In recent years we have got used to the fact that Spanish property is cheaper. So many people think that they can buy a spacious house on the Spanish coast for almost a penny. News portals are full of reports about another collapse in housing prices, and television broadcasts stories about youth, that is massively leaving the Old World and travelling to the New in search of work. Is it real?
Who can clarify the situation, which primarily is reflected to the economic situation in the country, better than the real estate market experts?
ee24.com discussed the pros and cons of purchasing property in Spain with the experts, that said: "If you like something, buy it, do not wait! There is a possibility in Spain, so use it well!" However paradoxical it may seem, Eduard Gulyan, managing partner of SeaBestLand, and Iain Tozer, CEO at SeaBestLand, have compelling reasons for buying property in Spain. They are calling to buy right now, arguing that the optimal moment at last has come. We bring you the exclusive interview.
Spain is like your second home
- Many Russians dream of moving to Spain and only Spain. What attracts them so much, what is the fundamental difference between Russia and Spain?
Eduard Gulyan:
- The Spanish market today is a market of opportunities. For example, large entertainment cities are being built now near Madrid and Barcelona. Investors decided that now it is the time to go to market. Even Bill Gates, known for his pragmatism, is involved in these projects.
In Spain, you feel completely comfortable in terms of business. We are not afriad of permanent tax checks and fire inspections. An accounting company works with our documentation for only a one third of the salary of the Moscow accountant. Unlike the Russian auditors, Spanish accountants bear the full responsibility before the law. They sign an agreement, that they are responsible for all the errors in their calculations.
Personally, I'm always eager to visit Spain. Let me explain with a simple example: in Moscow, I 'm going for lunch to satisfy hunger, and in Spain I'm just like a child waiting for dinner because it is stunningly delicious. There are 24 Michelin restaurants next to our office in Barcelona. I go there on foot, and on the way I can swim in the sea.
In Spain you live every minute and every second. Not between birthdays and corporate events, but literally every second, and this is the fundamental difference. We offer not only the real estate, but also a lifestyle, a history and a culture.
The contrast with Russia is obvious. In one Spanish restaurant after dinner I once asked the waiter about how he was doing, how long is he working there. He said that he is not working, but enjoying his life. Can you imagine something like that in Russia?
- How friendly is Spain? Is it difficult to obtain documents, visas, residence permit there?
Eduard Gulyan:
- I am the only foreigner in our village, located 20 minutes from Barcelona. I made an appointment with the mayor. When he found out that I have an academic degree, I was enrolled in a special table. I'm not sure that in Russia without 3-4 calls, without useful contacts and relations, the mayor would take up this matter personally.
Neighbours in Spain will be watching you for a long time, but after about six months they become completely open. You can come to the store with no money and buy anything, and they know that within 2-3 days or a week you will bring the money. And it is absolutely normal.
What is the difference between the Russians and the British
- What can you say about Russian buyers, what are their features?
Iain Tozer:
- Russians to some extent are similar to other northern Europeans. They want the sea, sun and fun.
But the biggest difference is that the Russians have an idea about where they want to live and what they will do there, while other foreigners refer this issue more generally. Britons want to move to Spain or Portugal or Italy ... It's nice to see that the Russians are looking for real estate in Spain just because they want to go exactly to Spain.
Another fundamental feature is that Russians decide very quickly. They come to look at the property, they like it and they buy it.
- What is the most interesting thing to Russian investors in Spain? What are they buying?
Iain Tozer answers :
- It depends on the buyer. As for the cheap real estate on the Costa Blanca near Alicante, there is an oversupply, so the Russians have a very good opportunity to buy a great property for an attractive price there. The same applies to the Costa Dorada. Real Estate of the middle price level doesn't have such a large surplus of proposals. As for the luxury real estate, the offer is very small.
Spain attracts Russians, because we have a good health care, traffic safety, good relations with Europe, as Spain is the part of the European Union. The Spanish economy declined, but in the past month the authorities have officially declared that the country emerges from recession. The present moment gives ample opportunities for investors. It's no secret that it is very profitable to invest in the market at the time of its growth.
Spain emerges from recession
- What is happening now with the prices on the Spanish property market?
Eduard Gulyan:
- In my view, and this view is supported by the current practice, one and a half years ago the good properties ceased to fall in price by some reasons. Catalonia, for example is a very rich region. If the huge discounts are offered, than it is usually the unsuccessful projects or emigrant districts. Of course, you can find accommodation in Barcelona and Catalonia for the price of €30,000 to €60,000, but it will be either the "destroyed" or unclaimed by investors property.
All good commercial areas with a guaranteed margin of 6% are being sold instantly. There are lots of investors in Barcelona that track such projects.
For example, I wanted to buy 10 apartments in the area of Port Aventura, but did not manage to. Their guaranteed profit from the managing company is 6%. Such objects are being sold immediately. We usually start from the profitability of 5%, if it reaches 8%, than we are very happy, and 8.5% just gives us a real pleasure.
