SALES OF TOURIST PROPERTY PLUMMETS
The Costa Del Sol has in recent years seen one of the biggest property building and buying booms in Europe, but the local residents can now breathe a sigh of relief as it looks like that particular bubble has burst.
The Costa del Sol Association of Constructors and Promoters reported to the FITUR tourism fair which was held in Madrid last week, that overall sales of tourist property in the province of Malaga actually fell by around 50% last year to an historic low of 540 million euros.
As a result of this huge decrease in sales, in barely two years Malaga province has dropped from leading the real estate sector to the last place. That now puts it firmly behind Catalonia, Valencia, Murcia, the Balearics, the Canary Islands, Cadiz and Huelva.
In the same time period, sales in the province of Murcia increased by 125%.
The president of the Association, José Prado, told reporters there were many factors in play. The main one of these was surely recently highlighted corruption in Marbella, which has unfortunately generated a climate of distrust among purchasers, especially foreigners. He said, “If even today they are still talking about knocking down homes which obtained their construction licence, have their mortgage, and are registered at the notary, how would anybody dare buy a house?”
José Prado also criticised what he referred to as the enormous legal vacuum across the province, “Currently there is not a single new PGOU Urban Plan approved anywhere in the province, not even in its initial phase. Even if they were started now they would not be definitive for two or three years, and by that time we would be in crisis because of a lack of designated building land”.
In Malaga province, the number of new homes completed has dropped from 41,740 in 2005 to 29,450 in 2007. The fall was sharpest in Torremolinos (74%), then Estepona (73%), Vélez Malaga (44%), Fuengirola (44%), Mijas (31%) and Nerja (30%).
Bad news for the tourist industry was also announced at the FITUR fair last Friday. The main tour operators will have 20% fewer seats allocated on package deals from Britain to Spain this year.
This is a direct result of the increasing success of low cost carriers and independent travel. To add to an expected drop in tourist numbers, two of the four main travel companies in the package holiday market have merged. These companies insist that the reduction simply means an end to the old policy of excess offer and the number of travellers they attract will not fall by the same amount.
Last year, Thomas Cook merged with MyTravel and TUI merged with First Choice creating two much larger companies. Between them, they brought around 400,000 Britons to Spain in 2007.
Picture by G J Allen
2 Responses to “SALES OF TOURIST PROPERTY PLUMMETS”
By Mike on Feb 14, 2008 | Reply
Interesting to learn of other areas affected by the boom bust in real estate, especially from here in the US where we get so little exposure to international news.
This part of Florida may be seeing a market bottom but still not much sign of new demand, except perhaps from Europeans with the exchange rate so favorable.
U.S.A. On Sale - 40% Off!
By Terry on Feb 15, 2008 | Reply
If this had been a couple of years ago I would have said you’d better be prepared to be inundated by Europeans, especially the Brits because they were on a property high and had money to burn.
But now, the bust is affecting everywhere in Europe and no one is speculating anymore. They’re all too afraid they might lose money on property deals and they’d be right - the time is not to sell as you’d lose too much, but in a few months it will e a buyer’s paradise with falling prices and homeowners desperate to sell will accept much lower than their property is worth.
Now all I need is a few hundred thou…