How Bad is the Market?

03/07/2008

The constant refrain is, “How bad is the market?” Well, it all depends on which side of the fence from which you are looking. If you have an anonymous two bed apartment, within a large development that has no particular location advantage of being close to sea, golf or established urban area, then being the cheapest on the market is the only way that you can make your property stand out from the crowd and at least get somebody to view it. On the other side, if you have an attractive, well maintained property in a popular urbanisation that has got locational advantage, then there will still be people coming knocking on your door. Thus the diversity of value is, if anything, increased. Much of the statistics we read relate to Spain as a whole and it must be remembered that we are in a special situation on the Costas. Madrid, Zaragossa and even more so the 'run-of-the-mill' towns and cities within Spain, depend principally upon the local Spanish economy. Whilst we feel that the coast has been overdeveloped, at least we have special locational advantage for some addresses. If you are in the middle of Spain, a sea view is highly unlikely and golf courses are few and far between! They are being hit particularly hard and thus driving down the statistics.

The Costas also have the benefit of a much wider market, being the whole of Spain plus Northern and Eastern Europe. It is tending to be the middle-market buyers who are being prudent and are saving their money in case of poorer times ahead. Those with a substantial bonus are still looking for places to invest with the opportunity of being able to enjoy that investment. Right now, because of the ability to negotiate prices down, larger properties in Spain are beginning to look attractive. At the other end of the market, there is always a demand for a cheap place in the sun, but it is not going to cost a group of friends or family too much if shared between them. So, the buying parameters are as follows.

The best you can afford in an outstanding, fashionable location and with beach, golf or urban services advantages
OR the smaller bottom of the market property, but still with these advantages

In conversations, the potential troubles for beachside properties continue to arise. In the longer term, these take the form of possibly rising water levels. A recent documentary relating to London showed some of the havoc that could occur. The other, (un)clear and present danger, is their compliance within the Ley de Costas. Very basically, this states that the entire foreshore around the coasts of Spain is public property and any private property within 106 m of the high tide mark that restricts the public's access is illegal. The original Act dates from the late 1980s and within it there was a dispensation for existing properties. The end of that dispensation period is coming closer and thus the political decision as to what to do when it runs out is beginning to loom large. There are thousands, perhaps of tens of thousands of properties affected to a greater or lesser extent. Some of them are gross abusers of the situation and, like the hotel on the front at Estepona, should be removed. Others, however, such as many of the Chiriguitos and beachfront terrace restaurants, are a positive asset and essential to the success of Spain's coastal tourist industry.

However, coming back once again to values, one must take account of the potential risks of non-compliance, at best of fines and perhaps even demolition. Interestingly, the latest software edition of Google Earth has a feature where one can show the progression of rising water on the coastline. Unfortunately, it is not sufficiently detailed to show which individual property is most likely to be affected, but if looking on the beachfront it would be prudent to take a tape measure for 106 m and to choose the higher of any two locations.

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