Almost half of the Costa del Sol´s new development properties sold in 2011!
It’s the beginning of the year and the numbers and statistics start to come in. According to the Association of Builders and Developers of Malaga
(ACP) more than 10.000 new homes have been sold in the province in the course of 2011! This is almost half of 25.000 new properties available at the start of 2011 in the province!
There are three main ingredients in this recipe for success:
First, the continuous reduction in property prices which has taken place since the end of 2008. In the past three years or so we have seen price drops between 35% to over 50% in certain developments on the Costa del Sol. This has made luxury properties in popular tourist areas like Marbella, extremely affordable and thousands of buyers from Northern European countries are taking advantage of this.
Secondly, many of these new development properties are being sold with extremely high finance, sometimes up to 100%. On top of this, this high finance is available to residents and non-residents alike. In the resale market, non-residents can obtain around 60% of finance on a property, while residents about 80%. New properties are extremely popular amongst those clients wanting to put as little liquidity as possible on a property.
Thirdly, in August La Moncloa (Spanish Government), in an attempt to boost sales has temporarily reduced the VAT on the purchase of new homes from 8% to 4%. This means that any person purchasing, for instance, a €300.000 property saves €12.000 on VAT.
Considering the construction cycles, many developers start to believe that if this trend continues there could be a serious shortage of new housing in a couple of years. The situation could even get worse if we return to the normal levels of 2007, when over 20.000 new properties were sold in the province a year.