Since last year, we have all been worried about rising interest rates, the direct result of the European monetary policy put in place by the Central European Bank (BCE). This issue is affecting property investments both at home and away, Spain has also suffered from the bad press accompanying a number of scandals.
In the first half of 2007, some of the main construction companies like Metrovacesa, Fadesa or Royal Urbis saw a big drop in the value of their shares on the stock market (e.g. the extreme case was Astroc which lost 90% of its value).
These stories made the headlines and fed suggestions that the property boom had turned to burst. Time has since proved that this perception was exaggerated. A subsequent analysis of the market showed that while that crisis affected the developers, some of the bigger construction companies actually saw their assets increase in value by a couple of billion Euro. Nevertheless, it is evident that the demand for Spanish holiday properties had decreased (it now takes twice the amount of time to sell a property on the Spanish coast than it did 3 years ago). Headline corruption stories on the Costa del Sol have not helped either.
MAYORS IN THE CLINK
Several mayors of Marbella have been jailed for allowing rezoning of up to 95% of the municipal land. As a result it is estimated that approx 20,000 dwellings were illegally built. This is not an isolated incident with similar stories of corruption emerging from areas nearby such as Manilva, Canasa, Benalmedena and Rota.
The Spanish government has reacted swiftly with implementation of new laws intended to bring more security to the building sector along with combating cases of corruption and protecting investors and new owners. So my suggestion is that this could well be the right time to invest in your own place in the Spanish sunshine. And with an oversupply of sellers chasing buyers the price should be right also. The following tips should help ensure that your investment is even more secure.
With more properties on the market than ever before research where, why and when you want to buy, Is it an investment property, residential or both?
DON’T SIGN ANY DOCUMENTS
Never hand over any monies or sign any documents without seeking legal advice.
APPOINT A QUALIFIED AND INSURED LAWYER
An Independent Spanish lawyer with a good command of English is who you should ideally want to look after your interests. Be careful of so called “experts in Spanish law” who may not be either qualified or insured to properly look after your transaction
PREPARE YOUR FINANCES
Always ensure that you have prepared your finances or at least have asked about the pros and cons of getting a mortgage in Spain or Ireland.
Apart from your legal costs bear in mind that you will need to pay extras such as bank commisions, obtaining you NIE number before completing the transaction, connection fees for both services such as water, electricity and so on.
Alvaro Blasco, an Irish Solicitor is also a Spanish Abogado, qualified since 1995 and runs his own law firm specialising in Spanish Conveyance.