Costa del Sol Real Estate
Past performance of the Costa del Sol property market and outlook for the
future
Of course we’re all wishing now that we’d
snapped up some prime Costa del Sol real estate back in the early 1970s and
sold it in the boom years of the late 80s.
That was the costa’s crazy hey day when all but the most naïve
investors were raking in enviable profits from their property portfolios.
Villas and apartments either on or near the most popular coastal strips were
doubling in value in less than five years and get rich quick investors were
ploughing their profits into the burgeoning number of off-plan property schemes
springing up along the southern coast of Spain.
The 70s and 80s were the honeymoon period both for the big developer and
the small investor looking for a lucrative lair for their nest egg. But as
with all honeymoons, it had to come to an end. The ludicrous property price
increases of the 1980s began to slow down in the 90s, followed by a feverish
rush to snap up Spanish property in the lead-up to the introduction of the
Euro in January 2002. At that time it was estimated that billions of pounds
worth of black money was hidden under Europe’s metaphorical mattresses
and one of the best ways to get rid of it before the tax man pounced was
to invest it in Spanish real estate.
The Costa del Sol - Bust or boom?
Costa del
Sol property still
seemed one of the world’s safest and
best investment opportunities in the early part of the 21st century
but financial analysts were issuing gloomy predictions of a massive
crash. The bubble was about to burst, they warned, and the effects
would be most devastating in those areas – such as the Costa del Sol – where
house prices had risen too high too quickly.
So were they right? Well, it’s been more a case of the balloon slowly
sagging rather than bursting. Certainly the Costa
del Sol property market has seen a price slow down since 2004. Some owners have been dismayed by
an alarming decrease in the value of their properties but in the main prices
have stabilised rather than crashed.
This slow down was inevitable due to a number of factors. The town halls,
landowners and developers got too greedy. Construction was allowed to continue
unchecked for too long, would-be investors were unnerved by the dire “bursting
bubble” forecast and new markets were opening up in eastern Europe
offering cheap holiday homes at prices not seen in Spain since the 1970s.
The Costa del Sol vs other european hotspots
For the first time, Spain was facing serious competition – both in
terms of being a cheap European holiday destination and as a prime
investment opportunity for those looking to buy a rental or second home.
Previously unchallenged tourist centres, such as those along the Costa
del Sol, had to wake up to the fact that countries like Bulgaria, Turkey and
Croatia were offering holidaymakers and homeowners better value for money.
The clouds have certainly been gathering over the Costa
del Sol’s
golden investment ground but there are still profits to be made in southern
Spain for those who look before they leap and don’t expect the instant
rewards of the late 20th century boom years.
In fact it’s a good time to buy on the Costa del Sol as long as you
can wait a while for a good return on your investment. The bottom
end of the market is faring particularly badly because of a glut of ugly
urbanisations where developers are struggling to sell cheek-by-jowl properties
at prices which foreign buyers are no longer prepared to pay.
But there are still plenty of areas where property prices are continuing
to rise steadily at an annual rate of around 10-12%. And many market analysts
believe that some of the up and coming unspoilt areas, such as the Costa
de la Luz and Almeria, present excellent opportunities for the long term
investor.
There’s no doubting that Spain has to pull its socks up as a leading
holiday destination but northern Europeans will always want to come to the
Costa del Sol with its year-round sun, excellent transport links and unrivalled
leisure facilities.
There’s still good money to be made for the cautious investor who
chooses the right kind of property in the right location. If you sign up
to an off plan property without even visiting the area or researching local
housing market performance – well, you’ll probably get what you
deserve!
Available area guides to Costa del Sol
Benalmadena | Calahonda | Estepona | Fuengirola | Malaga | Marbella | Mijas-Costa | Mijas
Pueblo | Puerto
Banus | Sabinillas | San
Pedro de Alcantara | Torremolinos
Investing in the Costa del Sol articles
Investing in Property
on the Costa del Sol – an Overview
Past performance
of the Costa del Sol property market and outlook for the future
Spanish
property investing guides
Guide to buying property to let
in Spain
Investment property in Spain – what to buy?
Finding a lawyer in Spain
Arranging a mortgage in Spain
Where to buy Spanish property
Marketing your vacation rental in Spain
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