Investing in Marbella,Spain.

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pthedj

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Thinking about purchasing a 3 bedroom apartment (111 square meters built plus terraces of 86 square meters) in Marbella,Spain. Its part of a small gated development & the apartments are going for 50% off the original developer's asking price + there is a 100% mortgage available.
Although I have not yet made the trip over to see the development, it seems to be well finished, is well spec'd & the landscaping looks fantastic also:

jardinesdelalbaicin dot com (development)


alwaysmarbella dot com (Agent)


An apartment of this quality & situated in Marbella, I expect it to be fairly easy to rent on the short term letting market with good capital appreciation in the long term 10+ years or so.The agent reckons the weekly rent should fetch €399 in the quite season, €550 mid season & €735 in peak season.

Is this now a good time to buy in Spain ? Has the property prices here bottomed out or can we expect to see further falls & better value in the near future ?
 
Dont mind the 50% off developers price, its irrelevant now. Compare against todays prices for similar apts. You cant beat going over and being on the ground, but if not feasible trawl thro as many websites as you can to get a feel for prices.
I dont know where the development you mention is located but "Marbella" is used to describe a huge area. Do you really want to be stuck up in the hills the wrong side of the Autovia ? Check out the Location very important. Finally forget about rental income , there are just too many properties for let. Use it and enjoy it yourself and extended family. In general I believe it is a good time to buy in Spain but only if the location is right for your personal enjoyment and you are getting good deal after you have shopped around .
 
Be very careful about the legalities - you can't assume it works the same as buying a property here or that you have rights similar to what you would gave here, there has been some corruption in Spain resulting in people being left with properties that don't conform to planning, very much buyer beware, personally I would rather pay to rent a villa whenever you want it, less hassle and you know where you stand.
 
Just had a look at the Jardines Del Albaicin website. It is truly a beautiful well finished apartment but it is not in Marbella. It appears to be on the road to Benahavis situated somewhere in the area underneath the AP7 Motorway which cuts thro the hills.
You will need a car to get there and also more importantly a car every time you go out of the complex. To my knowledge there are no footpaths on the road that links down to the A7 coast road and the coastal strip. So if you are into Golf and content to be driving fine but if you have kids/teenagers they will have nowhere to go when they get fed up around the pool. Go over have a look and explore the area for yourself before making a decision.
 
Surely property prices are only going to deterioate further in Spain. They have huge unemployment and rising with no real growth areas in the economy at all. THe budget deficit is also huge so be careful that their isn't some large property tax rises.

It seems that you are getting most of our information from the agent as well. You need to do your own idigging to get some independent information as suggested above to see if the price is good.
 
I assume you would not consider buying somewhere before you have seen it?? I agree with copper beach, "marbella" is used to describe a very big area that is not even near marbella town / strip sometimes. And I would only recommend buying a place you plan to use yourself and not dependant on rentals which are falling in demand and tourists usually go for places within walking distance of the main strip and this apt is far from that. Incidentally if you do go over one of the nicest restaurants I ate in in Spain is at the top of a hill in Benahavis, I'll ask my other half the name I forget it now.
 
BTW I never posted on this particular overseas investment forum before but I read guidelines there and you should not have given the development name. Apologies to the mods for throwing in my tuppence before reading the guidelines here.
 
Where's the mention of yield in your post!!? Have you even worked it out? You might be better off putting your money in the bank.

Just because the property is 50% off it's peak doesn't mean it's not 30% overvalued so be careful and check out local prices and resale activity. For capital appreciation there must be significantly more demand than supply. Ask yourself where is his going to come from. Things are very precarious at the moment with the Greece situation. Don't let the fact that we've all become de-sensitised to bad economic news fool you into thinking everything is rosey all of a sudden.

Post your expected yield, maybe it is a good deal and I'm being too negative...
 
I would certainly be looking at the second hand market rather than the new development market. If I were purchasing in Marbella I would be looking for somewhere second line in the town that needed some refurbishment or within 10 minutes walking distance. Nothing like pounding the beat to get a feel for best location, bring a notebook because there are plenty of For Sale signs about.
 
pthedj,
Benhavis is not exactly Marbella. Its like saying that Greystones is Dublin.
If you are seriously thinking of buying, I would strongly suggest that:

  • Go out there and visit the general area
  • Look at the vast amount of second-hand property on the market
  • Be sure exactly where you want to buy (i.e. in Marbella town, in Puerto Banus, in San Pedro, in Benhavis or some other urbanization)
  • Ideally spend some time in the area of choice to check it out
  • If offering to buy a property, offer 60% of the asking price (perhaps on a couple of properties), give them a week to decide. Negotiate hard, there are lots of property for sale. Its a buyers market.
As for the rental market, if you look at various rental web sites you will see that there is a flood of property for rent. Whatever figures the agent tells you...half it. Even in the general Marbella area, how many weeks rental can you really expect/ I would suggest that you would do well to get more than 20 weeks.

