SPAIN:There are keen prices galore on the Costa del Sol, as homes take years to sell, writes Kevin O'Connor
ALL ALONG the fabled Costa Del Sol, the prices are tumbling. From Gibraltar in the west, through such favoured towns as Puerto Banus, Estapona, Benalmadena, Fuengirola, through Torre del Mar and Torrox, to Nerja and Alicante in the east, property prices are about 20 per cent lower than at this time last year.
That's the official version given by estate agents. In reality, buyers with ready cash will fund a further discount from ready sellers.
In one town familiar to me, the rash of Se Vende (For Sale) signs are fading in the sun, having been up for over a year. In the Cadiz region, properties used to take on average three months to sell, now it takes two years.
Buyers are thin on the ground, while bargains proliferate. "If you have cash, you can own a three-bedroom villa with pool and garden for under €250,000," says one agent, familiar with prime coastal stretches either side of Malaga. It is not yet sub-prime.
In Malaga itself, a buzzy port city with a distinctly Moorish flavour, looking across to north Africa, €150,000 will get you a large dos dormitorios (two-bedroom) apartment overlooking the wide tree-lined Avenida Andalucia.
It's one of hundreds listed in Unicasa's current bulletin, whose cover is over stamped Rebajas (Sale).
Bargains galore, with buyers waiting for further price falls. Sound familiar?
Spanish banks have tightened up on mortgage lending, providing less LTV (loan-to-value) and penalistic higher interest rates. Their caution comes not only from the global downturn. For the past year or so, the local junta (government) has stared into coffers severely depleted by the fall in property taxes.
Much more dysfunctional than Ireland in dependence, the economy of the entire costa regions is based on property and aviation fuel prices.
Everything else - hotels, restaurants, golf, schools, hospitals - owe their existence to residential tourism.
State revenues from taxes, a combination of registration and VAT, have taken such a tumble that regional governments are bringing in special budgets, increasing taxes on property and have sliced community spending.
In the past fortnight, two leading construction companies have gone to the wall, while others try to stave off the evil day with all kinds of offers, ranging from holidays to full fit-out, to subsidies for children's education. A novel lure is rent-as-you-buy: your rental over three to five years on a property taken as a deposit on eventual purchase.
To little avail. Work has been abandoned on some large residential schemes. Two years ago, in what seemed the relentless "urbanisation" of "de Costa", daringly designed Legoland houses and apartments climbed up coastal hills and featured in cosmetic brochures of computer-generated humans enjoying life in the sun.
Virtual reality caved under - well, reality. Abandoned developments are fenced in, overlooked by static cranes and bored security personnel.
If all that sounds eerily familiar, spare a thought for the human dilemma of this latter-day Spanish Inquisition.
Over a million expat British and Irish live along this once-golden stretch. Most are owner-occupiers, facing the dreaded "negative equity".
Anyone who bought before, say, 2006, is now looking at a neighbour's property of the same vintage with the Se Vende sign saying it's available for about 15-20 per cent less than they first paid.
There is not much to do about it, as they will stoically tell you - better have negative equity in the sun than in rainy Birmingham or Limerick.
The inquisition has some historical Spanish features, such as uncertainty over existing title on some choice homes in choice locations, a product of cavalier planning and tensions between local government and central government in Madrid.
Old-style Spanish pride snapped at the carry-on of juntas along de Costa, with media coverage of 'Costa del Crime' and 'Costal del Golf' provoking the Mandarins in Madrid to send special investigative squads into Marbella and other towns.
The result of long surveillance and slow but sure justicia treatment has seen mayors of three towns spend time in the slammer and a radical overhaul of local planning policies.
Marbella, once capital of the golden miles, has shunted three of its mayors from villas to prison. In Spain, mayors have enormous personal, familial and planning power - now being urgently curtailed.
Areas previously permitted locally for mass building - mainly scrubland - have been retrospectively designated national parks by Madrid, spurred to outrage over corruption. Week-by-week, local papers feature yet more ex-pat pensioners in tears as their dream houses go under the bulldozer.
If all of that seems gloomily familiar, bear in mind a crucial climatic difference. Property may be down, but daily flights are full leaving this sodden island.
Aer Lingus regularly puts on its largest Airbus to cope with full loads on two Dublin flights a day to Malaga.
Add other airlines from the regions and you can reasonably assume around 16,000 passengers a week, ostensibly on holiday but a proportion of whom probably have cash in the back pocket, are chasing a property bargain.
'Rents up, Scandinavians buying'
WHILE agreeing with a price fall of 15-25 per cent on Costa properties in the last year, Geoff Chesire of Team Espana looks on the upside. "With sales down, rentals are improving as people wait to see how the market moves. Properties in good locations and condition are fetching higher rents." Team Espana has felt the slowdown from Irish and UK buyers, having a branch network of 400 in Britain.
"While our UK and Irish business is down, buyers from Scandinavian countries have filled the gap, probably because their banking system has not been exposed the way the British and Irish banks have been."
