Costa del Sol Property Guide - Issue 1773

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A resurgent market OUSING on the Costa del Sol is synonymous with a resurgent market, new construction and luxury.

Both the city of Malaga and the coast have experienced a continuous and growing demand for housing since 2015.

The impulse given by foreign tourists, who are looking to spend longer and longer periods in Spain, and the boom of tourist apartments as a short and medium term investment, have contributed greatly.

This demand has in turn resulted in steady price growth across the region, although experts say we are not approaching the excessive levels seen before the financial crisis.

There are still opportunities to be had, but they are getting thinner on the ground as surplus stock is absorbed. Prices remain around 20-30 per cent below peak, so now is still seen as a good time to buy, with steady capital growth anticipated in the coming years.

Demand in the new build sector carries on strengthening, as can be witnessed by the developments being marketed along the Costa del Sol. Lessons have been learned from the mistakes of the past. The focus is now on quality and location, while stricter regulation means people can buy with confidence.

In relation to the foreign sector, the British continue to lead the way but customers from the Scandinavian nations, Belgium, Ger-

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DREAM DESTINATION: The Costa del Sol continues to grow. many and France have also helped make the market grow.

The Scandinavians in particular are keen on new developments and buying off-plan - a process that has helped the construction industry reactivate

There has been a continuous and growing demand for housing since 2015.

THE Simed Mediterranean Real Estate Exhibition has been confirmed for Malaga this year.

The event will be held from November 8 to 10 at the Palacio de Congreso. Organisers highlight that Malaga and the Costa del Sol have positioned themselves as reference points for the Spanish real estate market.

over the past few years.

While traditional destinations like Torremolinos, Fuengirola, Benalmadena, Mijas and Marbella are as popular as ever, Estepona is possibly the most dynamic market in real estate development on the Costa

Show confirmed This is because they are leading the way in terms of business generated and growth in demand, which

del Sol. It combines a strategic location with all the services tourists are looking for, with a council that offers clear direction and certainty to developers, as well as plenty of prime building sites.

are both well above the national average.

Simed has become one of the most important property/real estate exhibitions in Spain and is now in its 15th year.

A new feature this year will be a themed area showcasing the boom of ‘sustainable’ construction techniques.

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Making the most of your home SHOULD you be looking to sell your property there are renovations you can make to ensure you get an optimal return on investment (ROI).

Whether you’ve been waiting for that perfect time to list, or are looking to sell fast, giving a bit of thought and taking that little extra care with your home renovations can make the difference between achieving a decent price for your home or being forced to give a discount.

According to internet portal Houzz, when it comes to home renovations, the ‘size of your space, the scope of work involved, your DIY abilities, the quality of materials you choose and even your geographic location all play a part.’

But remember - you really do not need to spend a fortune to give your house much better kerb appeal. In fact, according to a recent report, fairly simple measures to give a favourable first impression can give the best ROI. This can be as easy as tidying up the garden and cutting the grass.

If you live in the house this is a no-cost measure you can do yourself.

If the property is a second home like so many are in Spain, it is not too costly to arrange for this to be done.

Likewise, any minor repairs to paintwork and carpentry should be tackled - after all first impressions really do count.

Something as subtle as replacing your garage door could yield you as much as an 85 per cent ROI, according to some reports. Landscaping is another tried, tested and true improvement that can return as much as 105 per cent on your investment.

Installing new windows, adding high-efficiency appliances and repainting the exterior and interior of your home can also make a huge impact for relatively little cost.

Then make sure everything is clean and tidy and you are ready to sell.

Of course, you may wish to renovate while you continue to live in the property. If you feel you won’t be moving for at least five years, then you really should not worry too much about ROI. What matters most is keeping yourself happy.

PROPERTY GUIDE REFRESH: A lick of paint can work wonders.

At the front IN the past five years, more than 479,000 new homes have been sold in Spain, with Malaga joining Madrid, Barcelona and Alicante as a new-build hotspot.

Between January 2014 and April 2019, National Statistics Institute (INE) figures show that new homes have accounted for 21.4 per cent of the 2.1 million total transactions.

Between 2008 and 2016 year-on-year falls in sales were recorded across Spain, except in 2010 (0.8 per cent). In 2015, they plunged 34.5 per cent, while in 2016 there was a historic low of just 75,134 new home sales.

However, this marked a turning point. In the past five years (including the dire 2015-2016 period) Malaga accounted for 6.7 per cent of new build sales.

Alicante had 7.1 per cent, Madrid 17.3 per cent and Barcelona 7.7 per cent.

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Rise in expats buying property in Spain ONTRARY to what many people would think, Brexit uncertainty does not seem to have had any negative effect on the British sector of the property market in Spain.

