The crazy Spanish over-build spawns a new marketplace

Friday, March 12, 2010 7:44
Posted in category Blogging For Cash
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British holiday makers have long favored the Spanish Costas for good low priced holiday destinations. Low budget package holidays have made some of the Costas well known such as the Costa Brava on the Barcelona coast and of course Costa Blanca and Costa Calida just below on the Alicante coast. Different Costas deliver different products with Costa Blanca offering low cost package holidays in towns like Benedorm and Torrevieja. Costa Almeria and Costa del Sol are found further down the coast with Costa Almeria, once known as the Forgotten Coast, now developing fast and Costa Blanca harbouring the rich and famous in towns like Marbella. The Costa del Sol is regarded as the Upmarket coast althou it also has its fair share of lower budget offerings like Benalmadena and Torremolinos.

The good times.

With hundreds of thousands of British tourists pouring into the Holiday resorts and towns along the entire Spanish coast, the temptation was just too great for building developers small and large. In the early days the credit was easy to obtain by both builders and buyers, so the building frenzy began. The tourists were easy prey. Visitors were often shocked by the fantastic offers being thrust at them such that they could go home with a new holiday home AND cash in their pockets? It sounded too good to be true so they bought holiday homes by the thousand and the crazy building over-build exploded into a fury.

Non stop building.

Developers and builders were confident. It took little effort to arrange off the shelf mortgages for just about anyone with a simple signature so sales were easy. So confident were they that they redoubled their building projects and shifted into the lesser known Costas like Costa Almeria. By this time many local councils had put a lid on just how high these apartment blocks could be built, in an attempt to avoid a repetition of the Benidorm scenario. With such limitations, the only way was out instead of up and many self sufficient little tows began to form. Because sales were moving so well the developers began moving large parts of the vast profits projected into even greater development, but faster than the actual sales rate. Now they were sure of future gains and moved ahead helter skelter in the flow of quick sales..

The fateful Credit crunch hits

Then money dried up as the credit crunch took hold. With frightening rapidity, the crunch took hold and brought the mad rush to a frightening standstill. There were a few causes. On the one hand, with major financial backbones facing collapse, the easy credit vanished. As the banks struggled to survive they saw a way forward by calling in some of these huge funding loans only to find that most of the capital was tied up in thousands of real estate projects. Not forgetting, of course, that the equally sudden removal of those give-away mortgages meant the sales boom came to a grinding halt and for those that had already bought the interest rates started to shoot up. Secondly, Sterling collapsed against the Euro. Now any expats with income derived in the UK found themselves earning one third less. Now mortgage repayments were hard to meet with the fall in the value of the pound and the increase in mortgage interest rates.

Ready for investment with Cheap Spanish Property.

Foreclosures and repossessions are on the rise throughout the Costas. The price of rentals has dropped dramatically with so many empty properties available. It is now a buyers market through and through. Thousands of properties are on the market at a fraction of their value through a desperate attempt by many owners to unload before repossession. `Now with so little cash around there are few with funds they are prepared to risk. And so the New Distressed sales market market has been born allowing investors the chance to make great profits the moment the credit crunch slows down.


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