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So you´ve seen that fabulous Spanish villa in the hills. You´ve been told that it was previously priced at €500,000 and you´re aware that it was ´recently´ valued at €450,000
It´s now on the market at €295,000 and the owners are desperate to sell.
AN ABSOLUTE STEAL FOR THE PRICE!
Too good to be true? Are we really about to buy a property in Spain for €295,000 that is actually worth €450,000? Possibly…..but highly unlikely.
Before committing to the purchase and biting the hand off that convincing estate agent, let´s ask ourselves a few questions:
- When was it priced at €500,000?
ANSWER: In 2007 (at the height of the Spanish property boom)
- When was the valuation done?
ANSWER: In May 2008 (before the credit crunch and before prices began to crumble in Spain)
Now that we have addressed those two issues, we have to work out what it is worth now – in today´s market. Clearly not €500,000 and nowhere near €450,000.
Is it worth €400,000? Probably not.
Is it worth €350,000? Tricky, but again it seems a little on the steep side.
This is where it gets difficult. With prices going down, you have to assess how much the property is worth. To be honest, nobody is probably sure, so it rests with you to make that call – how much is that villa in Spain worth TO YOU?
Maybe you think that €295,000 is a realistic asking price in today´s market, in which case can it really be called an ABSOLUTE STEAL? No…..it´s simply the right price for this particular property.
So let´s stop getting excited about all this talk of discounts and bargain prices. It seems that the adjustments taking place in Spanish property pricing are simply leading us to a more sensible and accurate portrayal of a struggling market.
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