Although double-digit price decreases have been observed in six of the provinces measured, most Spanish property vendors seem intent on maintaining a fictitious asking price – presumably to leave room for haggling.

Overall, the average asking price in Spain fell by 0.3% over the past 12 months, yet 10 provinces recorded a price increase – some as hefty as 17%.

Whilst the reasoning behind adopting this kind of pricing is questionable, these statistics are consistent with the figures published by the Ministry of Housing and the Institute of National Statistics for Q3 of 2008.

The figures from the Ministry are based on property valuations rather than sales and are therefore subject to the whim of the assessor and the motive for the property valuation. Their Q3 2008 figures show a slight increase in the national average price of property in Spain.

The National Institute of Statistics uses actual notarised sales figures to publish their figures – which demonstrate a 3% annual decrease by Q3 2008. However, even these figures must be taken with a pinch of salt because even the notarised figures do not account for the still-common practise of conducting part of the property transaction in cash.

Whether it’s notarised prices, property valuations or asking prices, each set of numbers hides the scope of the downturn in Spanish property prices. Personally, I believe that this lack of transparency is one of the fundamental causes of the property crisis in Spain – not a symptom of it.

Property vendors and their agents have the power to kick-start property sales by pricing properties to sell and being prepared to demonstrate an actual and significant reduction in their asking prices. Instead of asking vendors what sales price they want, estate agents in Spain can now drive the sales process by advising their clients of a realistic asking price – one which will attract buyers.

This week, I noticed the same property being promoted by a handful of agents between 385,000 euros and 280,000 euros. I also heard of a 3 million euros property sale where the price had genuinely been reduced from over 4 million. Spanish properties are selling when the price is right.

In lieu of consistent and realistic property pricing in Spain, and in the absence of reliable price data, my advice to buyers is to completely ignore the asking price and make a cheeky offer. This is the most productive strategy until vendors and agents price properties to sell, or a reliable set of house price data becomes available.

As a guide, consult the Kyero.com house price index for the area you are interested in – and start making offers at 30% below that level. What’s the worst that can happen?

Martin Dell, Kyero.com

It has now been statistically proven that the property market in Majorca is exhibiting some rather interesting trends, in stark contrast to recent years where villas were the most popular form of Majorca holiday accommodation purchase by non-Spanish residents and foreign nationals, it is now being witnessed that Majorca apartments and country houses are becoming the property of choice with foreign investors. It is believed that there are three fundamental factors influence in this situation.

1. Spanish lending establishments have recently completed bringing some innovative new products to the market, these products are designed to offer mortgage like finance for Majorca properties apartments and country houses, most of these products come with an interest rate that is far below the interest rate common to equivalent products in the rest of Europe, and therefore non-Spanish people who are taking up these offers of finance to buy Majorca property are finding their spending power can go much further.

2. Majorca country houses are becoming increasingly popular due to the fact that no other property type in Majorca has exhibited such a healthy growth in price in recent years, therefore they are deemed to be an extremely sound investment for the mid to long term. In effect people are treating Majorca country houses as a bank, tying up their funds from their own nation into a well performing property in an affluent area; they are safeguarding their capital during this time of economic crisis.

3. Apartments in Majorca are becoming increasingly popular due to the fact that for many people who previously would have considered one of Majorca’s fine detached or semi-detached villas, the price is now prohibited. Instead they’re feeling that they cannot risk a major investment during this time of worldwide depression, an opt in for a much cheaper option of holiday home or vacation property in Majorca by purchasing one of the cheaper, budget range of apartments. Additionally, many of these apartments form part of condominium complexes which again offer substantial savings on maintenance cost the owner.

As we can see, although the property market in Majorca is changing with apartments and country houses becoming the dominant type of property being sold, if industry figures are indicative Majorca will ride out the current global depression in the sunshine.

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1. Apartments are becoming popular again in Mallorca due to the global financial crisis affecting most of the world, people who were traditionally opt for a more expensive property of being forced to look at the lower end of the spectrum cost wise, as they deem a second home or a holiday home to be a luxury, and not a necessary expense. They are looking to conserve their capital during this economically stressful period, and therefore are purchasing small apartments instead of larger detached or semi-detached villas.

2. When it comes to country houses, it would seem that the opposite is true and that people are seeing this form of investment property to be a safe bet for the future. Historically country houses in Ibiza have displayed a higher than average growth in value each year, and therefore they make excellent form of investment for people looking to place their capital into a situation which will see a appreciate and not depreciate during this worldwide slowdown in the economy. In effect, people are looking at Ibiza country houses in a similar way people look at gold, as a safe investment that is unlikely to diminish in value and thus safeguard their funds.

3. The final affecting factor is felt to be the plethora of incredible new lending products which Spanish lending establishments are designed to offer mortgages to non-foreign nationals. Many of these lending products come with an interest rate that is far below that of government products in the rest of Europe, so non-Spanish residents are in effect getting more bang for their buck, allowing them to speculate on investment that will bring them far greater return than equivalent spending level in their own country would.

