The Truth About The Spanish Property Market in Marbella

Luxury Villas in Spain

Spanish Villas

We just received a property for sale in Spain enquiry that just compelled me to write this blog and just illustrates why UK citizens are missing out whilst the rest of the world takes advantage of the Spanish property market.

To quote the buyer on a property that is on our site for 1.25 Million Euros, the clients proposed to pay 200,000 Euros Cash for the property. I suppose if you don’t ask you don’t get but it does show the ignorance of a lot of perspective buyers from the UK mainly being fed from the uneducated UK Press.

The reality is for these would be buyers the best deals were bought last year in the Golden triangle of Puerto Banus, Nueva Andalucía and Marbella or other similar prime location areas in the Marbella property area.

The first example is La Zagaleta where all the great deals between 2 Million and 3 Million Euros have now been taken from the market. So now you will have to pay closer to 3.5 Million Euros for a property you could have bought last year.

Another example is a very good client and friend of mine who bought in a development close to the beach in Puerto Banus for 399,000 Euros. Now the least expensive unit in this development is selling for 525,000€ so in reality my client could actually sell his property now for a profit.

There will always be exceptions to the rule but the reality is that the best deals are in the past and every month that goes by the more likely it is that your property in Spain will cost you more not less.

That is the reality of the market but unfortunately the majority of UK Buyers seem not to think that’s the case mainly fed by the UK Press.

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Property for sale in Spain

Property in Marbella

8 Important Factors that Force Spanish Property Prices Down

luxury Villa in Marbella

Marbella Luxury Villas

With the Spanish property crisis continuing I thought it would be a good idea to take a look at the why property prices are so low and also see why these reasons don’t apply to luxury property sales in Marbella and Mallorca

1) Employment and expectations of finding a job: due to the unemployment rate in Spain (25%), most people are reluctant to commit themselves to buying a home. Obviously most people buying luxury villas in Mallorca or Marbella this is not a factor.

2) Financing: financing is non-existent in the real estate sector, and the granting of mortgage loans is unlikely to return to normal over the coming months due to uncertainty regarding the macroeconomic situation. In the current climate banks want to avoid any type of risk. Again the majority of buyers of luxury homes in Spain are cash buyers.

3) Interest rates: the euribor is at a record low level of 0.5%, which means that now would be a good time to take out a mortgage. However, the banks are applying ever higher differentials, a sign that they do not want to increase their property exposure any further. Again not a factor for cash buyers

4) Taxes and deductions: two factors which will push house prices down are the rise in VAT from 4% to 10% for new-build purchases and the end of home purchase tax deductions, which come into effect this year. However, falling house prices will offset the tax benefits which were available up until the end of 2012. So again not really an issue for would be high end buyers.

5) SOCIMIs and renting: the reform of Act 11/2009, which regulates SOCIMIs (listed real estate companies), has been approved with a view to incentivizing the house rental market. Furthermore, the government is currently pushing through a reform of the Lease Act, which shows that it is focusing on strengthening the rental market. According to Nick Stuart, the more rental housing available, the better for everyone and house prices will fall even further. Again this will have an effect but will be felt much more on the market below 600.000€

6) The stock of available housing: the more homes there are on the market, the lower house prices will fall. However, as Nick Stuart managing director of Spanish Hot Properties points out, the real estate market in Spain differs widely across local housing markets, and in some areas there is no stock of available housing, which means that this variable will be neutral with respect to house prices.

7) The creation of Sareb: the creation of Spain´s bad bank will not slow the downward trend in house prices, although it will not push them down either, in the opinion of the chief executive of a property valuation agency. In his view, the objective of Sareb will be the management and divestment of property assets, within a time frame of no more than 15 years. He added that Sareb will manage housing developments and land but will not sell homes to individuals. Instead, it will focus on institutional investors.  Again the reality is that very few desirable homes are repossessed in relation to the rest of the market.
8) Finally and most importantly it’s one word CONFIDENCE or currently the lack of it when that’s low coupled with bad international press for Spain then it’s always likely to dent house prices. However in relation to the luxury property market most people buying are very savvy and can see though these mirages or reasons not to buy.
So in conclusion property prices are likely to stay low for the a little while yet but we are already at the bottom for the luxury property market in Mallorca and Marbella

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Spanish Hot Properties
Marbella property

All Change at Spanish Hot Properties

SPANISH HOT PROPERTY LOGOlinked inSpanish Hot Properties has gone through some major restructuring over the last 6 months and we have changed from one site to 6 different sites but all under the name Spanish Hot Properties.

