything is 100% legal before buying.

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