The British property buyer in Spain21/08/2011
The British property buyer in Spain
20 August 2011
An interesting article and follow-up interview by Globaledge today.
I take my hat off to Mr Ballaster, who seems to be telling things as they are, not how he would prefer them to be. Who knows? This kind of honesty could even restore a little confidence in the Spanish property market. Regarding… the language and nationality of buyers, Kyero.com receives visitors in these rough proportions:
- English 44%
- Spanish 20%
- French 12%
- German 7%
- Dutch 7%
- Italian 5%
- Danish 2%
- Portuguese 2%
- Russian 1%
Here’s the Globaledge article and interview:
British buyers remain conspicuous by their absence.
This was the damning conclusion of an article on international real estate on Property Wire this week.
So is the British lifestyle buyer market really dead? Has the economic gloom and the scare stories in the UK media permanently put an end to the British desire to own a property in the sun?
Not according to Taylor Wimpey Espana boss Javier Ballester who I interviewed earlier today.
“The market is smaller but the British are still buying. A house in the sun is still an aspiration, it’s just that fewer people can afford it and the ones that can are extremely discerning” he says.
Here is an extract from our conversation. In is an interesting read for anyone selling into the UK buyer market.
AR: How are sales volumes compared to previous years?
JB: We are selling about 75% less than in 2008. 2009 was the worst year in our history but things picked up in 2010 and this year, we are slightly ahead of where were in 2010 so we are positive.
AR: Which areas are selling well and which ones are not?
JB: Mallorca is the strongest market, followed by the Costa Del Sol. The Costa Blanca is difficult due to oversupply. Luckily our stock on the Costa Del Sol is in Marbella which has not suffered as much as other areas from over construction.
AR: Which nationalities are buying?
JB: The UK is still by far our biggest market. Around 50% of our buyers are British followed the Germans and other Northern Europeans.
AR: The brand must help you in the British market?
JB: Yes it certainly does. It helps with trust which is especially important with so many horror stories in the media.
AR: Who is buying? Is it the retirement market which is strongest?
JB: The majority of our buyers are over 50 and are purchasing for lifestyle reasons. Not everyone is retiring but most are slowing the pace of their lives down.
AR: Are you pricing aggressively? How have your prices changed over the years?
JB: We were quick to react in 2007 and watched the experience of the US so we cut prices quickly. Our prices are around 30% to 40% below their peak with greater reductions on the mainland than in Mallorca.
AR: What the key price points in your market? What sells and what does not?
AR: What is your view on the future of property prices in Spain? With such high unemployment and the banks yet to off load so many properties, the outlook can’t be good?
JB: I agree the local market is difficult and prices will probably continue to fall for some time. People cannot get access to finance and real wages are falling.
The second home market is different. Our buyers are putting down deposits of 40%. The market we aim at is very cash rich and demand is steady for property in good locations. Prices may fall a little but the fundamentals are strong.
AR: Would you not agree that many of the so called holiday homes built in Spain are not fit for purpose and should be knocked down?
JB: It depends on where you are. There are certainly many properties built inland that will never sell. Nobody wants property in ugly places no matter how cheap it is.
AR: Finally what would your advice be to agents and developers looking to sell into the British buyer market?
JB: There is a market. A house in the sun is still an aspiration for the British, it’s just that fewer people can afford it and the ones that can are very discerning.
What I would say is that it is actually very difficult to get hold of good stock. Most of the good property held by the banks has gone already and what remains is of low quality. Also the banks do not care about after sales service which is extremely important for lifestyle buyers.
Finally, it takes time, you cannot do everything in one day. Doing things properly requires time and patience.
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