Each domain is designed to help buyers in their own languages and we now have the resources to look after those clients in their own language.

http://www.spanishhotproperties.co.uk/

The most obvious one but this website caters for our biggest market, the English speaking one and covers all English speaking clients but especially those from Ireland and the UK.

http://www.spanishhotproperties.es/

The major reason for the change as we are a Spanish registered company it makes sense that the local market know we exist and know we have exceptional products if they want that higher level of service that they just won’t get from a local Spanish agent. Also the international property market in Spain is only 6% of the whole market so it’s a very big market to have a slice of.

http://www.spanishhotproperties.ru/

Another big part of our business with Russian speaking staff on the ground our Russian website is one of the few that has been professionally translated to a level that all Russian speakers can understand.

http://www.spanishhotproperties.fr/

The French speaking site really covers Belgium, France, Switzerland and some African countries but the majority of clients are coming from Belgium and France.

http://www.spanishhotproperties.de/

This is where our old .com site redirects to and just deals with the German speaking buyers from Germany, Austria and Switzerland.

http://www.spanishhotproperties.no.com/

This site not only deals with clients from Norway but for the whole of Scandinavia as most people from Sweden, Denmark and Norway understand each other’s language. This is another big market for us.

So whatever European language you speak we have the site for you and with Swedish and Dutch sites due in 2013 we more or less have every major European language covered.

Hopefully Spanish Hot Properties will be able to help you no matter what nationality you are.

 

 

Serious Spanish Property Investors Making Money in the Recession

Spanish property

Spanish property

It might be hard to believe but it’s true that the decisive decision making property investors are making money whilst the part time investor still dreams of doing so!
This was recently illustrated by two amazing sales that recently took place a Villa in 400 M2 built in Puerto Banus area selling for an Incredible 600,000 Euros when it was worth well over 1 Million and a 3 Bedroom apartment in Bahia de Banus selling for just over 370,000 Euros when the cheapest other property in this prime location development is selling for over 600,000.

Both of these properties could now be sold by the investor who could expect to sell at a profit including the high selling and buying costs in Spain and still offer the new buyer a fantastic deal. For example if you bought the same unit in Bahia de Banus for 525,000 you would have still got a brilliant deal but the investor would have made 20% on his money inside 3 months.

Saying this some investors have different exit strategies some would make a quick exit and some would hold on to prime location assets expecting as much as 100% profit before costs taking a two to three year view.

So how do these investors manage to get these deals before other would be buyers? In reality it’s all about good business decisions, preparation and professionalism.
Firstly those good business decisions include finding a professional company to represent their interests and not trying to work with lots of agents. Professional people are able to locate the right business partner and put trust in them. Whereas a part time investor would probably register with 100s of agents because they would be frightened of missing out on a deal. The other reality is that some investors won’t even visit the property and will act on the advice of their agent they have decided to work with.

Secondly a serious decision making investor would have everything in place and ready to act so that when the right property or opportunity became available they were in a position to act before anyone else. This would involve having chosen a Lawyer and having the necessary funds in place to put down the required deposit immediately.

Lastly is the degree of professionalism when choosing the company to work with and doing their homework and understanding what they want to achieve and at what level below market value they are prepared to enter the market at. These investors after taking advice from their advisors will know when to act and in reality they do act.

Unfortunately the part time investor or buyer looking for an amazing deal doesn’t follow the same professional approach. The biggest mistake they make is to approach in excess of 10 agents which shows a complete lack of understanding of the property market in Costa del Sol. Also it’s pretty clear that an agent is going to look after clients that are exclusive to them before they look after the client who is working with several agents, that’s just normal good business practice. What this means is that the part time investor is always likely to get the crumbs from the dinner table.

If you would like to know more about serious property investment in Spain visit Spanish Hot Properties investor Club or call us today.

