Half Price Spain - The Biggest Property Sale In Europe

As an investor and business owner in Spain for the last 12 years I have seen the economic conditions change dramatically. Before the Euro came in there was wild speculation and people were buying property and land like crazy. After the Euro inflation was 60% in one year; Spain effectively priced itself out of the market. Now they are paying the price.

The crisis, as they call it here, hit Spain before the UK and it hit harder, and is continuing deeper. I am based in the south of Andalusia which is a largely rural area that has built itself up on tourism and foreign investment.

Unfortunately the investment got out of control and speculation fuelled a building boom of incredible proportion. There is so much over supply that whole urbanisations sit empty or unfinished all along the Costas and none more so than the Costa del Sol.

People paid deposits on the promise of a resale before they had to pay the full amount; mortgages were granted on the strength of rental incomes that just cannot be achieved. This fueled more building that one could have imagined, and local councils were bribed or coerced into giving permission for developments that should never have been built.

The administration in government in Andalusia is ineffective and slow at best and there are more administrators than any other workers now. One of the biggest town halls on the Costa del Sol is Estepona and they spend over 80% of their income on staff. The telephone and the electric company restricted their service for non payment and now they can only receive incoming calls and they must not put the lights on.

All this has lead to a melt down in the property market and prices have fallen through the floor. The speculation lead to over building and now there are twice as many homes as needed. One developer recently made the national news when he cut the prices of his new apartments from 420,000€ to 195,000€. The people who had bought at the old price are not best pleased and I think he went into hiding.

I myself have a home that I wished to sell; valued at 410,000€ a couple of years ago, yesterday I was offered 230,000€. The thing is that some people have to sell and repay debts or tide the stem of cash that property here absorbs. There are urbanization fees, local taxes and services, and the electricity company doubled their prices over the winter (that caused an outcry).

The simple fact is southern Spain has wonderful countryside, beautiful beaches and the sun for over 300 days a year. But the real draw to northern Europeans was the cost of living. Since the introduction to the Euro Spain has priced itself out of the market and all they have now is the sun. It is cheaper to live in England that in Spain and the standard of services and living is higher; Germany too is cheaper that many places on the Costa del Sol.

So is it all doom and gloom for Spain? Well in the near future it does not look good; their government is ineffective on a local level and incompetent on a national one. Their system of administration is out of control and needs a clean sweep, corruption bureaucracy and a complete lack of confidence in ability make me weary.

But there is hope and Spain will recover; just a little slower than elsewhere. There is a run on property and you can buy at half price. The question is what the value is because if it is only worth half then there is no investment potential. But I believe that there is a potential and the long term investor would do well to snap up a bargain or two.

Beach front 2 bedroom apartments are going for as little as £100,000 and they will always be worth more than that for their location and rental value. Some other homes are incredibly well priced too and if I were looking to buy then the home that I have in Marbella at 230,000€ would be a steal. So I am not selling; when I think of what the same money would by in the UK I realize that there is value here. And despite the over building and the speculation; the huge developments inland or on the hills behind the towns, there are areas and places of great beauty, with a limited supply, and although they are tarred with the same brush now they will rise from the chaff in the coming years and once again be desirable homes in the sun.

So if you are in a position to do so and have ever wanted a home in southern Spain my advice is to buy now while the half price sale lasts. If you are serious and want to find the best deals feel free to get in touch with me directly for some advice on where to look.

To see my home and see why I am holding out you can visit http://www.Marbella84.com