From Write about Property
Spanish Repossession Properties - A Fool-Proof Investment?
Anyone who knows me and my views on overseas property investment
, will know that I am not the biggest fan of Spanish property for investment, and I would not normally recommend it. However, the current international downturn, or rather the effect that is has had and caused on the Spanish property and housing markets, have led to an abundance of repossessed properties on the Spanish market.
These are a sound investment. Most of the repossessed properties in Spain I have seen are priced at 50% less than their market value. This gives you 50% instant-equity, in theory, the only question you have to ask then, is will it ever regain its market value.
In my view the answer to that question is yes.
Currently Spanish properties are plummeting in value at an alarming rate, in the main because of the chronic over-supply caused by the mass-exodus of foreign buyers, and because of the state of the Spanish economy; in its worse recession for decades and unemployment spiralling out of control.
Yet Spanish property remains the most popular with British buyers, according to figures revealed by Primelocation last month, and from Property Abroad.com consistently in the last few months. Thus, when things start to recover the numbers of overseas people searching for and buying property in Spain will obviously grow rapidly. At the same time the Spanish economy recovering will once again drive up demand in the internal housing market.
Therefore at this time property values will start to grow again, and the properties will regain their market value in a reasonable time-frame, at which point you will have made a 50% return, less costs, but plus any rental income you have made during ownership. Not a bad old return. |