Market Update: Where have all the Tenerife Bargains gone?
Hopeful property buyers with budgets less than 120,000 Euros expecting to be spoilt for choice have been surprised to find that they only have one or two real ‘bargains’ to consider. Though the general market can e said to have settled at a ‘good’ price, that’s not what these aspiring investors are looking for.
The Tenerife property market has proved to be one of the most resilient in the face of global recession, but unfortunate individual circumstances cause exceptions to the rule and it is these distressed property that form the bulk of the real ‘bargains’ on the Tenerife Property Market.
Recent activity on the market has been very concentrated on sweeping up the last of the lowest priced property bargains in Tenerife. A survey of all estate agents’ portfolios quickly reveals that the sub €120,000 bargains are becoming very scarce. Indeed, the shelf life of a particularly well priced property at this level can be less than 2 weeks.
It is natural that this price bracket is the first to feel the signs of resurging demand after a recession, and an important landmark for those who are waiting on the wings to buy property in Tenerife at the right time.
A ‘cheap’ property is easier to identify as a bargain, but that is not the only factor affecting
| What is a bargain? There are still properties for sale at less than 120,000, but not all of them are bargains. A bargain represents extraordinary value for money, and therefore its sale price will be substantially below market value |
demand. The banking crisis has also channelled buyer interest into price brackets where people need little or no mortgage to purchase.
Figures, from Spain’s National Institute of Statistics (INE), show there were 52,439 residential mortgages signed in March, an increase of 1.2% on the number signed in February, which in turn was slightly better than January. April and May are expected to show further increases, indicating that the flow of credit is slowly restarting.
The next logical stages for the Tenerife property market are rises in demand at increasingly higher price brackets. The bargains that you see today in the price bracket up to 250,000 Euros are likely to disappear at an accelerating rate.
Many in this wave of purchasers will be highly motivated by investment potential, even if that is not their primary reason for buying property in Tenerife: and they have good reason to be. Purchasing property at a discounted rate in a market that is rising is a no brainer and plump, ripe bargains are there for the picking.
Even while this is happening, the more experienced investors will be scaling higher up the tree, where the greatest rewards are to be had. This recession has affected people from all walks of life, but probably the best bargains are to be had amongst the luxury villas. There are rich pickings to be had amongst property prices that have been slashed by hundreds of thousands, and rental returns can be staggering.
So in summary, the market is full of opportunities. Those who are looking at the bottom of the market will need to be able to recognise a bargain and react quickly as these gems disappear within a very short space of time. Those with budgets over 150,000 Euros can still find a range of bargains to choose from, but as this becomes the focus area of market activity, these will soon start to disappear. The biggest discounts appear as budgets increase, with substantial savings to be made in luxury homes. If you are thinking about buying a property in Tenerife, it is a good time to do it now. Waiting until the market experiences its seasonal high in a few months will mean that there ill be fewer bargains to choose from. Good luck!