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property investment in Spain

http://www.spanishhotproperties.co.uk/

A Seed Change in Spain or Just a Sign of the Times?

Spain

Property in Spain

A recent survey carried out by ING International on the home-buying habits of countries reveals that Spaniards are no longer obsessed with buying their own home. According to the survey only 60% now believe that buying is better than renting, from a financial point of view, a figure which puts it behind many other countries such as Italy, the United Kingdom, France or even Germany, a country which has traditionally favored renting.  This obviously begs the question is this just due to the recession or will this be longer lasting?

The survey also showed that even though 71% of Europeans think that house prices are high, many of them still think that prices will continue to rise next year. Spaniards and Dutch are the only Europeans who do not follow this trend, as they believe that house prices will continue to fall in their countries in 2013. Only 10% of those interviewed in Spain think prices will go up next year, while over 50% firmly believe they will go down. That would obviously make the local Spanish people extremely perceptive as it’s pretty clear that bar prime location areas such as Mallorca and Marbella prices are unlikely to rise in 2013 but if they will fall further that is very much more of a debate and you will see a huge variances in the different regions of Spain

In line with this, 80% of Spaniards think that house prices in Spain are high, a figure which is only surpassed by Luxemburg, Italy and Austria. Again one would have to agree with them but Spain has particularly unique problems where the incomes of the local residents do not match the property values and local housing needs to fall further for these families and first time buyer to enter the market.

So as for it being a seed change or just a short term feeling until the Spanish property recessions is over, only time will tell

Why not contact visit http://www.spanishhotproperties.co.uk/ to find out more

ARTICLE RESOURSES

Spanish property recessions

TINSA

 

 

Your Complete Guide to Buying Property in Spain

Buy property in Spain safely with Spanish Hot Properties

Quite simply Spain has something for everyone and is the chosen second home or holiday home location for all of Northern Europe. Whilst UK citizens make up about half of all international Spanish property purchasers there are still plentiful buyers of Spanish property from Scandinavia, Finland, The Netherlands, Belgium, Germany and Russia (to name but a few) who are attracted to Spain for its year-round sun, stunning scenery, brilliant golf courses, excellent transport and, most importantly, the Spanish way of life. Increasingly, more people are looking to change their lives and lifestyle. Spain is becoming not only a holiday home destination, but somewhere to emigrate tofor the long term. With the fantastic flight and Airport infrastructure you can travel directly to almost anywhere in the world from Spain at competitive prices. So, a businessman based in Málaga could easily live there and still run a successful business in Northern Europe.

How do I reserve my dream property?

Once you have found your ideal property then you will need to place a reservation deposit which is currently 6000 Euros. Deposit payment can be made by credit card or bank transfer and will be held in your name. Wedon’t recommend that you carry cash in your pocket but do ensure that this sum is readily available as a delay could mean your dream becoming another person’s reality. Payment of this sum fixes the price, confirms your intention to buy and means that the property is taken off the market and reserved for you and will stop you getting gazumped.

How do I obtain a Mortgage and what costs are involved?

If required. It is important to select the mortgage that is right for you,taking into consideration your personal circumstances. It might be that you prefer to raise capital in your home country before arriving in Spain. Do let us know if you require a Spanish mortgage so that we can advise you prior to your departure to bring with you all the necessary documentation and receive the expert advice you need. If you require a mortgage and prefer to use a Spanish lender you will usually be able to borrow up to 70% of the value of your property repayable over 10 – 30 years depending on your age. Generally your repayments must not exceed 35% of your net monthly income or joint monthly income if two people are applying. Costs involved can amount to 3 – 4 per cent of the amount you are borrowing. Spanish Hot Properties would also recommend that you consult our approved mortgage broker prior to your visit so they can help you ascertain what options would be available to you.

Should I use a Spanish Lawyer?

Probably the most important step is to instruct a Lawyer. We recommend that you select someone with local knowledge who speaks your language. Spanish Hot Properties believes using a Spanish Lawyer is a must. Your lawyer will carry out numerous checks to ensure that your chosen property is indeed owned by the person selling it and that it has been marketed correctly. Your lawyer will also ensure that there are no undeclared debts owing on the property and that all service bills and taxes are paid up to date. Using a lawyer safeguards your investment and means that when you receive ownership of your property you will not inherit any outstanding debts.

