The real estate situation in Europe is quite unusual, and Spain's is particularly so. Indeed, with the real estate crisis of 2007-2008, many banks have foreclosed on properties in Spain. In 2024, Spanish banks are said to have around one million properties, including a number on the Costa Brava, houses and apartments that have been written down by 40%.
So, bargain or not? How can you avoid the pitfalls of low real estate prices?
Here's a closer look at what could turn out to be a good idea.
Understanding bank foreclosures in Spain
Since the beginning of the 2000s - well before the subprime crisis - Spanish banks have been somewhat imprudent, and new urbanization programs have followed one another to the point of creating entire cities in the desert.
And it was necessary to be relatively flexible on borrowing conditions in order to sell these famous real estate projects, and this is how many middle-class Spanish households were able to become homeowners, sometimes borrowing up to 50%.
The consequences were not long in coming: as the years went by, payment arrears accumulated and the number of foreclosures literally exploded.
A good deal that can be negotiated
With property prices discounted by up to 40%, there are still some bargains to be had, particularly on the Costa Brava, whether in Empuriabrava, Sitgés, Lloret del mar, Blanes or Rosas, for example. Banks are keen to get rid of their cash-costing foreclosure inventory as quickly as possible.
For a French household that wants to invest in stone by buying or renting a villa with a pool, it is possible to contact some banks to see if a property corresponds to their desires.
If the bank that foreclosed and the one you want to borrow from is the same institution, this is even the best strategy to adopt because you can find collateral facilities.
The other way to negotiate this type of real estate seized by a bank is to open a current account, funding it monthly to cover maintenance expenses.
Then, you can ask this same bank to make an additional gesture on the price of the property in exchange for the subscription of a home insurance for example.
Even a property seized by a bank can and should be negotiated, so don't hesitate!
Previous owner's expenses
Bank foreclosures on properties on the Costa Brava have generated considerable charges. These charges are mainly linked to the former owners. These costs have increased with the addition of litigation costs, legal fees and interest on unpaid debts.
However, according to Spanish regulations, these must be borne by the new buyers. This contrasts with the situation in France, where it is permitted to buy a property that has been subject to foreclosure without paying the old charges. This situation can only further complicate the resale of foreclosed properties.
The total number of foreclosed properties is close to one million. It's easy to buy a foreclosed property, thanks to the substantial discounts applied to the initial value, but buyers can face a number of complications. To avoid this, they need the guidance and support of a real estate agency.
Minimal purchasing assistance
Minimum purchase is a procedure whereby seized goods can be sold at very low prices. However, these purchases are complex for the uninitiated. If you're looking to buy a home on the Costa Brava, N1 France Espagne Immobilier can offer you valuable assistance in your search.
Our agency has extensive expertise in the Costa Brava market.
When you choose N1 Immo, you choose a completely different process from the way Spanish banks operate. The latter only focus on how to get rid of their stock of foreclosed properties quickly. What's more, they won't provide you with enough information on the management of your property or on nearby urban development projects.
Looking to buy an apartment or house on the Costa Brava? Call on our agents!