Gecko Towers 20.10.20
Headlines like this are devised to be what is described as a combination of so-called “clickbait” and a “conversation starter”. For those who have a passing interest in the prospect of purchasing a property on the Costa del Sol, to be enjoyed short, medium and long term, pre and post Brexit this may well be manna from heaven.
Whether you are looking for a primary home, purchased in celebration of some personal milestone, that may include being part of a duo that are now “Empty Nesters” who have chosen to downsize a UK family property to spread their interests to include a smaller UK property and an overseas property. In the process you satisfy a number of ambitions as the prospect of retirement looms.
You may be looking for a second home – or even a third if you count that small alpine studio-flat purchased in the late 1980’s that has given countless members of your family wonderful skiing holidays – and equally known as a “bolt hole”.
Whatever, it will become your refuge miles/kilometers away for the machinations of Northern European socio-economic crises, lurching from one to another, that every now and then simply get too much and you just need to escape.
The respected Costa del Sol newspaper, The Olive Press, last week carried a report from a Professor Gonzalo Bernardos of Barcelona University and a property group called “FORCADELL” that “over the next year” Costa del Sol (and Costa Blanca) property prices would fall by as much as 20%. On the bright side they couched this headline with an upside that they saw the Spanish economy recovering in 2021 and property prices resuming their recent rises in 2022.
The dire warnings were reserved for the commercial property sector that includes retail properties and hotels. According to the report they would be hardest hit by around one third of premises closing and rents being stricken by falls of up to 50%. Very concerning if you have invested heavily in recent years in Spanish retail commercial centres or their “high street” equivalents.
While I make no observations about the quality of the good Prof’s Report, this kind of news items does inevitably generate what may be described as “expectation fallout”.
If you are a Premier League goalkeeper who has had a run of poor judgement or plain bad luck, screaming headlines in the Nation’s red-top newspapers, if you chose to read them, will, I suggest, have some compounding impact. Your already fragile state may be further exacerbated by the continued retelling of your errors such that your decline in confidence begets further poor performances.
Well, it’s the same in the property market where sentiment and confidence sit side by side.
If you are told that the property you looked at last week may “over the next year” decline in price by as much as 20% you are unlikely to commit today to a purchase. Conversely, if you haven’t started looking yet for your preferred property in the right location, you may well hold off starting that search until it is clear that the 20% decline in prices has indeed commenced.
Alternatively, if you have a toe in the water and have been watching the market for the last few years/months and have already identified a handful of properties that appeal to you – and which are still for sale – you may chance your arm with a “cheeky offer”. Scaled at say 20% below the current asking price, “Its got to be worth it!”. Armed with the intelligence of the Prof’s Report you are confident that the seller – who has already told you that they are motivated to sell – may cut their losses and accept that they should sell to you now as opposed to sitting out the next six to nine months and then selling at a 20% lower price!
The happy coincidence of sentiment and confidence can only be ruined by the specter of confusion. The price expectations of seller’s may not crumble, the market may not perform as predicted and we may all be sitting here in a year’s time – God willing – with a copy of the Prof’s Report in one hand wondering why it didn’t pan out as predicted.
Well, my friends that’s the gamble…. there are very few certainties in the property market. While a purchase based on statistical and data driven analysis may in some circumstances win through the old adage of a property being worth what someone is prepared to pay for it may be truer today than ever.
Hold off or commit, the choice is reasonably clear, but if you find your perfectly located, proportioned and/or configured property let the head and heart go into battle and let’s see who wins…..
Should you be interested in discussing the legal process involved in buying a property in the Marbella region, we would be delighted to assist you. Our team of bi-lingual, highly experienced and wholly independent team of Abogados are ready to help you.
Please call me, Mark FR Wilkins, during usual business hours on +34 600 343 917 or, if you prefer, please e-mail me at mark@roslegal.es
Please note that our posts are for general interest. They are no substitute for proper legal advice tailored to your specific circumstances as provided by a qualified Abogado who is experienced in the application of the Spanish Law.
© Mark FR Wilkins 2020 All rights reserved.