What costs are involved in buying a property in Spain?
The purchase taxes vary depending on whether you buy a new build property or a resale:

New Build property:
• Stamp duty – 1.5% of the purchase price
• No transfer tax
• VAT, at 4% (reduced from 8% in 2012) Due to increase to 10% on 1 January 2013
Resale property
• No stamp duty
• Transfer tax – 8% of the first €400,000 and 9% on over €400.000 and 10% over €700,000.
• If buying with a mortgage besides the normal costs, it will also be necessary to pay stamp duty on the mortgage liability amount at 1.8%
Additional costs
• notary fees which may range from 300 – 1.000€ depending on the price of your property
• fees to register the property of about 60% of the notary charge.These amounts will will be around 10% to 11% of the purchase price.

What is my budget?
This is the most important question you should ask yourself before you begin your property search. Work out your budget and then deduct 10% buying costs from that budget. Now visit the home page of our website and go to our specialized property search and check out the various properties on offer. Alternatively you can contact us with your budget and somebody from the Spanish Hot Properties team will send you a selection of the best available properties for your budget.

What if I still can’t decide?

That’s one of the easier question to answer just contact Spanish Hot Properties and one or our dedicated team will only be too pleased to discuss your own situation in
detail and give you the correct advice to put you on track on for your Spanish property search. We will also be able to help you with any specific questions with regards to living in Spain and any other general questions that you may have.

We hope you have found this article helpful and below are some useful authority links if you want to investigate further.

Property in Spain

Buying property in Spain UK goverment advice

Spanish Hot Properties Now in Six Languages

We are really pleased to announce that we have completed the final part of Phase two of our complete website overhaul. Whilst most of the work on the website has been at the back office to accommodate local and international agents who are sending us more and more clients the front end has the addition of two very important languages Norweigan and French. This now brings the final total of languages up to 6 after English, Spanish, Russian and German
At Spanish Hot Properties we fully appreciate the changing and diverse Spanish property market and no longer can an International property agent rely just on UK clients. In 2008 60% of all International property purchases were bought by UK citizens but in 2011 that dropped to 18%. In Alicante Russians are now the number one buyers of Spanish property.
With the six languages at our disposal we now in reality cover all of Western Europe and most of east. For example most Danes and Swedes speak Norwegian and most of the eastern block has some understanding of Russian or German. This is important for vendors who know that they have every opportunity to sell their property if they put it up for sale with us.
Property buyers from Norway make up about 5% of the market but when you add Sweden and Denmark into the equation its closer to 12% so this will help enormously in increasing awareness and sales from this part of the world.
Property buyers in France and Belgium actually make up the second largest group of buyers behind that of the UK, However that is a little misleading as that would include a lot of sales in the Tarragona, Girona and Barcelona regions just over the French border. However most Belgium citizens who buy will be looking in Costa del Sol.
We hope that all our new visitors from France and Norway appreciate our site and service standards just like our other visitors. For more information about Spanish Hot Properties just call us or fill in a contact form on the site.

France

Norway

A Spanish Hot Properties Testimonial October 2012

Marbella

Marbella Property in 2012

Below is an email we received from a happy client

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Hi Nick
I hope you had a wonderful trip to Paris.  As you will be aware the deal completed so we now own 32.1.8 Los Lagos De Santa Maria Golf, Elviria.  Your help was much appreciated, and your expertise and knowledge of the market and area is first rate.  Thank you too for fulfilling my need for a good outside space, the terrace was spectacular last week in pefect weather conditions and the terrace size really makes the property.  You were right about the sea views.
Also Maria Rubino did a very good job on the legal side, thorough, good communication, and willing – thank you for introducing Maria to us we will be using her in the future as and when we have any legal requirement.
 Phil, Nicky’s husband has been booked to do some work for us.  The furniture is all ordered.  A keyholder has been appointed.  So all in all things are moving forward.
I hope they give you a good commission as you certainly earnt it.  I look forward to the gift back towards our inspection trip expenses which will be going towards the building and aircon costs.
If things progress well and we avoid too much “manana” then I hope we can invite you for a mojito on the terrace at Xmas.
Thank you for your help Nick.
Kind Regards
Celia

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Being an International real estate agent in Spain can sometimes be a thankless task but its moments and emails like this that make it all worthwhile and why I set up the business in the first place which was to help people buy safely and securely in Spain and also make a living at the same time. So Just like in the move Jerry McGuire its very nice when we have an agent to client relationship that others agent will very rarely have.

