I first came to the Costa del Sol eighteen years ago; I should have done so a lot earlier when properties were at give away prices and could literally be purchased for a song. Had I done so then, I would be worth a fortune by now, even in the current crisis.
When the border between Spain and Gibraltar was re-opened in 1980 (closed since 1969), it was obvious that the attraction to live on the Costa would gain far greater popularity, especially in the U.K. Since 1980 Spain has seen the biggest rise in house prices in real terms, 124% equivalent to almost 4% a year.
According to an article in the Economist dated Mar 28th 2002:- If there is one single factor that has saved the world economy from a deep recession it is the housing market. So what happened? The sharp fall in share prices and companies profits, encouraged investors to switch their money over to bricks and mortar. The higher demand in properties and low rates of interest then created the wealthboosting effects of rising house prices that has lead to the bubble finally bursting all over the world.
Unfortunately for us, UK residents in Spain, we are being hit a lot harder by additional contributory factors. The narrowing of the gap between the value of the Pound and the Euro has made it difficult for many, dependent on a UK income, to maintain their standard of living and even keep up with their mortgage repayments. To make things worse, greed on the part of local authorities and other property intermediaries has contributed to pumping up realestate prices by more than 100%, alongside a massive build up of property stocks accounting for two-thirds of the housing units built in Europe between 1999 and 2007. According to the Bank of Spain, banks now hold about 60 billion of real estate on their books, due to repossessions and struggling property companies.
A prolonged recession and very high unemployment weighs on any hopes that Spaniards will be returning to the market soon, which leaves foreign buyers and investors to absorb the massive stocks, especially on the Costas where most of the building was rampant. All things being equal, we may have seen the bottom of the property price barrel, however DamoclesSword unnervingly still hangs over our heads making would be buyers wary of the fact that, should the banks flood the market with their stocks, standing at an estimated excess of around a million new unsold homes, similar to the much larger market of the United States, the markets depression would be pushed
Take all this away, whats left to make the Costa an attractive proposition? The warm climate is undoubtedly one of the major motives. Sunshine, Mediterranean coast, rivers, fishing, hunting, golf, all manner of sport, good food, cheap tobacco and drinks are all good reasons although I must admit that it is not as much fun as it was 20 years ago when you had to have a strong spirit of adventure to change
It just isnt quite the same anymore; however I dare say that everything has changed everywhere else too, which proves that Einstein was right with his theory of relativity. My only reservations is that moving to the Costa has been made too easy with the result that we now have far too many elements that really do not belong here; cheat elements attracted by the cheap booze, cheap tobacco and drugs. I hope that these difficult times of financial crisis are contributory to reducing their ranks forcing them to depend on the social support of their own country and I am not just referring to British nationals alone as my observation embraces Dutch, Germans, French and others nationals who
are abusing the EU trying to escape from the rigors of their own countries.