Alicante, Spain (PRWEB) October 22, 2008
The financial headlines may be gloomy, but, as many UK buyers are finding out, the sun is still shining in Spain. Many Spanish builders have slashed prices on completed new properties to well below the market rate and some British buyers just can't resist a bargain, according to Kieran Byrne of HomeEspana.
"We've never seen anything like this," explains Kieran. "Since last year, property prices have fallen on the Costa Blanca by around 3%, or by even less if you look at the official figures. But even some of the best quality builders are cutting their prices by ten times that -up to 35% in some cases. The market would have to keep falling at its current rate for 10 years for those prices to make sense. The buyers just can't believe their luck."
The huge discounts are the result of a serious lack of cash flow for many Spanish builders. Over the last few years, they've built properties faster than they can sell them, and the major infrastructure projects which used to provide most of their income have almost dried up. Overall, Spanish construction output fell by 15.9% in the year to July 2008, according to figures from Eurostat, the EU statistics office and several large Spanish construction firms have gone into administration. The Companies that are left need to sell properties quickly and so have cut their prices by far more than the market would suggest.
The bargains may not last long though. As Kieran says, "As soon as they've built up their cash reserves, they'll put their prices back up to the market level. They can't sustain these prices for long. I'd advise anyone in a position to buy to look at what's on offer as soon as they can."