Time to Buy Costa Blanca Property?

Country:  Costa Blanca; Spain

Over the past 40 or so years, sleepy fishing villages and port towns on the Costa Blanca, have turned into bustling towns – and bustling towns have turned into frenzied cities. Still there’s something truly charming about this part of Spain, and that’s a fact that has not gone unnoticed by the many thousands of Brits who have bought Costa Blanca property, whether for investment, holidays or retirement.

That said, three years ago, Spain was getting a lot of bad press over rotten government officials swindling holiday-homers, dubious developers scamming investors, and the government doing itself no favours with its unfortunate tendency to make property owners pay to have their land taken away from them.

To pour a little fuel on this fire, a feeling began to grow among British investors that perhaps they were no longer making their money work for them by paying top euro for a property for sale on the Spanish costas.

On the Costa Blanca, the property ostriches were busy burying their heads in the sand and this was the icing on a bitter cake: many properties that could have been sold at the right price simply languished on the market.

Agents now changed their tack, pitching their marketing more at the holiday-home buyer than the investor, and singing the praises of the Costa Blanca as a lifestyle choice. To a certain extent, this worked: with warm seas, sunny skies, plenty to do, day and night, and more speedy and cheap flights per day than you could shake a stick at, the Costa Blanca is a serious lifestyle option for fed up Brits.

Nevertheless, as the economic situation worsened in the UK, and property buyers became more nervous and hesitant, property prices should have come down but didn’t. Now some of the biggest agents in Spain are on the ropes – or out for the count.

So what does it all mean for the Costa Blanca property market and the decision to buy property on the Costa Blanca?

David Blackwell of Headlands International says: "Demand for property in Spain is not as high as it has been in recent years, but it’s still the number one location with Brits looking for a second home. Despite the problems UK property buyers have with a strong euro, and buyers reducing their spending, analysts predictions are that the Spanish slump is only temporary, and now is a good time to buy Spain property– in a flat market."

Blackwell believes those investing in a flat market are more likely to find property prices attractive, and adds that at Headlands two out of three enquiries for Spain are Costa Blanca-related.

Of course, prospective property buyers on the Costa Blanca are unlikely to be wooed by anything less than great property prices, key-ready properties, winning locations and excellent build quality. Agents and developers are going to have to do something dramatic to make their properties appeal to Brits who are sitting on substantially less equity in their UK properties than at this time last year. Witness Headlands, which, as part of its own ‘dramatic’ response, has joined forces with huge developer Taylor Woodrow España to package an aggressive pricing policy, which offers property buyers of ready-to-move-into properties discounts of up to 30 per cent.

This is obviously going to compensate for our home-grown property and euro exchange woes, but will it do the trick? And will other property companies be able to follow suit?

It’s possible that the choice will be taken away from them as a property glut looms. At a recent conference in Valencia, the director general of the Bank of Spain, Jose Luis Malo de Molina, said: “The number of new homes this year will hit an all-time high.”

This record-breaking feat is definitely not going to earn applause from current owners of Spanish property, who are almost certain to see the value of their investment fall. Potential property buyers, on the other hand, may feel the time is right to go in for the kill. Distressed sales are on the up, as are repossessions; and in this buyer’s market, those who can afford to play the long game will see some high quality property being offered at prices that would have been called giveaway a year or two ago.

The consensus among property agents at the moment is that prices will stabilise late this year or early next, but, due to the glut of property on the market, it will take considerable time for the market to return to last year’s highs.

As would be the advice in troubled markets the world over, they suggest property buyers seek out better-quality property in areas that are most likely to hold their value.

In the case of the Costa Blanca there are number of good candidates.

Moraira, a pretty town just south of Javea in northern Costa Blanca, has fended off the worst ravages of tourism, possibly because its sole beach is far from the best in this part of the world. The town itself, though, has many charms; and some really good restaurants and bars, and superb beaches can be found in nearby Javea and Denia. Prices of property in Moraira have fallen by as much as 15 per cent, but upmarket developments here are holding their own. Apartments with two bedrooms are currently selling for between €150,000 (£118,000) and €250,000 (£197,000), while villas will fetch between €350,000 (£275,000) and €650,000 (£511,000).

A little further down the coast, towards Benidorm, the town of Altea has fared a little better, with prices of property in Altea feeling a downward tug, but certainly not in freefall.

Altea can genuinely claim to be that awful cliché: a taste of the real Spain – with its Medieval heritage proudly on show in its cobbled streets, its picture-postcard old quarter, and a relaxing palm-lined promenade.

The town is a mere 12 kilometres from central Benidorm, but the pubbers and clubbers of that particular hotspot are unlikely to find what they’re looking for in this laid-back destination. A number of upmarket developments reside here, the most prominent of which is Altea Hills, which has a number of resale properties available, including a harbour-front apartment on the market for €220,000 (£173,000).