In fact official statistics report that the number of British expats who are buying property in Spain increased in 2018.

According to a report by the College of Property Registrars (Colegio de Registradores de la Propiedad), the British continue to head up foreign demand for real estate in Spain, having made 15.3 per cent of

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purchases by international buyers in Spain.

After the British come the Germans (7.4 per cent), French (7.4), Belgians (6.3), Swedes (5.9), Romanians (5.5) and Italians (5.4). The figures reveal that just over 10,000 British nationals bought a property in Spain last year.

The report reads: ‘With regard to 2018, on the one hand, the increase in British demand stands out, surpassing the figures for 2017. However, most other nationalities in the leading group have presented lower amounts of home purchases in 2018 than in 2017.’

NO NEGATIVE EFFECT: Statistics show British demand is up.

65,500 house purchases were made by foreign nationals.

The province of Alicante is still the place with the highest percentage of property purchases by foreign citizens, maintaining levels above 40 per cent, specifically 41.28 per cent in the fourth quarter of 2018. After Alicante come the provinces of Santa Cruz de Tenerife (34.5 per cent) and the Balearic Islands with 34 per cent.

The provinces of Malaga (29 per cent), Girona (25) and Murcia (22.7).

Overall there were 65,500 house purchases by foreign nationals, which represents 12.6 per cent of the total.

There were 516,680 transactions in total recorded during the year, with prices increasing by an average 8.2 per cent.

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T HAS been revealed the average asking price for a home in the UK stands at £309,348, but what would that money buy here in Spain.

The comparison properties are priced in euros, the conversion is fairly accurate as in Spain on top of the price paid, buyers must pay IVA (the VAT equivalent) on the property which allows for the conversion rate.

For a similar price you can bag a beautiful six-bedroomed detached villa, very well decorated and standing in its own grounds. It boasts four bathrooms, its own beautiful pool and views from the roof terrace overlooking the Mar Menor, just south of Alicante, so it is convenient for both the beaches, the airport and the city. All for €315,000.

Fancy living on the jet-setting island of Mallorca? Well, how about a beachfront twobedroomed apartment in the beautiful area of Cala Vinyes? The views certainly have the wow factor. Ultramodern and luxurious and on

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A lot of house for your money the market for £325,000.

Perhaps, for the same money as your ‘average’ house in the UK, you want stylish living and a business?

Well, how about a sixbedroomed is the house, comaverage plete with pool asking and spacious gardens, which price for a comes comhome in plete with the the UK. ‘Tourist licence,’ meaning it can be operated as a ‘casa rural,’ whilst living in the separate two-bedroomed owner’s cottage in the grounds.

Inland from the Costa del Sol, near Granada, and on the market for €310,000.

£309,348

FOR THE SAME MONEY: Imagine the alternative.

Rent to buy WHERE to live in Spain is always a quandary for many expats and time and time again you meet people who have got it wrong.

You meet people who thought they would like somewhere isolated, then realise that isolated may mean a lack of certain essential services and facilities.

Or others who fall in love with a coastal resort, without realising many people go home in September and do not return until April or May, leaving the resorts desolate.

Probably the best advice is to take advantage of a scheme that is quite popular in Spain, ‘Rent-to-buy.’ This is a contractual arrangement where a property is rented for a specific time period, with the option to purchase the property for a pre-agreed price during that term.

This way you can find out if the house and the area you have chosen is what you actually want or take your time to look for the right place.

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HERE’S no shortage of bargain properties available which require partial or total refurbishment.

In some cases, this can be as simple as a new kitchen or a coat of paint.

In other cases, it could mean virtually knocking down the property to start again.

Some of these properties for reform can represent great value for money, but beware of the pitfalls.

It is very important that if you are going to do any alterations to your property, even if relatively minor, you have the correct paperwork required for the job. This paperwork should normally be arranged between the town hall and your builder and will include the builder supplying an estimate for the work.

There is as always tax to pay, but this is a relatively small amount compared to what you could be fined, if they catch you

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Guide to buying an old property to reform

REFURB: Just a lick of paint? out later or the amount you could either lose or have to pay at some later date. For example when you come to sell the property and the buyer’s

lawyers realise that the work was not authorised.

The building materials and construction used in traditional Spanish buildings can be different from

other parts of Europe, so it is very important to have any work carried out by a legal, qualified builder and ideally by one who can speak the same lan-

guage as yourself.

Before purchasing, always make sure that you understand the situation as to the supply of essential services, like

electricity, water, internet and telephone. Even reconnecting a supply of electricity can prove an expensive business and a perpetual problem for foreign property owners is access to the internet.

