Fast Drop - Gran Canaria Real Estate Prices

Published: 04th June 2009
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Owning a second or what is often known as a vacation home overseas for many British people has been an aspiration achieved by many since the early 1980's, when the UK allowed the free flow of capital, and property price gains allowed many to sell up in Britain and move to Spain and her islands - Gran Canaria for example.

A slow down of Brits buying abroad happened in the early 90's when recession hit the country, but overall the pace of number of people buying a home and often buying a business too has been relentless.

And with a growing number of British moving abroad, the UK's financial infrastructure followed them, with British banks setting up branches in Spain (ironically some of the British banks have now been taken over by Spanish ones), mortgage companies tailoring products for overseas home purchase, and insurance companies offering building and contents cover.

For many of the British buying in Spain, it was like Britain with sunshine.

But times have changed, Spain is flooded with unsold brand new and re-sale properties, and property prices have crashed. In Britian property prices have dropped and are expected to fall further for the next year or more.

Confidence is low - unemployment in the UK is expected to hit 3 million before it peaks, and people with some money who might ordinarily have considered buying a property abroad are often keeping it in assets where the money is easily accessible - something it's not when tied up in a property during a recession and they opt instead to stay in one of the hotels in Gran Canaria while visiting for a holiday.

And of course the financial infrastructure that supported the British buying homes and businesses in Spain and her islands is in full retreat. The banks who were lending money readily to Brits moving abroad aren't lending much, and many of them have been bailed out with taxpayers' money - overall a dismal picture of a once flourishing overseas property market.

So, is now a good time to buy in Spain? If you've always fancied an apartment or villa on glorious Gran Canaria - is this the time to take the plunge?

Part of that answer depends upon your individual financial circumstances, but if you need to borrow to buy a second home, and if you need income from holiday rentals to sustain your new Gran Canaria property...halve the figure you think you might achieve and re-calculate to get closer to what you might realistically get from renting out to those taking Gran Canaria holidays in today's market.

But if you have a surplus of cash and are ready to buy a property in Gran Canaria - is now a good time to buy?

There's a property glut in Spain. If property was water, Spain and her islands would be renamed Atlantis. Developers and private owners alike are more than keen to sell, and anyone who is a cash buyer won't have to wait long before they see a bargain. But don't necessarily buy the first property you like that seems good value.

Draw up a list of say three or four apartments or villas you have viewed and liked and put in an offer of around sixty per cent of the already discounted price, starting with your favourite one, telling the owners that the offer remains good for two weeks, and at that time you will look elsewhere. Within a couple of months you, perhaps even weeks, you could have the property you want at an amazing price, even if the owners come back with a counter offer.

One bit of advice from UK based Tribune Properties is to avoid buying a brand new property.

'Only buy a new property on Gran Canaria if you're absolutely certain that the developer has the funds to finish off a development and the promised infrastructure that goes with the new development...and even then only spend what you can afford to lose. Guarantees are useless if a developer goes bust. And just don't buy a property under construction - the development could be mothballed for years to come - along with any deposits and staged payments already paid by a buyer.'

Their final bit of advice is not good news for Gran Canaria property developers either, or for private re-sales.

'If you can hold on a few months, you might find even better bargains than there are now in October and November when the same owners who are selling now have failed to find a buyer and want to move in early 2010 before the holiday rental season starts again.'
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Information about Gran Canaria including flight times and the prices of Gran Canaria flights are available at yourgrancanaria.net

Holiday companies and tour operators who offer cheap holidays in Gran Canaria are included and another resource is the Spanish island's climate and Gran Canaria weather forecast

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