Spain: Marbella and BMV opportunities - Steve Dawkins, Own Property Worldwide

Property in Marbella and Below Market Value (BMV) opportunities

I would hazard a guess that many readers of this blog have spent a weekend or longer on holiday in Marbella and for most of us, the break always seems to end far too soon.

But what if your break in the sun didn’t have to end? The short hop from Stansted to Malaga airport, the familiarity of the area and the micro climate are some of the key reasons that alongside the Caribbean, South of France and the Algarve, Marbella is one of our most popular tourist destinations.

Fortunately for those that have always dreamed of owning a home in the region, myself and many international property investors believe that now is the time to focus once again on property in Marbella, as it is one of the safest buying locations that offers genuine capital growth prospects.

Our love affair with the Costa Del Sol and in particular Marbella began in the 1960’s when Brits first started buying property there and it has since become a perennial favourite. Buyers that purchased in the 1990’s and prior are likely to be sitting on a handsome profit but for anyone who decided to invest in the last few years, the journey may not have been as lucrative or stress free as hoped.

A combination of huge over supply, poor and in some cases illegal planning grants plus the general economic downturn have meant that prices have dramatically crashed on the Spanish Costa’s. Currently, over a million unsold properties are on the books of local agents, although many of these have been constructed with Spanish buyers in mind.

However there is a light at the end of the tunnel in the shape of below market value deals (BMV).

Below market value deals or distressed sales are usually bank instructions to sell a property at the earliest opportunity, usually in the case of a repossession order. Therefore the mortgage lender’s priority is simply to sell the property to recoup the outstanding finance balance, meaning discounts of between 30-50 per cent off the current bank valuation. All of which is good news for potential UK based buyers.

The combination of declining property prices and a severely restricted access to finance has encouraged savvy investors to search for and acquire mid and high end properties at a price genuinely below their open market value.

An example of a not to be missed opportunity currently available is a frontline beach apartment in the new Golden Mile valued at around 750k Eur and offered at 470k Eur.

Confidence in the Spanish Property Market

Confidence is slowly returning to the Spanish market as the decline in house prices stabilises and banks allow developers to remortgage projects. Many agents in Spain are now confident the bottom of the market is in sight and I would argue that below market value deals available in 2009 will be the very lowest prices we are likely to witness.

With the overall trend in package holidays declining and more of us electing to rent private accommodation and therefore choose a more independent holiday, the rental market for quality properties is booming. This further builds a case to consider purchasing a home abroad, although the rent achieved on holiday lettings rarely covers the full annual mortgage and maintenance costs so careful budgeting is recommended.

As any canny investor will tell you, it’s the price that you pay rather than the price that you sell for that really dictates the profit potential in any property transaction. Marbella is a perfect example of a ‘lifestyle’ investment choice, essentially a holiday home that will provide a fantastic base for family holidays as well as capital growth appreciation.

So, if you have always dreamed of watching the sun go down while dining out in the port followed by a few cheeky drinks at Sinatra’s and then a leisurely stroll back to your very own apartment, now is the time to make that dream become a reality!

Steve Dawkins

Steve Dawkins is regarded as a leading figure in the international property sector and is Managing Director of Own Property Worldwide Ltd (OPW), an international and UK property brokerage. The primary focus of OPW is to source and promote below market value (BMV) properties and negotiate the sale of distressed residential opportunities in locations as diverse as Marbella, Dubai, Portugal, France and the USA.