Much further south – and a world away from genteel Altea – lies Torrevieja, which has been rolling out the Watney’s Red Barrel for donkey’s years. Fun-loving Brits have always adored this town, which has some excellent beaches (Blue Flag, no less), as well as a wonderful micro-climate (apparently partly due to the nearby salt lakes), which draws sufferers of all manner of aches and pains from across Europe.

Having said that, the town has already suffered a 15 per cent loss in its average property price, but there is a consensus that this short, sharp shock may help Torrevieja to bounce back rather more quickly than other parts of Spain. Currently, well-positioned, two-bedroom apartments in Torrevieja are selling for around €250,000 (£197,000), while villas are averaging around €500,000 (£393,000).

Elche, some 25 kilometres from the coast but only 12 kilometres from Alicante airport, is perhaps not as well known as it should be to the Costa Blanca fraternity. It boasts the largest palm grove in Europe, which gives it a refreshing North African feel, yet its sizeable centre offers all the comforts and activities of a major western European city, including an English school. It’s another Costa Blanca city with heaps of historical interest, and the surrounding countryside is stunning.

For this reason – and the fact that the average prices for property in Elche rose by more than ten per cent last year – it could be a great wildcard for Brits looking for some value-for-money resale property, especially if they’re in the market for a cortijo (country house) or finca (farmhouse).

Right now, the market for Costa Blanca property is reeling from one body blow after another, and this must result in a continued reluctance among British property buyers to take the property plunge there. It will recover, of course, and whether it’s this year, or next, or beyond, the Spanish costas will remain the number one choice for British holidaymakers – and holiday-home buyers – for many years to come.


First published in October 2008.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.

See all properties in Costa Blanca

Some properties in Costa Blanca

	Ref MP5090916, Mil Palmeras, Spain
	Price: €52,000 Type: Apartment
	Very well maintained, fronline, resale, fully furnished and equipped, studio apartment, third floor with lift, attractive resale studio apartment, with seaview and views of the surrounding countryside to the mountains. Glassed-in terrace.
	View details | Enquire further

	Ref MP5070105, Mil Palmeras, Spain
	Price: €65,000 Type: Apartment
	Fully furnished, second floor, attractive resale studio apartment with seaview. Glassed-in terrace, space-saving fold-away beds, underfloor heating in bathroom, parking off-road.
	View details | Enquire further

	ALM/CM1026, Formentera Del Segura, Spain
	Price: €70,000 Type: apartment Bedrooms: 2
	This well presented ground floor apartment is located in the popular village of Formentera Del Segura, central to the villages of Rojales and Benijofar.
	View details | Enquire further

	ALM/CM1305, Daya Nueva, Spain
	Price: €74,950 Type: apartment Bedrooms: 2
	This spacious top floor apartment is located in the popular village of Daya nueva. The property makes up part of a small complex (25 properties), which share a communal pool and bathing space.
	View details | Enquire further

	ALM/CM0884, Formentera Del Segura, Spain
	Price: €75,000 Type: bungalow Bedrooms: 2
	This well maintained ground floor bungalow is situated in Los Palcios boasting fantastic views of the countryside and being only a short walk from many amenities and the municipal pool.
	View details | Enquire further

	Ref MP5091121, Mil Palmeras, Spain
	Price: €75,000 Type: Apartment
	Fully furnished, ground-floor, nicely reformed, resale studio apartment with seaview. Open terrace, garage space for cars and bicycles in the basement.
	View details | Enquire further

	ALM/CM0869, Ciudad Quesada, Spain
	Price: €79,000 Type: penthouse Bedrooms: 2
	This well presented top floor apartment is located at the top of Quesada, central to an array of amenities. The apartment makes up part of a community sharing a communal pool and extensive green areas.
	View details | Enquire further

	Ref RM5090520, Riomar, Spain
	Price: €80,000 Type: Bungalow Bedrooms: 1
	Very well maintained, south-facing, upper floor maisonette, in a very attractive and popular development of Riomar, close to Mil Palmeras, with magnificent sandy beaches and all amenities close-by. It has a large open balcony with views to the sea.
	View details | Enquire further

	Ref MP5070806, Mil Palmeras, Spain
	Price: €80,000 Type: Apartment Bedrooms: 1
	Fully furnished and equipped 1 bedroom, second-line apartment, with glassed-in terrace, very close to the fabulous Mil Palmeras beach, bars, restaurants, supermarket, banks, and all amenities.
	View details | Enquire further

	Ref MP5070410, Mil Palmeras, Spain
	Price: €82,000 Type: Apartment Bedrooms: 1
	Excellent, nicely renovated, fully furnished and equipped, ground floor, resale 1 bedroom apartment with south-facing, glassed-in terrace, and off-road parking.
	View details | Enquire further

See all properties in Costa Blanca