The property market in Spain is working, the government announced the end of the recession, and the European Union has confirmed it. But we already knew about it and felt it.
The market is very different. There are huge complexes in Costa Blanca, without infrastructure, where prices continue to fall, and there are highly demanded objects in Port Aventura, 40 minutes from Barcelona, with a guaranteed income. They are being sold immediately and do not remain on the market. The last deal was when a Russian investor bought 60 apartments at once. So Spain is on the rise.
Iain Tozer:
- Many Realtors reported that sales have reached the level of 2007. This is one of the indicators of the market. Now the market is much more active than in 2011. Over the past 4 years there were no deals with homes on the stage of construction.
And now for the first time in 5 years, properties on the stage of development appear in the market. This is an opportunity for investors in places such as Costa Blanca, Costa del Sol and Barcelona. Properties, that you could buy in Barcelona only for €300,000 three or four years ago, now you can buy for €200,000, however, you wil not be able to enjoy your property until 2015.
If we talk about the outlook for the next few years, we have had 6 years of recession, and now, I think we are waiting for 5-6 years of stability and smooth growth of prices.
Where is the most valuable property in Spain
- How do you see a portrait of today's buyer of property in Spain?
Eduard Gulyan:
- In my opinion, there is a fairly clear segmentation. I know a lot of people - friends and acquaintances, that moved from Monaco to Barcelona. Children grew up, they need good universities, art, culture. Barcelona is the capital of the Mediterranean, there is no better city. I know when people move from Marbella. They usually have budgets above 3 million.
As for the mass market, today it (especially Costa Blanca) is absolutely projected. These are the people who repeatedly visit Spain, who know that it's the civilized Europe. Having a small cottage or an apartment in Russia, these people realize that they are doing a good purchase for the similar money. By the way, the primaryapartments in Spain are always fitted with a kitchen and bathroom.
In the terms of taxation, if we compare such European countries as France and Italy, then Spain has a huge advantage. French and Italians themselves are actively buying property in Spain. In the area of Costa Brava, at the French border, there are no transactions below the €700,000. I know it, because we communicate regularly with partners.
The middle segment is very active - €300,000 — €400,000. These are the people who understand the ways of the real estate market in Russia and can compare it with the Spanish real estate. An average market is predictable and affordable.
The small amount of transactions on the secondary housing, that cost tens of millions, also occurs. This segment usually has long been stabilized. In the upper segment there are fewer trades, of course, but they are. Most recently in Barcelona a hotel was bought for €200,000,000. In terms of commercial real estate there is very active movement, and the residential real estate market reached stability. Commercial real estate, I repeat, behaves very dynamically.
As for the territories, the Costa Blanca has cheap and affordable accommodation, Marbella and Barcelona have fine property.
Top secret: what would be the trend next season
- The real estate market is linked to the economy. Economy comes out of the crisis, the real estate market is not far behind. How do you think, what property, what regions of Spain will be popular in the near future?
Iain Tozer:
- I think that just the fact that Spain is officially getting out of recession, does not lead to the stabilization of the real estate market. On the contrary, I believe that the way out of recession is to some extent a consequence of the stabilization of the real estate market. As you said, the real estate market is linked to the economy, and now the Spanish property market has reached a certain stability and helped to improve the Spanish economy.
Growth in the real estate market will not be swift and smooth and stable. We see that now even conservative funds from markets such as London, are acquiring large property portfolios. I'm talking about such large funds like Cerberus. This indicates the expectations of long-term stability.
If we talk about the statistics of the number of purchases, than the Britons buy the most of all. The Russians are the second, but they moved there from the seventh position just in 3 years. I'm not sure that the Russian market will surpass the British, because the British market is 4 times larger, and in addition the UK is closer to Spain.
It is hard to tell where people will buy property in the future, in which still unexplored areas. The UK market has an interest in projects in Almeria, in southern Andalusia. Until 2007 this area was actively developing until the crisis has not stopped the developers. Almeria may be an area that will grow rapidly in the next few years because buyers appreciate competent development. You know, many people say that they do not like how some parts of the Costa del Sol and Costa Blanca are built up, there are too many buildings. I think that in the future the less built-up areas will be more popular.
And again, no matter what, I do not think that in the future people will settle in Spain too far from the coast.
Time to buy!
- How would you convince a customer to buy a property in Spain with one sentence?
Iain Tozer:
- Spain now offers excellent opportunities. I would advise to buy now because the market is growing: if you like something, buy, do not wait! In Spain, there is a possibility, so use it well!
Eduard Gulyan:
- One should not treat others in ways that one would not like to be treated. I follow this covenant. I would not deal with real estate in Spain, if I didn't believe that this is correct.
Englishmen are the number one in Spain. And how many Spaniards buy in England? Millions of Englishmen simply can not be wrong. Save up money and buy. While it is possible, it is necessary to acquire real estate in Spain.
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