All in all, Mallorca looks set for a healthy period, especially in its property market, and doubly especially with regards to Ibiza apartments and country houses.

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It is believed that apartment sales are on the rise due to the fact that potential purchasers of Spanish real estate in Ibiza are wishing to spend less money, in the light of current economic situations in their own country. It is believed that these people would have been more likely to go in search of an Ibiza-based Villa in years past, but now they are forced to look to the cheaper end of the spectrum when seeking property in Ibiza. Apartments offer a more cost effective form of holiday accommodation in Ibiza, and therefore are a good choice for those on a limited budget.

When it comes to country houses, it is believed that an almost opposite situation is true. Mostly because of the very advantageous interest rates offered by Spanish lending houses, those people who can afford more expensive property are choosing to stretch their budget as far as possible, in the hopes that their capital will be safeguarded during this economic downturn. Ibiza country houses have historically been among those properties which have accrued in value yearly at far above the national rate. In effect, people are seeing Ibiza country houses as an investment that will safeguard their funds during this difficult economic time.

Analysts were quick to note that the entire Ibiza property market appears to be bullish, and that although the rise in property prices has slowed somewhat, it is still rising above the national norm, making all forms of Ibiza property not just Ibiza apartments and Ibiza country houses an excellent investment at this time. Time will tell if this region of Spain can sidestep economic problems faced by the rest of the country, although in light of these recent figures released it would appear that Ibiza has every intention of doing so.

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Majorca villas offer distinct advantages over apartments; often apartment will be in a large block we share amenities, obviously much smaller and less Private. Whilst in apartment maybe adequate accommodation for several weeks holiday, many of the ex-Patriots are finding that Villa gives them the space and privacy required for their entire family. Again, local commercial statistics tell us that Majorca villas are under development in many areas of the region. Many of the new Majorca villas form part of a condominium complex, and come equipped with access to a wide range of high-quality amenities such as golf courses, health spas and gymnasiums.

Majorca real estate trends also indicate that the property market as a whole within Majorca is looking extremely bullish, with property prices rising far above the national average. Again this is indicative of the fact that Majorca is now a prime expatriate destination, and this can be almost directly attributed to the fact that Majorca has done much in recent years to clear its reputation gained in the 1980s as a package tourist destination.

Local Majorca real estate agents are reported to be positions to take advantage of these market trends, with an ever-increasing amount of Majorca villas nearing the completion of construction in coming months. Real estate brokers in Majorca have also indicated that purchasers are beginning to lean more towards condominium managed properties for an outright privately owned holiday homes. Time will tell if Majorca can sustain this growth rate as the world struggles through the current economic slowdown, although figures suggests that in Majorca as always Sun is still shining.

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1. Mallorca is fast securing a reputation as a premier area of Spain in which foreign nationals can find a desirable and luxurious holiday home or second property at a reasonable price. Due to the fact that property prices in Mallorca over the last 10 years historically risen at a rate well above European averages, Mallorca is deemed to be not only a desirable area in which to own vacation property, but the property itself represents an excellent investment sure to accrue profit over the mid to long term.

2. Spanish lending establishments have recently completed the design and development of specialized mortgage finance products targeted at foreign nationals and non-Spanish residents. These innovative new mortgage products typically carry a much lower interest rate than equivalent products in other European countries, and represent a way for non-Spanish people to exercise the power of their money more fully, and secure themselves a desirable Mallorca holiday home into the bargain.

3. Mallorca has done much to clear up its old reputation as a package tourist destination, during the mid 1980s it suffered, along with other areas of Spain such as Ibiza, Majorca and much of the Spanish coast by being involved in many of the timeshare orientated business practices which have been deemed to have been somewhat shady. Modern day Mallorca real estate agents are fully aware that they need to treat foreign customers as valuable resources, and have invested time and energy into training their staff to deal with non-Spanish people an exceptional level.

Mallorca real estate sources tell us that a combination of these three situations has led to Mallorca achieving this desirable state within its local property market, and industry analysts believe that real estate prices in Mallorca will continue to rise in value in the coming years, representing an excellent way for foreign nationals to safeguard their capital, by investing in property outside of their own national borders during this time of global economic crisis.

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The primary reason given for this growth rate in the Majorca real estate market is the fact that Majorca is once again becoming known as an excellent location in which foreign nationals and non-Spanish residents can secure attractive holiday accommodation or second homes, which come with the added benefit of being an extremely effective mid to long term investment, one that has historically proven to reap profits even in times of economic strife.

If we couple this growing reputation with the fact that many Spanish lending establishments have recently completed developing specialized mortgage finance products aimed at foreigners wishing to purchase property in Majorca, then we have not only any area of extreme natural beauty, but an area with plentiful funding available for those wishing to purchase property. Many of these new, revolutionary mortgage products come with a much lower interest rate than equivalent products in the rest of Europe, allowing foreign nationals to exercise their spending power more fully, and procure themselves a stunning holiday home in one of Spain’s most wonderful regions.

