Truth about Property Prices in Spain

Property prices in Javea and surrounding Costa Blanca peaked in 2003, stabilised during the years 2004 – 2006 and began a gradual decline during 2007.

Unfortunately, Spain is one of the first countries to receive negative foreign press reports and due to the great variety of different nationalities that reside here, we seem to get hit from all sides.

At the beginning of 2008, one of the major factors contributing to the decline of property sales in Spain, was the weakening exchange rate between the British Pound and the Euro. Putting plans of thousands of Brits that were thinking of moving or buying in Spain on hold.

As months pass, most people have become accustomed (all be it begrudgingly) to the new exchange rate and have bitten the bullet and are buying Javea property for a lower budget (in euros) than previously planned. Or were lucky enough to find property reduced in price.

Continuing through 2008, in Javea and surrounding towns we have seen property prices drop by 15 – 20% since the inflated prices of 2004 – 2007 AND we have entered into the era of the CREDIT CRUNCH, due to higher interest rates, reluctance of the banks to issue new mortgages as well as the general state of the world's financial markets.

However around Javea, is not all doom and gloom. Spanish banks are continuing to issue mortgages, though they have now implemented more stringent terms and conditions – which with hindsight, they should have done years ago. They are lending a lower percentage of the property valuation price than they have done in previous years. A non-resident of Spain can easily take out a mortgage for up to 60% of the valuation, sometimes a higher amount is given depending on income and other factors.

Also, another bonus for present day buyers, is that not only are property prices coming down to more reasonable figures but UK sellers wishing to re-locate back to good ol’ blighty can afford to take substantially reduced offers or have reduced the selling price of the property in Euros, by considerable amounts,as they will still make the same amount of money with the exchange to Sterling!