As anywhere in the world, it is always best to have a few quotations (presupuesto), but generally, it is wise that you should budget for costs to be up to 100 per cent higher than quoted in case the costs escalate wildly from the original estimates.

It’s often cheaper to buy a restored or partly restored property rather than a ruin in need of total restoration, unless you’re going to do most of the work yourself.

The price of restored properties doesn’t always reflect the cost and amount of work that went into them and many people who have restored a ‘ruin’ would never do it again and advise others against it.

CADAQUES, GIRONA: Coastal area which attracts big earners.

Priciest places WHILE the most expensive properties in Spain tend to be in the big cities of Barcelona and Madrid, there are several coastal hotspots that can give them a run for their money.

Property portal Idealista has come up with a list of the most expensive places outside the provincial capitals.

These are generally the favourite places of the 'jet set' to spend their summer or winter holidays and those areas just outside the big cities where people with the highest incomes live.

The coastal neighbourhood of Es

Cubells, Sant Josep de Sa Talaia (Ibiza) is the most expensive area outside a provincial capital.

In fact, it is the most expensive in Spain with its €9,145/m2, price tag.

There are other coastal municipalities which attract big earners. These include, from most expensive to ‘cheapest,’ Cadaques (Girona), Benahavis (Malaga), Arona (Santa Cruz de Tenerife), Sotogrande (Cadiz) and Sanxenxo (Pontevedra) where prices range from €4,882/m2 of the first to €2,351/m2.

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New mortgage law SPAIN’S new mortgage law has finally come into force.

It is designed to incorporate European directives on consumer protection into Spanish law and includes several aspects beneficial to the customer.

It is most beneficial to people taking on new loans, but what about those who already have a mortgage?

According to bank comparison website HelpMyCash.com there are some measures that will affect existing mortgage holders, although most of the new regulations are not retrospective.

Chief amongst these is the one that reduces the cost of converting a variable mortgage to a fixed rate loan, and secondly a tightening of regulations for foreclosures.

When it comes to swapping loans from variable to fixed rates, banks may now charge a maximum of 0.15 per cent of the outstanding capital within three years of the initial contract being signed. After this period the transaction should be free.

Before the law came into force, the usual commission for novation (where the contract was changed for another loan at the same bank) was 0.5 per THE unsold stock of new housing fell by 3.6 per cent last year to 459,876 units, according to figures just released by the Ministry of Development.

This means that the number of empty new properties has fallen by 30 per cent (189,904 units) in the last 10 years.

In 2005 there were just 195,184 new units in the ‘property bank,’ a figure that would peak at 649,780 houses in 2009.

After the bursting of the housing bubble began a slow ‘absorption’ of this remaining stock, although in most of the most popular coastal destinations there is in fact now a shortage of new build properties available for sale.

The problem is that many entire developments were taken over by the banks when developers defaulted on loans.

The ‘bad bank’ Bankia, where many of these ‘deals gone sour’ were parked, has recently said it will start a process of legally being able to sell these homes.

So, although the coastal regions, where the construction boom was concentrated, have the largest number of new

be notary and land registry fees to pay as well.

The second article that applies retroactively is the one which regulates the application of the early maturity clause. This is the step taken by banks to enable them to foreclose on the mortgage and seize the home after missed payments.

The new regulations establish tougher requirements to apply this clause. During the first half of the mortNow the cost gage term, the money should be a owed must exceed 3 per maximum of cent of the capital granted €75. or reach an equivalent of 12 instalments. In the second half of the loan term, the missed payments must be worth at least 7 per cent of the principal of the GOOD NEWS: New law makes swapping to a fixed rate loan cheaper. loan or an equivalent of 15 monthly cent, while the subrogation commission offered by banks in the current market. payments. (changing to another lender) was up to For example, a borrower who wants In addition, the lender must give the 0.5 per cent for the first five years and to move to a fixed rate on a mortgage debtor one month to catch up with any 0.25 per cent thereafter. contracted two years ago with a pend- pending payments before being able to Therefore, the application of this mea- ing capital of €50,000 would have been start the execution process. sure will mean savings for current mort- charged up to €250 under the old It has also been made easier for exgage holders who want to switch to a regime. Now the cost should be a maxi- isting mortgage holders to swap banks fixed rate to take advantage of low rates mum of €75. But remember - there may should they so wish.

Unsold housing stock decreases unsold homes, developers of the latest new builds have little problem selling. It seems to be simply a bottleneck in the process that means properties lie empty.

The Valencian Community heads this particular list with 86,137 units, almost 20 per cent of the national total. Next is Cataluña, with a stock of 73,048 (16 per cent), and Andalucia, with 69,327 units (15 per cent). By province, Alicante (39,309) and Barcelona (38,048) are the areas with the highest number of new unsold homes. Castellon, Valencia, Murcia and Almeria also have considerable numbers.

