Sunday, 29 March 2009

The right time to invest in Marbella Property

Xavier Sala i Martin, professor of Economy at the University of Columbia, estimates that 10% of Spanish GNP, will be the ´big hole´ that Banks of this country will have to absorb, due to the arriving ´storm´ of unpaid loans.

Indeed, Spain has been depended of the building activity for as much as 19% of its GNP, whereas other countries such as Germany showed a dependency of this sector of only 4%.

Xavier Sala i Martin also stressed that Builders and Real Estate Companies, have a debt with Banks of € 300.000 Million, or 27% of Spanish GNP.

If we add to this situation, the fact that 1 million unemployed people as a result of the construction crisis, will soon loose their unemployment benefits and will therefore, not be in a position to repay their loans, the picture will become even worse.

In 2008 the Property Purchase and Sale activity decreased in Spain with more than 28% and this descent will continue during 2009.

All in all property prices will continue to fall and it is now the right time to buy a second residence under the sun.

Banks and distressed sellers will have no other choice than to lower down the asking prices to get rid of a stock of more than 1 million unsold properties in Spain.

The Spanish Coastal Areas have suffered the strongest decrease in property prices in 2008, registering price reductions of up to 25% in market value, in locations such as Denia, Benidorm and Torrevieja in Alicante or Estepona and Benalmádena in Málaga province.

Although construction activity increased slightly with over 1% during the month of January in 2009 (after the debacle during the year 2008, which saw the activity getting a hit of 41,5% less properties built), it is most likely that the sector will not start recovering until 2012 or beyond.

At Olivar Estates, we are now in a position to offer property in Marbella at prices up to 40% under their current market value and this in luxury developments on key locations.

We believe, that 2009, is the right year to invest in quality and location in Marbella.

No comments:

Post a comment