Desperate Measures Adopted By Spain To Ease Desperate Times
News Posted On: 20 August 2013
The real estate market in Spain has been facing troubled times over the past few years. Following the recession in 2008, overbuilding has turned out to be one of the major problems in the country. With hundreds of thousands of properties still unsold, the government in Spain is working hard to revive investor confidence so as to attract foreign investors to its beautiful beaches and coasts.
When the Spanish property market was booming, several investors from different European countries purchased retirement and holiday homes on the coasts of Spain to fulfil their age-old dreams of acquiring a property in the sun. Since demand was always high, developers and builders were inspired to construct more houses. Although the construction industry played an important role in fuelling Spain’s economic boom, the burst of the real estate bubble over five years ago brought the economy crashing down.
In addition to the collapse of the real estate market, Spain’s hopes of offloading properties took a further blow as reports surrounding dodgy lawyers, corrupt planners, and unscrupulous developers emerged. People who had purchased properties in the Iberian nation were soon regretting their decision as they did not get what they had been promised. Developers would attract investors by advertising swimming pools, golf courses, and other amenities which never materialized in the construction of the development. As a result, a large number of buyers have since sold their properties and left the market in need of buyers.
Huge Discounts Offered to Attract Investors
At the moment, there are around a million new homes that have not found a buyer yet. The domestic market in the country remains weak, effectively ruling out local investment in unsold properties. Many real estate agencies are now offering properties as cut-price bargains in an attempt to attract investors back to the sunny nation.
Properties that are worth over 300,000 Euros in Almeria are currently being offered by real estate agencies for nearly half their original price. Luxury apartments on the Costa del Sol can be purchased for around 170,000 Euros. It is interesting to note that the same apartments were priced at around 950,000 Euros during the market’s peak in 2008, signalling an 85 per cent discount on absolutely magnificent real estate assets.
Many financial institutions in Spain, including SAREB (the Company for the Management of Assets proceeding from Restructuring of the Banking System), have had to reduce prices in an attempt to get rid of the properties and raise some much-needed funds for the economy. Real estate analysts in the country say that Spain continues to struggle when compared with other European nations.
However, people who choose to purchase property in Spain can be exposed to more benefits than those who invest in other countries. A large number of banks in Spain are offering great deals along with the sales of homes and apartments. The nation does have a long way to go before it can recover from the real estate mess, but a decline in property prices and an increase in financing options are sure to help its cause.
Written by Les Calvert
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