The Community of Madrid, on the other hand, accounts for 8.73 per cent of the total stock (40,145), while Toledo, where building happened on a massive scale due to the proximity of the capital, represents 4.75 per cent of the total (20,714 properties).

By region, the biggest fall in new stock last year was in the Basque Country,

where it was reduced by 30 per cent. In the Balearic Islands 10 per cent of these properties were bought.

By province, Guipuzcoa, Malaga, Huelva, Huesca and Lugo all saw stock decrease by

more than 10 per cent.

The presence of these homes in the property bank seems to have little effect on the market generally, as many were built in inaccessible and unpopular locations. Some experts say that many may well be bulldozed in the long term as the market concentrates on less speculative developments in sought after areas.

POPULAR: New builds are selling well.

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Property perceptions CONFIDENCE amongst homebuyers is continuing to strengthen, and they expect prices to continue to rise, albeit more moderately than recently, according to the latest Solvia Real Estate Trust Index (ICIS).

Some 59 per cent of the population believes that now is a good time to buy a home and that the market situation will not be very different in two years.

The index measures the perceptions and expectations of Spaniards when it comes to buying a home. It remains in positive territory and stood at 108 points out of 200 in April, reflecting continued optimism among consumers about buying a home.

According to the report, Spaniards perceive that prices are rising and there are no longer as many bargains to be had, but housing remains a good investment option.

Looking ahead two years,

consumers are evenly split on what they believe will be the state of the market. Some 51 per cent think that it will be a better time to invest than today.

Director of strategy, consulting and business development of Solvia, Guillermo Estévez, said: “In this sense, we perceive a convergence between the current and future vision that Spaniards have on the real estate market. We can anticipate that Spaniards will be less likely to postpone a decision to buy a home.”

Most regions have an index value above 110 points - higher than 100 is viewed as positive.

The exceptions are Cataluña and the Community of Madrid, which have ICIS values just below 100 points.

The main reasons for this are the higher price rises those regions have seen in the past few years compared to the rest of

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More than 60% recommend buying.

BUY NOW: Most Spaniards think now is a good time to purchase a home.

Spain. They also have fewer bargain opportunities, meaning consumer confidence is lower.

Spanish consumers throughout the country believe house price growth will slow down, with the exception of residents of Madrid.

Some 82 per cent of Madrileños believe prices will continue to rise at a fast rate ‘because they still have a long way to go,’ and that in two years the trend will still be upward (69 per cent).

More than 60 per cent of

those questioned recommend buying a property rather than renting.

This proportion has grown from two years ago, when 55 per cent of respondents thought buying was the better option.

Town or Country Arty the choices in Spain outside ONE of the first considerations when buying a house in Spain is the type of community you want to live in and the type of property.

For those of you who want the urban lifestyle, near to chic restaurants, nightlife and incredible culture, then, like the vast majority of Spaniards, you should consider buying or renting an apartment. They tend to be bigger in Spain and the majority have a balcony or terrace.

For people who want to live a more isolated lifestyle, with a back to nature feel, then the houses of the ‘campo’ (or countryside) should be a consideration. Given that the majority of the local population tend to be very sociable people, they do not want to live such an isolated exis-

VILLAGE HOUSING: Alternative locations. tence and therefore bargains can be found.

For people who want the luxurious ‘villa’ lifestyle then there are many available, the majority, however, are on urbanisations often high above the towns.

These urbanisations, of more modern housing, will generally have access to most modern facilities, but

may still be somewhat removed from bars and shops.

The other alternative location is to live in a village or small town. Living in such places is different from most English equivalent place. The facilities are far better, with bars, public swimming pools, doctors and pharmacies located in

most villages. There is a real sense of community and a chance to integrate with the local Spanish community.

On the flip side, many houses in villages will tend to have little or no garden and the rules regarding the installation of swimming pools are strict and prohibitive.

ONE of the big attractions of life on the Costas is the amount of use outside living areas get thanks to the year-round mild climate.

At this time of year in particular terraces, balconies and gardens are like an extra room, used for relaxing, family meals and for entertaining.

So it’s well worth investing a bit of time and money in making outside living areas look as attractive as possible.

Pot plants and hanging baskets are a natural adornment, but these days there are also any number of pretty accessories and tasteful creative touches available.

Scented candles and garden table lanterns are fairly obvious choices.

But how about a few pieces for a really individual look: a colourful piece of wall art, a Moroccan-style sconce, or a statement outsize outdoor clock.

And for a really convivial atmosphere for al fresco dining, festoon lights are just the ticket!

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