It has also be indicated that the public have much more confidence in the Majorca property market as a whole, it seems that Majorca is managing to shake off the reputation earned as a timeshare Haven in the mid-1980s, and people have much more trust in the real estate agents in the local area. Many of the large agencies have gone to great lengths to ensure that their staff is all fully trained and experienced in dealing with non-Spanish property purchases; again this has done much to lend confidence to the Majorca property market. All in all, Majorca represents an excellent choice of location in which to secure a wonderful holiday home and a major investment down to reap profits in the future.

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If we consider that Majorca is still considered one of the most popular locations in which non-Spanish residents and foreign nationals search for a second home or some sort of vacation property, then we begin to realize that Majorca is in a fairly advantageous position when it comes to new property investment. Additionally, if we factor in the fact that many Spanish lending establishments have developed specialized products specifically to target non-Spanish residents who are interested in purchasing Majorca property, and that many of these mortgage type products come with a far lower interest rate than equivalent products in other European nations, it is easy to see why many folks would feel that Majorca property represents an excellent mid to long term investment.

Further analysis of the statistics released reveal that property trends within Majorca have subtly changed in the last decade; 10 years ago apartments were the primary type of accommodation which was purchased by non-Spanish residents, primarily for use as holiday accommodation for several weeks a year. Of course, due to the fact that this would not be their primary residence, the price was obviously the driving factor. Real estate agents in Majorca now tell us that Majorca villas form the most sought after area of Majorca property in recent times. We can deduce by this that more foreign nationals are spending longer periods of time outside of their home country, and they are beginning to invest in more family focused forms of Majorca property.

A final cause which may have done much to boost Majorca property sales lays in the fact that in recent years Majorca has done much to wipe away its old reputation as an area visited by package holiday tourists, and people owning timeshare. Majorca in 2008 is an exceptionally clean, well maintained area of Spain, and is clear to see why this is now becoming such a popular area, forcing property prices in Majorca to rise accordingly.

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This is surprising fact considering the rest of the world is suffering from a major economic slowdown, it is even more startling when we consider that many people would consider the purchase of a holiday home something of a luxury, and one would believe that these would be one of the first types of expenditure that would be curbed during this global financial crisis.

All types of Ibiza property seem to be accruing value steadily, from simple apartments in new apartment blocks which share amenities, through newly constructed villas forming part of a condominium complex, and restored farmhouse properties a little inland from the coast. All of these property types are still gaining popularity and exhibiting signs of maintaining the current price rise trend.

It is thought that Spanish lenders have done much to help this healthy situation come to fruition, many of the larger national lenders have developed specialized mortgage finance products especially suited to foreign nationals wishing to purchase property in Ibiza, Spain. Many of these mortgage products carry far lower interest rates than equivalent products in other European nations, making the acquisition of Ibiza property an extremely attractive investment for people wishing to safeguard the capital from degradation in this aggressive economic climate.

Industry sources have stated that Ibiza real estate brokers exhibit a huge amount of experience and knowledge when dealing with foreign nationals, and the Spanish property market especially within Ibiza has lost much of the stigma that was gained during the early 1980s and a timeshare fiasco. Indeed, many of the properties in Ibiza have been made available on prestigious condominium complexes, and come with luxurious amenities such as Olympic size swimming pools, world-class golf courses and impressively and impeccably maintained landscaped gardens. All in all Spain seems to be positioning itself as a major player in the expatriate property market, maintain its place as the number one destination in Europe for people considering expatriate life.

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This is a surprising revelation considering the state of the world economy, with most major Western nations seeing some form of recession to one degree or another. The reason for this is not completely clear, although it could be tied to the fact Spanish property has seen a larger than average rise in price in the prime coastal areas, making this an excellent investment and something of a safeguard in these troubled economic times.

Real estate agents in the prime areas are quick to point out that the type of property which is being sought these days is a little different from previous decade. Apartments were once the most popular type of property people wish to buy in Spain, mostly because they were going to be used as vacation accommodation for a short time each year, and the purchaser did not want to spend vast sums of money for such a Spanish property. Now it is reported that this trend has changed significantly, with newly constructed villas being the most popular form of Spanish property at this time. There has also being a rise in the amount of renovated farmhouses which are being offered for sale, this has bought a welcome boost to small rural villages away from the coastal regions, by injecting foreign capital into their struggling local economies.

All in all Spain looks to be a healthy option for any person who is considering Spanish property as a mid to long term investment. Additionally, many Spanish lending establishments have developed special mortgage products to suit non-Spanish residents, some of these come with attractive interest rates, making the purchase of Spanish property an even more attractive proposition. Time will tell if this trend will continue, although it does seem clear that the southern part of Spain is in a somewhat better position than the rest of the mainland.

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