As the World is Gripped by the Economic Crisis are Cash Rich Property Hunters in Europe Laughing All the Way to the Bank?

The Costa del Sol, Spain was the favoured destination of most Northern European’s who were looking to buy a property investment in the sun, a good example is the popular resort area of Calahonda about 15 minutes from Marbella, in 2001 a nice two bed apartment, of about 100m2 was roughly 120,000€, by 2006, in the same area, a newly constructed two bed apartment had shrunk to 75m2 and was roughly 250,000€.

Tales of gold and glory were sold to the property investors, now many of these home owners are left looking at their investments standing still, and in some cases decreasing in value as the property market slides downwards after years of growth.

The Spanish property market during its boom time reflected the healthy and positive economic mood of the whole of Europe, examples such as Ireland riding high on its aptly named Celtic Tiger and the UK experiencing a strong currency exchange rate against the Euro, fed the Costa del Sol with thousands of buyers, many who purchased in multiple units. So as demand increased so did supply, to the point of saturation. Locally the demise of the Costa del Sol property market was caused by a glut of properties on the market, and the icing on the cake was the general world recession which has dried up the stream of buyers.

Those who bought at the height of the boom were left with properties estimated to be 30% over priced. Those who bought before the boom, were left competing with thousands of other properties of a similar ilk, and the only way to compete was to drop the price.

Now we are seeing prices fall as much as 25% in many cases for some outstanding properties, a good example would be a two bedroom, 100m2 unit in La Quinta one of Marbella’s most sought after addresses, initially priced at 299,000€ this is now on offer for 219,000€, parking, storage and fully furnished.

Or take this apartment, just 10 minutes from the play ground of the rich and famous Puerto Banus, a 3 bedroom unit 125m2 with spacious terraces reduced a stunning 41% from 475,000€ to 277,000€.

For those who can put their hands on cash now, or accept lower than usual mortgage lending amounts from the banks they can certainly snap up a bargain. We are already seeing investors and speculators with cash to spend picking off the best distressed units.

The market will eventually revive on the Costa del Sol, Marbella and its surrounding locations will always be a popular destination for many, with its mild climate and vibrant night life, here is a location of sun, sand and fun for people of all ages. A golfers paradise and a shoppers dream, Marbella has had its ups and downs over the decades but it will never lose its charm as one of Europe’s most popular holiday destinations and now that the property prices are at their lowest since 2002, now would certainly be a good time to take a better look .