Property prices have dropped in Marbella, but do your research before to part with any cash. There are vast numbers of apartments for sale.
 
A friend of mine has an estate agents in Marbella. Business seems to be picking up with the prices dropping. Spanish, British, Scandanavians and Dutch are all back in the marketplace so the demand is there. Unlike Ireland which has domestic buyers buying domestic product, Spain has domestic and international buyers for its properties.

pthedj, I personally wouldn't go for that development Jardines de Alcaucin for many reasons. There are plenty more developments closer to Marbella that are better quality and VFM. Also, it's possible to get up to 100% mortgages on some developments as the developers need to sell at the mortgage amount. Gazules del Sol was a good example, 160 apartments sold there last year (in a recession!!!)

Be aware that even though the market is down at the moment, don't expect your offer to be accepted. There are some desperate sellers but there are also ones that aren't that affected by the current downturn. Don't believe everything you read in the Irish newspapers and don't compare Ireland to Spain, apples and oranges.
 
I have lived in Spain for the last number of years, although I am not specifically familiar with Marbella. I am incredulous to be honest that anyone would even consider buying an apartment on the basis of pictures on a website and PR guff from the agents somewhere that they have never been!

Have you given any thought to undertaking serious research on the state of the Spanish economy? Have you looked at recent IMF and European Commission predictions for the Spanish economy - essentially, Spain is likely to be one of the slowest of the Eurozone countries to exit the recession and, to be honest, the government has only just started to take seriously the need to cut the deficit (they announced a 5% reduction in public service salaries today) and only because they were forced to do so due the crisis facing the euro. Have you looked at any analysis of house price trends in the area you are buying in? Rental yields? Over supply issues? Legal issues? (google 'Ley de las Costas' to see what I am talking about).

Why do you 'expect to see good capital appreciation in the next 10+ years' in respect of a property you have never seen in a development you have never been to in an area that has a massive oversupply of housing in a country which is facing serious economic challenges both now and into the future?? Based on whose analysis (apart from the estate agents??)

Have you done any research into the bank that it going to give you the 100% mortgage? Are you aware that, while the big players in the Spanish banking market have thus far weathered the crisis reasonably well, the situation of many of the smaller regional banks ('cajas') is in the opinion of many economic commentators in Spain, a disaster waiting to happen?

Are you aware of the ongoing controversy all around the coast of Spain re developers having build apartment complexes without properly negotiatings with local authorities issues such as road access, water supply, rubbish collections, street lighting et al et al??

I love Spain and would love in the future to buy a house here to holiday in and/or retire to. In a million years, I would not in mid-2010 buy into a new apartment scheme in Marbella or anywhere else on the southern coast of Spain which is being marketed to foreign buyers on the basis of 100% mortgages.
 
Thanks for the replies everyone, some very good advice there & with all thats happening in Spain at the moment, it's probably not a good time to even hop in to a plane yet to see it in person,never mind actually making a purchase.
 
I currently live in Spain, and can tell you, right now is a great time to buy.

However, this particular development doesn't look good, in my opinion. If you're buying with the intention of renting; I would definitely concentrate on properties closer to the beach, or to Puerto Banus/Marbella. Take into consideration all of the usual: location, public transportation, entertainment, shopping nearby, grocery, easy access to main roads, distance from beach, neighborhood...

Buying a property based on the developer's website is the fastest way to make a mistake on Real Estate. That website didn't even look good at all.. sketchy site, cheap-looking furniture and kitchen, location too far from the beach, small unknown developer from Madrid... several red-flags...

You'd be much better off buying from a distressed seller that has a property on a good location...

The only way to even consider making an overseas property investment; is by going to the desired location, and getting a feel for the place and the market. Once there, you may even not like it.. Also remember that vacation property is a very risky investment... don't count with neither rental income nor appreciation, and you won't be dissapointed.. afterall the market is flooded with properties both for rent and for sale...

Sometimes I wonder what it is that attracts so many northern europeans to Marbella.. In most of Spain it's considered the capital of bad taste..
 
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