Property in Spain August 2010: Is it Time to Buy Yet?

When the Spanish property market had been taking a severe beating for about 6months my brother in law (of an estranged sister whom I was meeting for the first time, and proud owner of a French leaseback in Rhone Alps) said to me: I know things are bad in Spain now, but do you not think at the low prices of some of the properties that it is worth a punt for long term gains? Something like that anyway, well it was a good while ago.

Anyway, what I said was: I have never liked Spain; it's predominantly overcrowded, overdeveloped and worse; overvalued. Even if you were getting a property in a popular area for 30% what it was priced at in 2007, there is a high probability that it is still 20-30% overvalued, not to mention the fact that the strength of the Euro is adding. But if you can pay cash then there are some cracking repossessed properties out there.

If he asked me the same question today I would say pretty much the same thing. The banks have hidden bad loans and manipulated the figures, the official house price index continues to report prices down a fraction of what other indices and agents are reporting, and all the discounts you hear about are on new build properties and may not even be a discount at all.

There are some cracking deals on repossessed properties being marketed in the UK, but you really need to go and stay in Spain for a while if you intend to buy a repossessed property. I say this because they sell really quickly, and it is a good idea to view any property before you buy it, thus to see it before its gone you need to be near it.

To answer the question of is now time to buy? Yes, there is availability of repossessed properties set to continue, and Sterling has had a run against the Euro and taken a further 15% of properties in the EU. But do your research; avoid over developed areas and only when you have found a sound location where supply levels are around about the same as demand (yes, there are some places that had previously gone unnoticed), then camp out and start making offers on distressed and repossessed property.

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