Is Property Being Reduced by 50% – Truth Or Myth?

With all the negative press and constant reminder that we are living in a recession and a crisis at the same time, blocks of homes sitting empty while the banks hang on to the money needed to buy them, is there any light at the end of the tunnel? Yes, is the most commonly used answer, many feel we have reached the bottom as the world economic markets are bouncing back and recouping their 2009 loses and more locally the property market on the Costa del Sol is being stimulated by the drop in house prices by up to 50%.Just like waiting in long queues at you department store when it is sale time, so is true for bargain properties that were not so long ago up for sale for 200,000 Euros are now being sold for 100,000 Euros. As a result of these hard times, young couples are moving into new apartments, of one bedroom generally, for 100,000 Euros which we are told to find a comparison we would have to go back ten years and in more recent times buyers would end up buying a studio apartment or an old property in a poor condition.However, there is a catch to these 50% bargain properties that are being sold for a 100,000 Euros along the Costa del Sol with the best offers being in the Axarquia area, such as Valle Niza and Torre del Mar, and properties located inland from the coastline. Also in areas such as Benahavis, Casares, Estepona, Manilva and Sabinillas there are also many reductions of up to 40%, with Benahavis and Casares having the more up market properties within a short distance from the beach by car.In some areas along the Costa del Sol, property prices have become immune to the current market variations and prices have maintained. In some cases sellers are willing to reduce their price by about 20%, but nothing further then that in areas such as Marbella, San Pedro del Alcantara, Nueva Andalucia, East Marbella, Malaga City and so on. The reason for why these areas are not dropping huge percentages off the sales price is because in previous recessions Marbella and it surrounding areas was still very much a resort tourist driven area, but things are different now. Before the economic meltdown of 2008, the Economic Stimulus Plan had already been started with State funds flowing into the Andalucia regional government, pouring hundreds of millions of Euros into improving basic services on the Costa del Sol, such as:o Road improvements and the new tunnel under the N340 at San Pedro del Alcantara. Construction of new schools, hospitals, parks, water desalination plants, together with improvements to the coastal railway system. Three promenades between Marbella and San Pedro del Alcantara are being joined making 13 kilometers of uninterrupted beachfront.
o Under current construction is the Malaga airport extension which will increase the amount of passengers arriving on the Costa del Sol by millions, together with the inclusion of the new AVE high speed train which connects other Spanish cities with the Costa del Sol.
o Commercially projects such as the Technological Park of Andalucia, outside Malaga city has on offer over 100 high-tech companies working in fields such as computer processing, solar panels, etc. Like Silicon Valley in California, the Technological Park of Andalucia will market the area as a centre of advanced technology and attract more companies offering well-paid jobs.All these factors above and including that the unofficial population of full time or part time residents in Marbella is more then 300,000 makes Marbella a fully functioning 12 month of the year resort that does not depend entirely on tourism. For these few reasons alone, this is why Marbella and its surrounding areas are not affected by the current property market prices and will generally hold their value.Conclusion
Our advice to potential buyers on the Costa del Sol is that this is the time to buy if you have the availability of money; there are bargains of up to 50% for properties inland or further away from the Costa del Sol, but if you are looking for a good quality property, in a good location then prices will not reduced by more then 20% – 25%. Be realistic and when making offers, do not offer a ridiculously low offer as sellers know that they have a good product and will not sell it for 50% less.Finally, the reason why good quality properties in good location are maintaining there high prices is because there are few promoters will to take the risk of building luxurious properties in such hard economic times, therefore increasing the demand for good luxury property. For those who want to buy luxury, remember there are good deals on the market place with a possible saving of around 20%.