JAVIER BALLESTER, MD of Taylor Wimpey de España talks to us about the Spanish market today and his expectations for 2011.
Taylor Wimpey closed 2009 with 175 home completions in Spain. What is your forecast for the rest of 2010?
Leading up to 2010 there has been less development by Taylor Wimpey de España in Spain and by developers generally across the country, therefore, in the prime locations especially stock is very limited. This has driven us to launch new developments and phases in the high performing regions such as Marbella on the Costa del Sol. Overall with less stock to sell in the completed turnkey developments we anticipate sales generally will be approximately 10% below that of last year but with a resurgence in off plan buyers of the new units there is a positive outlook for 2011.
You are saying that you have less stock of finished homes available? How much stock do you have?
When the downturn hit in 2008, we put a halt to new developments and focused our energy on finishing the existing builds realigning our build strategy to suit market conditions. Today we are very close to closing sales for this existing stock built after 2008. In fact this year properties have sold out in several developments such as Can Roses and Port Verd in Mallorca. Many of our current developments have only a few units remaining and to help the flow of sales discount pricing has been applied. Judging by the uptake of these offers we expect to sell out at Los Altos del Golf, El Puerto, Los Robles I, Las Encinas, Valle de Alenda, and Pollentia Mar by the end of 2010.
What new developments are you launching then? What plans do you have for 2011?
Last February we launched our first new development since the recession started – La Floresta de la Mairena, very close to Marbella on the Costa del Sol. It has been extremely well received by clients seeking off plan investments, safe in the knowledge they are purchasing through an established developer. In the first 3 months we sold 11 homes. Since then we have launched the second phase at El Puerto in Cala D’Or (Mallorca) and in September we launched Las Brisas at Alenda Golf on the Costa Blanca.
In 2011 we expect to release two more new developments in Mallorca.
The Spanish property market recession has been well publicised throughout the UK and we have heard of several developers going into administration. What is the secret to Taylor Wimpey de España’s success through this difficult time?
The “secret” is based on three factors:
Firstly, our presence and knowledge of the USA market allowed us to assess the depth of this crisis earlier than our competition. Therefore, since 2008, we have been adjusting our prices to reflect the changing market conditions. Even though the prices have been reduced the quality of build has been maintained and our loyal employees have continued to give our customers their all in terms of service, commitment and attitude to quality.
Secondly, our brand is key. The overseas home buyer today is significantly more sophisticated in terms of knowledge and research. They do their due diligence before even stepping on the plane which is a benefit to us as an established developer with a history of excellent developments and service. Buyers know that they are safe in our hands and security really is of huge importance.
Finally, we have an active network of estate agents throughout the UK and the rest of Europe. We have been able to earn their trust based on handling our relationships with professionalism and showing them we are committed to their requirements. Many agents themselves are becoming much more selective about who they work with choosing only to work with the best.
Is it true that there are 700,000 stock units waiting to be sold in Spain?
I don’t know if this figure is accurate… nevertheless, it is very important to understand where most of those units are.
Spain is a very fragmented market which varies from one region to another, even from one town to the next. Most of the Spanish property oversupply is concentrated in the domestic markets in the commuter belts of big cities such as Madrid, Valencia or Seville.
On the coast, there are areas with significant oversupply, but after two years with no construction the prime areas are now running out of property to sell. For instance, premium locations like Mallorca are today already in short supply. In these areas, prices are poised to steadily rise during next year to keep pace with demand.
Regarding the Costa del Sol, what are your expectations?
Areas like Casares, Manilva and Calahonda are still suffering from oversupply and will take much longer to recover, but if you are heading to a “premium” location like Marbella or Benahavis, buyers will find that good product between €200,000 and €300,000 is already hard to find.
It is also very important to research a developer before you buy. With some still struggling to make ends meet we sadly have seen a number of people coming to us having lost deposits as their developer has gone into administration. Ensure your builder has financial stability before parting with any cash, this is especially relevant for off plan purchases.
For information on purchasing property in Spain contact Taylor Wimpey de España on 0800 012 10 20 or visit www.taylorwimpeyspain.com.
