South Spain and its golden beaches have long attracted the British holiday maker with its varied package holidays. The most well known Costas are those that cater for the low budget package holiday market such as Costa Brava up along the Barcelona coast and the infamous Costa Blanca and Costa Calida along the Alicante coastal area. Dotted along the Costa Blanca coast you will find the high capacity package holiday centers 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. Benalmadena and Torremolinos are similar high rise package holiday towns to Benedorm, although in general the Costa del Sol is seen as Upmarket.
The good times.
The building craze was inevitable as the builders and developers of all types and sizes watched the yearly flood of British tourists pour into the South Spanish Costas. This massive influx of fresh foreign blood coupled with, at that time in Spain, easy credit availability sparked an almost lunatic building frenzy. It was easy to turn tourists into buyers. Holiday makers were going home after a great holiday with cash in their pockets and, unbeleivably, the deeds to their own Spanish holiday home? It was too much to resist and so they bought by the dozen and so the building craze redoubled in fury.
Non stop building.
Developers were confident. It took little effort to arrange off the shelf mortgages for just about anyone with a simple signature so sales were easy. With such easy sales and credit, the developers shifted up a gear in the building bonanza. With the fear of lining the entire Spanish south coast with high rise apatment blocks, the local governing bodies thankfully put a limit on block height. So now it was out instead of up and the developers spread the lower blocks accross acres of land like little towns. With sales looking so good and money easy to come by, the developers outstripped demand by creating ever bigger new projects. But with easy credit and a seemingly infinite stream of potential buyers they raced ahead in the secure knowledge of the fortunes that awaited..
The credit crunch
Then money dried up as the credit crunch took hold. The effects were sudden and far reaching with all major development brought to a rapid standstill. The cause was twofold. For one reason, as the large banking institutions failed so the once easy credit failed with them. Now many developers faced instant bankruptcy as major banking institutions began to call in the loans that were now tied up in real estate. 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. A second problem was the weakening pound against the Euro. This exchange rate crash removed one third from the value of any funds brought over from the UK, including pensions. The Pound falling and the interest rates rising made it suddenly very difficult to pay the mortgages and foredclosures started to move in.
Open for investment Cheap Spanish Property.
Repossession orders and foreclosures are sweeping through the Costas like a wild fire. The rows of empty apartment blocks have also brought the rental market to its knees. 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. It is now rich pickings for any investors who still have funding and, as always in the world of business, the crash has spawned a new and lucrative market – the Distressed Sales Market.
