Whether you enjoy an annual holiday on the Costa del Sol or you rent long-term and are thinking of buying a property, there is no better time than now.

´In the middle of a recession?´ I hear you scream. But look at the facts. I worked for a large estate agent for over 5 years on the Costa del Sol and I can confirm that house prices now, in many areas, including Marbella, Fuengirola, Estepona and even, Puerto Banus, have dropped, on average by 30%.

If you are looking for resales, you can find many distressed sales up to 50% cheaper than they were advertised 18 months ago. I live in Mijas-Golf and apartments are being offered for sale at the prestigious La Cala Hills Complex from under 200,000 for a two-bed apartment, where prices were reaching €300,000 for similar properties a couple of  years ago.

La Reserva de Marbella
La Reserva de Marbella is another case in point. Situated east of Marbella town, and 1km from Puerto Cabopino, agents are now advertising resales of two-bed properties here from just €175,000, when the original purchase prices from the developer was much more than this. And bear in mind, these prices include estate agent´s commission, so if you manage to get a private deal, you can reduce the price even more.

I have lived on the Costa del Sol for 16 years (God that makes me feel old). I rented an apartment for a few years in Cabopino and then bought a small apartment in Mijas-Golf. Since then, the recession has hit hard and everyone has had to dig deep to keep paying their bills and their mortgages. So why buy on the Costa del Sol in the first place? Apart from the 320 days of sunshine a year (the remaining 45 days of rain have surely fell in the last ………. um ………….. 45 days), there is so much to enjoy on the Costa del Sol, that it´s no surprise nearly 1,000,000 British ex-pats have chosen to live here.

Owing to various changes in the property market in Southern Spain and the UK, many prospective buyers can now find some amazing bargains on the Costa del Sol.

Only two weeks ago, a 3 bed, 1 bath apartment in Calahonda with communal pool and private garden was on the market for just €99,500!!

Five or six years ago, many investors made fantastic profits from buying properties off-plan, before they had even started being built, and then flipping them (selling them on) before completion.  This is not always the case and owners are increasingly having their properties repossessed by the developers when they cannot complete on the purchase, or selling on at well below their original purchase price to try and claw some money back.

The beauty of buying now on the Costa del Sol is that you have such a wide choice of properties to choose from, many at bargain prices, that you can take your time to look around and not be rushed into anything.
With increased internet and television publicity, off-plan investment was easy to understand and became easily available to the general public who may have previously never considered buying property in this way.

Off plan property concept
The off-plan concept was to buy property with developers offering a discounted price if the investor exchanged at planning stage (before being built). Many investors bought with the sole intention of selling 2 years later at an increased price of approximately 20-30%. With investors only paying 30% before completion, returns were very profitable. The benefits of the investors selling before completion were that tax and completion costs, could be avoided.

However, with so many investors trying to sell properties in each development, at the same time,  the market became saturated on that particular development.  This results adversely on their selling price.  Therefore, many investors have now decided to keep their properties and let them out, and gain some income to go towards the mortgage costs. The properties can then be put up for sale when the market picks up and the vendor will achieve a better price.

Distressed and repossessed property Costa del Sol
This means there are a wealth of distressed and repossessed properties for sale on the Costa del Sol.
In many cases, investor´s circumstances may have changed drastically and, in most cases if they cannot complete the payment on their properties, the developer will not only repossess the property but also keep the 30% deposit which the purchasers will have paid at the outset.

As always, there are two sides to every coin, and there are now many bargains to be had in and around Marbella and the Costa del Sol, which is quickly becoming a buyers dream. Often properties are selling for up to 30% less than their market value, and although buyers are not exactly flooding back to the Costa del Sol, there is definitely an encouraging trickle.

A distressed sale does not mean there is a problem with the property, but simply that the vendors need to sell quickly for financial or personal reasons. English speaking lawyers are also on hand throughout Marbella and explain all of the ins and outs of buying property in Spain.  Many of the distressed properties are now built with occupation licences and can be viewed immediately. For a complete and up to date list of distressed property sales on the Costa del Sol please click on this link.

When a developer completes a project, he has no alternative but to foreclose on uncompleted sales. Occasionally, units which have been repossessed by the developer will come back on the market.  As the developer will already have retained the original 30% deposit from the buyer who has been unable to complete, he will often let the repossessed units go at the same price as they were 2-3 years previously. These properties, particularly in Marbella, are an investors dream, and usually sell within weeks if not days.

Personally, I would advise against buying off-plan if the property is not complete and all licences in place,  and instead look around for your perfect resale property in an established complex. Although Marbella town hall has cleaned up its act, big-time over the past two years, there is still a certain nervousness about buying off-plan property. There are plenty of prestigious, and well-established complexes in Marbella, Puerto Banus and other areas of the coast where you can find properties up to 30% cheaper than they were a few years ago, with all licences in place.
This is the perfect time to invest in Marbella, and there are hundreds, if not thousands of bargains to be had.
by Jane Love (janelove1@hotmail.com)