Spanish Property Recession Over as Professional Investors Take Positions

05 Apr 2014

With the news that sales are on the increase, major Spanish companies seeing their share prices rise and major professional Investors making substantial investments is the Spanish property over.

The answer is a resounding YES if you’re talking about the international property market in Spain and NO if you’re talking about the local housing market according to Nick Stuart Managing Director of leading Spanish real estate company Spanish Hot Properties. It’s pretty clear with Spanish property prices on the increase in certain areas and over 4600 sales in Malaga alone to international property buyers that the recession is over for the International property market in Spain. However the local market which accounts for 88% of the market still has some way to go mainly due to the lack of finance available to local residents said Nick.

So what type of professional investors are entering the market and what is their investment strategy? The reality is different investors have different approaches but the bottom line with all of them  is they see that buying property below replacement value  and below market value in a market that is already showing price rises too good an opportunity not to be involved with said Nick.

Nick gives three different investment strategies from 3 investor groups who have consulted Spanish Hot Properties to give an idea of different investor thought processes.

INVESTOR A

Quite simply this is what quite a few investors are doing in that they see what the bank are selling their repossessions for in the open market and then go and buy all the remaining stock off the bank in a certain development at a minimum of 35% of what the bank are currently offering. Obviously not every bank is agreeable to this. The view of the investor is that over a 3 year period they would expect to see big price rises in the value of their assets.

INVESTOR B


These are investors who see potential in building new property and look to buy land at 50% of the true market value so that they can build and make sufficient profits to justify those investments. The major issue with this investment is they can only buy land from the banks that make the deals work for them as individual land owners want too much money and do not need to sell. Spanish Hot Properties have been able to locate the right assets for these investors to buy.

INVESTOR C

These are investors who wish to buy unfinished projects that went bankrupt and finish those projects off and then resell those properties at the current market value. Obviously the secret for these investors is to be able to buy these assets at a price that allows them to make sufficient profits.

These are just some examples of different approaches from different investors and obviously there are other investment strategies being carried out some using a hybrid of all of the 3 mentioned above.

If you would like advice on how to take advantage of the Spanish property market then contact Spanish Hot Properties for more information

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