No one has a crystal ball, but if you want to analyse the year ahead you normally start by looking back at the past year to see how its trends are evolving. After a while, a pattern begins to emerge, offering a reasonably reliable indication of what lies ahead.
For the Sotogrande property market, and based on the experience of Holmes Property Sales, the signs are certainly not discouraging, though as Ben Bateman says, “Selling in 2013 means getting the price right.”
2012 in summary
After the rather dramatic drop in 2008, and the flat period that succeeded it, last year saw a noticeable rebound in sales volumes at Holmes Sotogrande. “It was certainly significant enough to be distinguishable from the standard fluctuations that can occur from year to year,” says Ben, “and stood out clearly as an upward trend.”
In all, it was a pretty upbeat year, with sales volumes at the highest level since 2008 and more interest and enquiries coming from across the firm’s traditional sources of buyers. These include Britain, France, Belgium, Russia, Scandinavia and also the domestic Spanish market, but interestingly enough did not include Germany and Denmark.
With between 2,500-3,500 visitors to the Holmes Sotogrande website per month, the search patterns provide an interesting insight into what homebuyers are looking for. “The average visitor to our site stays for between 5.5 and 6 minutes, and it is clear that people are doing their ‘window shopping’ online and only contact us when they have found a property they like, and one that is at the right asking price.”
Price-driven demand
The fact that more people are buying is very positive, but as Ben points out it should be seen in the right context. “We believe we are at the very beginning of a market recovery, more or less where we were in 1995, when things started picking up slowly after the recession of the early 90s. It will therefore be a very gradual process, and for the next few years this will remain a buyer’s market in which price is the prime driver.”
Demand for properties in a highly desirable environment such as Sotogrande is inherent, yet under the current market conditions price remains a deciding factor. “It’s as simple as this: a certain number of homes in every property category and area will be sold this year. If you want your property to be one of them you have to price it realistically and therefore attractively.”
Given that the asking price is often not the final selling price some vendors might be put off, but in a price-driven buyers market he who waves the cash is king. “Prices have largely stabilised in sought-after areas like this, but they won’t be shooting up any time soon. It’s not a question of not having the money either, because people buying here are typically solvent and the banks we work with confirm that even those clients with very healthy bank accounts are looking for good prices and make use of financing.”
Looking towards 2013
The latter part of 2012 saw an increase in loans granted, albeit under more stringent conditions than before. Mortgages on non-bank owned properties – of which there are few here – are generally limited to 60% of the sales price, and the cost of borrowing and recapitalisation has forced Spanish banks to raise interest rates to 3-5%, yet the machinery has started working again.
Ben Bateman believes such factors play a supporting role but are not the main deciders. “You might have argued that the extra sales in 2012 came from such stimuli as the temporarily lowered VAT rate and discounted capital gains tax, as well as the impending increase in transfer tax, and the increased strength of Sterling against the Euro, yet the incentives no longer apply in 2013 and yet the rate of enquiries and sales has remained constant.”
As a result, he sees price remaining the principal determinant and believes the overall upward curve in sales will continue in 2013. “If they do, then you could be talking about the beginnings of a new growth cycle by mid-2014. Prices, however, will remain pretty much steady throughout this period, so I’m afraid there is no reason for vendors to relax and maintain high prices. Asking the right price if you want to sell your property in 2013 will remain sensible advice for some time to come.”
A quick note to the buyer in 2013
If you are looking to buy, what this all means to you, is that there could not be a better time, ” There is a good supply of quality property at very attractive prices and a good number of people, over the last year, have already taken the plunge.” Says Ben. ” I am confident that there are many more to come, I know of several buyers recently who have missed out on their dream opportunities.” Ben’s advice is therefore is to get your finances together, find a lawyer and get your paper work in order, so when you do find that dream property, at the right price, you can move quickly to secure it.
By Jackie Cruz - Manifesto ·