SPANISH agents are in a frenzy over plans to offer residency to non-EU foreigners buying houses, in a bid to kick-start the market.
However, the most controversial part of the deal may be the £128,000 (‚¬160,000) cost of residency in return for property investment, a low price which undercuts other nations. In Ireland and Portugal residency papers for house buyers cost £324,00 and £405,000 respectively.
“It’s a balanced figure,” Mr Garcia-Legaz says. “Any lower and it might create a massive demand for residence permits with housing as the excuse to get them.”
The statement seems ingenuous given that it appears to be a calculated move to undercut rival countries with housing problems, particularly Portugal. However, British buyers struggling to sell properties could benefit substantially. The market in Spain collapsed in 2008, leaving many in negative equity, with some even being evicted and others living in half-finished complexes with almost no facilities. The worst hit regions are the southern Costas of Andalusia, Murcia and Valencia, where rampant over-building was the norm.
Another measure which could eventually help the stricken market is the creation of a state-run “bad bank”, Sareb, which is taking over toxic property assets. Domestic lenders, including several large banks, last month invested £350million (‚¬430million) in Sareb. International investors have not however come forward and it is believed that the residency plan could stimulate more foreigners to participate in Sareb.
Strangely, given this background, one British developer on the Costa del Sol is actually still doing rather well.
Last month Taylor Wimpey broke ground on an apartment scheme, Los Arqueros Beach, in San Pedro, just west of Marbella. If ever there was proof that location is key to property, this is it.
“When we launched the development last month the entire press and local council turned up to see the spectacle. It’s a rare occasion these days,” says Marc Pritchard, sales and marketing manager for TW Espana.
“Four years ago it would have been unthinkable for the mayor to come.” The San Pedro complex is located behind Marbella’s Golden Mile, a strip with many villas around the £1million mark fronting a beautiful promenade, with views to Puerto Banus and Gibraltar.
Yet prices for the three-bedroom apartments at Los Arqueros Beach are from just £158,000, perfect for Russian and Chinese nationals seeking residency.
Taylor Wimpey has also just sold four units, at the newly-released Avalon complex at Los Arqueros Golf, in Benhavis. Prices are from £203,000 to £231,000 for two and three-bedroom apartments, which is not particularly cheap.
At La Floresta de la Mairena, behind Marbella in the quiet hill area of Elviria, Taylor Wimpey has sold all but six of a second phase of residential homes. Prices here are lower, starting at around £134,000 but there’s nothing very different about this complex, as opposed to hundreds of others, apart from the fact that it is selling.
Where once Marc’s clients would have been 75 per cent British, they are now from all over northern Europe, including Germans, Scandinavians and Belgians, along with the Russians and Chinese. But the brand has a strong appeal to British buyers.
THIS, as well as the quality of finish, is partly what attracted Mark Heaton, 47, and his wife Lynne, 45, to another Taylor Wimpey development. The Heatons (pictured left) from Essex bought a three-bedroom apartment at Los Robles de Los Arqueros in November. They paid £267,000 in cash.
“I knew all about the horrors of Spain. You only have to drive along the coast to see the over-building,” says Mark.
“Dealing with Taylor Wimpey gave me confidence my deposit would not go south and it is an established resort so we know it will be completed and the facilities will be maintained. We intend to come here at least eight times a year and I can continue to run my online fancy dress hire business. Spain is well developed and almost on a par with the UK for broadband and internet access as well as shops and other facilities.”
The weather was another major reason for choosing southern Spain.
“I’m fed up with the British winter. We were sitting on our balcony at Los Robles in December and it was 22 degrees and sunny most of the time. Plus there is the ease of travel, with short flight times and cheap operators.”
Mark is aware that the creation of the bad bank has led to prices being slashed but he is not bothered. “I am fully aware that prices may fall further. I haven’t bought it as an investment but for a lifestyle change.”
Taylor Wimpey’s continuing survival in Spain is complex. In part it is due to the fact it was the first developer to slash prices.”We dropped our prices dramatically,” Marc says. “Also, people want new homes with the latest fittings and technology which is a big problem for the banks stuck with re-sales.”
The fact that they are in a good location is also key.
Spanish expert Barbara Wood, of The Property Finders, singles out Marbella, San Pedro and Sotogrande as the safest places on the coast. “The quality market has continued to grow through 2012 in established, top-end locations such as these,” she says. Meanwhile, the residency plan will be a fillip as there is no guarantee that even Taylor Wimpey will be able to repeat its sales success of 2012.
“I have had emails from all over Spain about the plan even though it is only a declaration of intent so far.
We expect many North Africans and other Arab people affected by war to take advantage of this if it comes into force, as they want somewhere they can go quickly. Thanks to the problems in Europe and the flight of money, we have had a very good year in 2012,” says Marc.
The downward pressure on Spanish property prices will not be helped by the VAT rise on new homes which came into force on January 1 and which now stands at 10 per cent. No wonder agents are jumping the gun on the residency plan.
Within four weeks of the announcement, property group Grupo Penarroya had flown in Chinese buyers and was showing them around empty homes at La Reserva de Marbella, a luxury estate in the hills, and urging them to buy immediately.
No luck however. The Chinese are happy to wait for a guarantee of residential status.
- Source : Express
- Sunday January 6,2013
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By Andrea Watson