Our feelings about Celia and her husband David is just positive wonderful clients who we were really happy to help.

Just looking forward to our mojitos at Christmas now.

Buy property in Spain

Spanish property for sale

IBI Spanish Property Tax Rise, How will it Effect You?

 

Mallorca Luxury Villas

Villas in Spain

IBI the property tax in Spanish is an annual tax on property that the owners of any type of property, whether it be residential properties, garages, business premises etc, are obliged to pay, and constitutes one of the main sources of revenue for town councils. For this reason many town councils have already announced that that they are going to increase property tax in order to increase revenues. However, since many taxpayers still find it difficult to understand how the tax is calculated so we will try and answer the major issues concerning the tax. this is just one of the very few examples why the Spanish property market is so complex

At this time of the year the dreaded property tax notice is being sent to millions of property owners. This is a tax that is almost universally disliked by taxpayers, and a tax that virtually no-one understands.

Who has to pay property tax?

Almost all property owners are obliged to pay this tax, although there are some exceptions as, by law, some types of real estate are exempt. One of the best-known exemptions is property that belongs to the Catholic Church, a topic that has been the subject of hot debate in the media recently. However, church property is not the only kind of property that is exempt, as there are other property owners who do not have to pay this tax. These include:

– Property owned by the state, the regions, or local entities which is directly related to public safety or educational services (police stations, prisons, and schools).
– State-owned property dedicated to national defence.
– Property owned by the Red Cross.
– The diplomatic offices of other countries.
– Registered heritage buildings of historical importance.
– Old buildings in big cities or buildings owned by legally recognised non-catholic religious associations.

How is the property tax calculated?

The town council of each municipality establishes, within certain limits, how much tax has to be paid for all the properties in the municipality. In the case of urban properties, this is done by taking the assed value – a value which reflects the value of the land and also the building on it -and applying a coefficient that ranges from between 0.4% to 1.3% to it. For example, the tax due on a residential property in the capital city of Madrid (where the tax rate is 0.581% for 2012) with an assessed (not real) value of 79.215 euros is 460 euros.
You can find out what the assessed value of a home is by asking at the Cadastre. It also appears in the property tax notice sent to all property owners each year.

The property tax can differ widely across municipalities, depending on whether a property is located in the capital of a province, used for the provision of public services by the council etc.

How the assessed value of a residential property is determined

The assessed value, to which the town council applies the percentage established, is calculated by the Cadastre in accordance with a set of criteria. The most important of these include:

– the location of a property
– the market value of each property
– the cost of the labour and material used to build a property
– the taxes that the building is liable to, and the quality
– the age of the building, among others

The resulting value is significantly lower than the property’s market price, usually about half the market price. Every 10 years town councils have to review the assessed values of all the properties in their municipality. The values are usually revised upwards, which means that the amount of tax to be paid increases.

Are there any discounts applied to the payment of this tax?

There are several general discounts which can be applied to the property tax, such as a discount for state-subsidised housing (VPO) – which has a 50% reduction for the first three years – or for the agricultural assets of agricultural cooperatives – which are entitled to a 95% discount.

In addition, each town council can establish additional discounts in its municipal regulations, as Madrid Town Hall has done for large families.

Some town councils also offer a discount to taxpayers who pay the property tax by direct debit through their bank. An example of this is Madrid Town Hall, which offers taxpayers who pay by direct debit a 5% discount on the amount to be paid. In the case of Barcelona, taxpayers who pay in this way will save 2%.

Property tax increases: Why?

Every 10 years town councils have to review the assessed value of the properties in their municipality. It is estimated that a total of 4.2 million properties will be subject to an assessed value review in 2012, and that as a result millions of property owners will have to pay a higher property tax.

