British purchasers increase by eight per cent on last year

By David Eade

The British sector accounts for the highest number of all properties purchased on the Costa, an increase of eight per cent on last year , with the spanish market now moving on to occupy second place.

Britons lead the purchasing table for this year having snapped 35 per cent of the properties sold, which represents an important rise in their buying potential. Spaniards are now the second most important purchasers having bought 31 per cent of the properties, a rise of six per cent.
The German market comes in third with 22 per cent of the residential tourism property purchases. However this figure shows a downturn of 12 per cent on last year due to the economical crisis suffered in Germany over the past four years, which has had its effect on properties bought abroad
The Germans are followed by Scandinavians who account for just six per cent of the market, up three per cent on last year. The French purchased four per cent and the Dutch two per cent.

Second homes still strong
Second homes account for 34 per cent of all property sales on the Costa del Sol, which represents around 30,000 dwellings. The value of these sales was 2,720 million euros. Despite the downturn in Germany, the Costa property sector has still managed to show a growth of 16 per cent thanks to Britons and Spaniards.

Cheaper holidays for Britons
Good news is in store for British tourists wishing to holiday in Spain next year. Market research company A C Nielsen forecasts average prices with First Choice to be down £10 on last year. Thomas Cook is showing a drop of £39, and TUI £16, but the biggest savings can be had with tour operator MyTravel with reductions of £66.

 

Soaring housing prices -no end in sight

Experts expect 15 per cent increase in 2003
By Oliver McIntyre

After the dramatic 20 per cent increases in housing costs seen in the province of Malaga during 2002, it looks like property market is set to follow a similar trend in 2003.

Experts in the real estate field predict prices to increase an additional 15 per cent in 2003, as the trend of purchasing real estate as an investment continues. The prediction of further price increases is based on the number of available housing units, the number of new units being built, and the rising costs of construction. According to analysts of the real estate market, outside factors could alter the rising trajectory of prices. For example, if the stock market rebounds and becomes more attractive to investors, fewer people may decide to put their money in real estate investments, thus reducing demand and lowering prices.
However, if trends continue as they are at present, construction costs, scarcity of available land for new construction, and a variety of new real-estate-related taxes and regulations are all expected to contribute to a continued increase in prices.

Torremolinos takes the lead
In 2002, the largest housing price increases in the country were seen in Torremolinos, according to a study by the Valuation Society (Sociedad de Tasación). Last year the average price-per-square-metre of a home in Torremolinos increased by nearly 32 per cent, to 1,049 euros.
Nonetheless, Marbella continues to be the most expensive real estate market on the Costa del Sol, with an average per-square-metre price of 1,338 euros.

 

Málaga properties cost 23 per cent more than last year

By Cathy Humphreys and Eve Gallagher

The price of property has risen dramatically over the last 12 months, in spite of predictions that the construction market would soon start to slow down.
The rapidly increasing prices of property throughout the whole of Spain have caused alarm in various sectors and many experts now fear that the situation will result in a negative knock-on effect for both consumers and the industry in general. Málaga City has seen an increase of 23 per cent in property prices over the last year, although areas like Teatinos has had a much higher rise. Elsewhere in the province an increase of 20 per cent has also been felt and again areas such as Marbella have seen the figure triplicate. Although the largest rise has been seen in re-sale homes, the price of new property has also risen throughout the country, by an average 14.2 per cent. Official government figures show that it now costs an average 72 per cent more to buy a property than it did four years ago, before the construction boom took off in 1998.
As an example, a 90 square metre property in Málaga Province that cost 7,650,000 pesetas in 1998 was valued in June this year at 97,830 Euros, or approximately 16 million pesetas. Experts in the Government and at the Banco de España have blamed the disproportionate increase on varying factors. These include:
· Higher wages in general
· The market demand for property
· The increasing practice of buying property as an investment
· Competitive mortgage interest rates
In a recent study, the Banco de España found that between 1995 and 1999, 82 per cent more properties were built than were occupied as family homes, revealing that more people were buying property to either rent out, use as a holiday home or keep for re-sale at a later date. This figure shot up to 152 per cent between 2000 and 2001. In part, this could be attributed to people trying to get rid of 'black' money before the Euro was introduced.

Getting out of control
The Government has expressed fears that if the situation does not stabilise in the near future it could create a serious "social problem" which would result in a plummeting market and crisis in the construction industry. But many experts believe the property boom will continue, at least for the next 12 months, particularly on the Costas where more and more ex-pats from other European countries are deciding to settle.
A recent report predicts that prices will continue to rise by about 15 per cent during what's left of this year, slowing down to around 12 per cent by the end of 2003. Experts say that the construction industry will then be likely to experience a drop in the market. A reduction in mortgage rates means that more people are now buying property in preference to renting. The official 'Mibor' rate from the Banco de España now stands at its lowest ever - 3.24 per cent - while the average bank rate is 6.6 per cent and that of savings banks is 4.9 per cent.

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