By Nick Snelling

The puzzle for anyone interested in buying property in Spain is: when to buy? Is now a good time – or should you leave any property purchase in Spain for the time being?

Well, timing, as we all know, is ‘everything’ and this is always true of properties, where you can make or lose considerable money if you read the market wrong. The trouble is that we are now living in very uncertain times in the Eurozone and this makes ‘reading’ the Spanish property market even more difficult than it has been in the past!

Obviously, everyone knows that property in Spain has dropped significantly since the lunatic days of the Spanish property boom which ended, jarringly, in 2007. Since then Spanish property has dropped, on average, somewhere between 35% – 50% and returned to values similar to those found around 2003.

Needless to say, Spain is a buyer’s market offering a simply amazing number of properties. Indeed, there may be as many as 3 million properties in Spain for sale (new and resale) encompassing every section of the market from beach flats and town houses, through to fincas, villas and commercial properties. Clearly, some of these will never be decent buys but many are now priced very tightly and some provide terrific opportunities to any canny buyer.

However, this still leaves the question of whether this is a good time to buy property in Spain or not? After all, could Spanish property drop still further in price?

Well, my instinct is that Spanish property could drop in price by around 5% –10% in 2012. I say this because of the disparity in supply and demand and the parlous state of the Spanish economy with its tragically high unemployment and bovine banks. All of these conspire against Spanish property price stability – let alone the greater nervousness engendered by the Eurozone crisis.

That said, the fact that prices of Spanish property, on average, may drop further does not mean that you cannot buy bargain property in Spain now that is priced so low that you are well protected from further falls. Obviously, you have to look carefully and assess any property in Spain you are thinking of buying, very carefully.

Of course, a classic way of assessing the value of a property is by assessing its rental return and/or its build and plot cost. Frankly if the price of a quality, fully legal Spanish property is teetering around its build cost (and some are!) then you cannot go far wrong! This is equally true if the rental return makes sense.

So, is now a good time to buy property in Spain?

On the whole, if you are careful and follow the guidelines in my book about buying Spanish property then this could be a great time to buy Spanish property. Indeed, you may well be able to pick up a bargain from a desperate seller that may prove to be an inspired investment – as well as somewhere great for your holidays or permanent move to Spain…

Buying Spanish property now could be an inspired move within a property market full of desperate sellers.

Nick Snelling runs Culture Spain and is the author of five books including How to Buy Spanish Property and Move to Spain – Safely and The Laptop Entrepreneur.
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