In order to soften the effects of this increase, after the assessed values have been reviewed some town councils, such as Madrid, apply a reduction coefficient to the new assessed values. This reduction coefficient is reduced each year, and as a result the amount of tax to be paid increases every year. Thanks to this system, the “impact” of the tax is not so punitive. Instead the amount to be paid steadily increases over the ten years following the review.

What is more, it is also necessary to take into account a change in the law which will result in many property owners having to pay more tax. At the end of last year the government of Mariano Rajoy announced that, as a temporary measure, the tax rate for property tax would be raised during 2012 and 2013 in order to help town councils collect more revenue , around 918 million additional euros. This change allows municipalities that have not carried out a review of assessed values since 2006 to increase the tax due for properties with a higher value by up to 10%, depending on the year in which the council last reviewed assessed values.

It must be remembered that many town councils have not reviewed the assessed values of the properties in their municipality in over a decade, despite the fact that ten years is the recommended assessment period. In fact, of the 7,591 municipalities that exist in Spain, almost half have not updated land values in 18 years, which means that they can now charge 10% more, thanks to this new government measure. This increase will be followed by another, much more dramatic, tax hike which will take place when town councils finally review the values of the properties in their municipality. By that time the assessed values will have risen so much since the last review that the amount of tax to be paid by residents will increase significantly.

When a property is sold does the buyer or purchaser pay the property tax?

The property tax for each year should be paid by the person who is the owner of the property on 1 January. If, during the year, a property is sold, the tax due should be paid by the person who owned the property on the first day of the year.

If the property is rented, should the tenant or the landlord pay the tax?

The town council will send the notice of payment to the homeowner, but they can get the tenant to pay the tax if this has been established in the terms of the rental agreement.

So if your looking to buy a villa for sale in Spain we hope this information will be useful to  you.

ARTCLE RESOURCES

Spanish property market

villa for sale in Spain

Spanish Golf Property for Sale in Spain Market Review August 2012

If you have been looking to take advantage of Spanish golf property for sale in the present Spanish property crisis you might be interested to know where some of the best value is to be had and what represents the best value from an investment point of view.
Like most overseas property purchases the major criteria should be are you buying for Lifestyle or are you buying for Investment. Most people say both but in reality it’s not always possible to marry the two.  Other factors to consider is what finance do you require if any and most importantly is this a holiday home or are you planning to live part of full time here in Spain.
Taking these factors into consideration we have reviewed 3 of the very best Golf Properties in Spain and hopefully this will help you to understand what options are best for you.
LA CALA GOLF RESORT
Simply the biggest and best golf resort in Spain this resort has everything you could possibly want with the best value properties in the market today some with some 40% discount.  However the major benefit of this resort is it’s quite simply offers the best investment opportunity because it’s a fully-fledged resort with every facility you could possibly want.  So the holiday rental income possibilities are huge with most properties generating in excess of 20,000€ Euros a year and as not all the owners let their properties out there is always great demand for holiday rentals on this development. The drawbacks are that the location is in Mijas Costa and not Marbella district. However that shouldn’t concern you as most of the best Golf resorts are not in Marbella. The other drawback is that there is no finance options available and the most you will be able to borrow is 60-70% of the purchase price.
LOS CAPANES DEL GOLF
Situated in Benahavis only 10 minutes’ drive to Puerto Banus and Marbella this beautiful development offers huge discounts of up to 45%. This development offers excellent facilities and good community fees and gives a good balance between lifestyle choice and Investment. For those looking for both this is probably your best choice. Here you will have huge beautiful homes and the possibility of good holiday rental income.
LOS FLAMINGOS GOLF RESORT
Simply the best golf resort in Costa del Sol with stunning properties with stunning views however this has to be a lifestyle choice because it has the highest community fees of the 3 resorts reviewed. However the if you’re looking for lifestyle this is your best choice because views and beach location close by cannot be rivaled.
If you would like more information on these golf resorts just click on the resort name above and the link will take you to the information on each golf resort. Alternatively please just call or email us and we would be happy to give you any additional information you may require.

 

Spanish golf property for sale