Saturday, July 07, 2007

Downturn in prices

A report in the Costa Blanca News says that downturns in resale house prices have been recorded in Torrevieja and Orihuela, as well as in the Mar Menor area.

The largest fall – a drop of 3.65 per cent – was recorded in Orihuela, with a less pronounced decrease of 0.44 per cent in Torrevieja. In Murcia reductions of 2.36 per cent and 3.37 per cent have occurred in San Javier and Los Alcázares respectively since January 2007.

The research has been carried out by the specialist internet site which receives more than two million visits each month.

The slowdown in the market has also made construction companies cautious about increasing the prices of new homes. Alicante builders’ association Provía revealed this week that 80 per cent of construction companies have said they will not put up prices. And over half of Provía’s members revealed they will not launch any new projects for the time being.

They have cited large investments in current projects, a lack of land for building and an unstable property market as the most important reasons for this.

According to Provía’s report this week, just 15 per cent of builders think that their sales will increase. And Antonio Navarro, president of Vega Baja builders’ association Procosta, admitted that building in the area has been suffering a crisis since 2006.

According to Sr Navarro, the causes are the increase in mortgage interest rates and the bad image of the area in the UK.

“The Costa Blanca was a nice and quiet place to live ten years ago,” he said.

“Now it is an area with many problems because of the thousands of people looking for jobs.”

Procosta’s president also stated that property prices had trebled in the last ten years, though the building companies have seen their profits reduced in the last two years.

And he said town halls in the Vega Baja must come to an agreement to promote the tourism industry.

“The building and the tourism industries have been creating far more job opportunities than any others,” he said at his fortnightly meeting with the media.

This is a major problem for Bigastro where 50% of the workforce are employed in construction. The ruling PSOE party are keen to promote tourism in the town which is why they supported the aparthotel project at the Pedrera.

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