It’s official – the 13th consecutive monthly fall in the Euribor has made what was considered a basic, stable and good looking rate of 5.26% just over a year ago now seem punitive. At the current 1.23% that’s a 76% drop. Imagine that! And with the right property now marketed anywhere between 20-30% below the peak prices of 2007, the correction in the market is just amazing.
I recently took a client to see an apartment in a Marbella development for €225k – I remember the self same units being bought in a frenzy in 2005 for an average price of €325k as they were considered to be the best deal on the Coast!!
But then, who was to know what was to come? If those units had been for sale in 2000, they’d have been around €225k. Who was to know that, just as we’re entering a new decade, you can buy these units for practically the same price as at the end of the last one.
Had I offered a buyer in 2005 a €100,000 price reduction and an interest rate reduced by 76%, well, “Died and gone to heaven†would apply – an amazing deal back then. Perhaps an amazing deal today as well?
You see, the market can only go so low. Central Banks are doing everything possible the world over to revive the global economy, and there comes a day when the balance tilts back upwards and the low point is gone.
Are we there yet? I think in some cases yes, in others no. It’s always been about the right deal, and the right properties are indeed selling. This will lead to recovery in prices and the upward swing starts all over again. What will that €225k be worth in 5 years time I wonder?
They said you’d have been mad to get into the stock market a year ago. How wrong they were! How right might the decision be to get into the property market at the low point and at what risk now of further falls? Well, in my opinion not much of a risk – with the Euribor where it is, for sure we’ll see property prices start to rise again.
It’s little wonder my client – who bought said unit at 210k (yes, after a further reduction of €15k!) – told me he’d won on the stock market and was cashing this in for an investment in the property market. Why not – it’s not been as cheap to buy for 10 years!
Finding the right property is absolutely key – look for quality and a proven price fall, and perhaps that tired old estate agent’s maxim will come again… In real estate you don’t wait to buy, you buy and wait† Well that’s one opinion anyway!
