Why property prices in Spain have gone through the roof
Some of the main reasons prices in Spain and in particular on the Costa Blanca have gone so crazy (generally acknowledged as doubling in the last four years) are:
As the British have seen their house prices soar, they have remortgaged heavily and taken some of the equity out of their main home in order to buy a second home.
The Spanish have seen this influx of money and have raised prices. People have paid the higher prices – so the Spanish have raised them more. Again they have been met… and so the cycle keeps on going until finally buyers are exhausted and stop buying. Are we at that point? – well, see below.
People retiring have sold their main home in the UK and have received larger and larger sums as the UK prices kept increasing. People in Spain see this and ask for more – and get it.
The Costa Blanca is a fantastic place and so of course it is desirable. It is set to become the California of Europe and as people have cottoned onto its great potential they have come here in droves, driving the prices up.
The Costa del Sol, seen as the place to be, got ahead of itself and suddenly the Costa Blanca seemed cheap in comparison. The Costa Blanca has much better beaches and a better climate especially as it is not as unbearably hot in the height of summer. The Costa Blanca is not so overdeveloped.
Low interest rates have meant a second home has become much more affordable.
The development of Europe has meant that people are more comfortable with the thought of buying abroad and the European laws on paper offer more protection (although try telling that to people affected by the Land Grab Law in the province of Valencia!).
The emergence of all those low-cost, no-frills airlines has made travel more affordable and accessible. Now people can commute from Spain to the UK!
The keeping-up-with-the-Joneses factor. Let’s face it – if your neighbour has just got a weekend bolt hole in sunny Spain and you have just endured another rain-soaked weekend then it’s odds on you will start to want one too!
All those TV programmes such as A Place In The Sun have made buying a second home seem as simple as doing the weekly shopping.
To us British the comparison in prices has been a no-brainer. A bigger house, more land for half the price of that in Britain has seemed a bargain. Of course now that prices have gone up the difference is not so obvious.
Copyright © Mark Eastwood
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