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Country property market in Andalusia has bottomed out

2013 has almost come to an end. We hope you can relax to focus on what 2014 will bring and should bring! For sure we wish for good health, less turbulence in the worldwide politics, reasonable and more flexible laws regarding the housing market in Andalusia and last but not least an improved bank system so more people can afford to live their dream in beautiful Andalusia.

country property Gaucin

For Villas & Fincas 2013 was a turbulent year. We launched a new website through which we hope to have improved the visual presentation of our properties. Our new ‘toy’, the drone, adds to this as well with spectacular aerial photos and videos. The website is now always present on the first pages of the search engines in English, Spanish Dutch and German. The continuous increase in web visitors has resulted in more viewings and in more sales. We feel lucky to be able to show our clients around and to share the joy and beauty of living in Andalusia. And we feel proud to present to them the best properties in the areas of Cordoba, Seville, Cadiz, Ronda and not to forget our stunning home base Casares and Gaucin.

Many clients bought their new country property in 2013 and we assisted them in finding architects, builders, gardeners and cleaners to help convert these houses into their homes. Every single sale has therefore lead to a mini impulse on the local economy as well!

Spanish Real Estate market developments

Everybody is asking whether the market has bottomed out. In a way it has, yet certain aspects have to be taken into account.
The average Spanish house price increased by 0.7pc between June and September, according to the official House Price Index, published by the National Institute of Statistics, based on figures from the General Council of Notaries. This was the first quarterly increase in three years. However the Q3 house price index published by the Housing Department (Min. Fomento) was down 0.5pc on a quarterly basis, so it all depends where you are looking for numbers.

Another interesting development is that large investors from Russia and China as well as Goldman Sachs, Blackstone, Bill Gates, Pimco and George Soros currently invested in, or are looking at investing in Spanish real estate. The Deutsche Bank commented in their latest report; “if Spanish property prices continue to fall at their present rate they could bottom out in 2014”. Sareb, the so-called ‘bad bank’ in Spain, is stating that the amount of foreign investors can finally break the downwards spiral in 2014. In some areas like Barcelona and Madrid the prices are already on the turn up. Mr. Alfonso Galobart, head of CBRE, CB Richard Ellis, confirms this in El Mundo, “The arrival of big investors buying large portfolios show that the Spanish property market has touched bottom and now is the moment to invest.”

The Andalusian property market

The Andalusian property market showed still negative figures for the last two quarters, but that should stabilize as well. The first sign of stabilization is seen in the recovery in the top-segment of luxury and quality real estate in favored areas as Malaga, Seville and Marbella. Sotogrande seems to resurrect from a deep sleep, and we ourselves can confirm that the high-end luxury country property market is back. Quality sells! For example, in Casares, the quality villas with spectacular sea views are sold. In Gaucin, a market with large exclusive country estates priced over a million, we sold some top villas. Key factor for sale was again quality and value for money! In the rest of Andalusia we see an increased interest in well maintained property with special features and a reasonable asking price, adjusted to the current market situation. Speculation is out of the question!
We also notice more inquiries on Hunting Estates, large Haciendas and properties with vineyards or olive groves. There is definitely more interest in property with some kind of revenue of production. Clients are coming mainly from northern Europe, Scandinavia, and more and more from South America. Although Spanish Banks seems to be interested to get back into the mortgage business almost all of our sales in 2013 came from cash buyers.

So it seems that the property watchers are right claiming that the high end market has stabilized and is even on the run up again in some areas. The middle and low end market however will probably see some further decline in 2014 due to the excess of supply.

Outlook for 2014

The general outlook for 2014 is positive; Low interest rates, affordable mortgages and low property prices create a healthy cocktail creating demand for country properties. In this segment we do not suffer from the excess of supply. There is still a building stop on rustic land in Andalusia, and this will not change! On the contrary, the laws are getting more and more restrictive. So what you see is what you get. In some cases purchasers even have to act quickly to purchase their dream house. We have proven that the right property on the right location for the right price sells within 3 months! If you have decided to make a lifestyle change, or if you would like to invest in a country property, it seems the right time to do so. We hope to welcome you soon.

Have a wonderful Christmas and a healthy and prosperous New Year!

Oscar and Anita
Villas & Fincas

Oscar Ernstsen 19-12-2013 Villas & Fincas News