© The Financial Times Ltd 2016
FT and 'Financial Times' are trademarks of The Financial Times Ltd.
The Financial Times and its journalists are subject to a self-regulation regime under the FT Editorial Code of Practice.
June 28, 2013 7:27 pm
On Andalucia’s southerly Costa del Sol there are identikit high-rise apartments overlooking packed beaches and bars selling cheap German beer and full English breakfasts. But drive 90 minutes north of Malaga to Granada, then another hour east into the Sierra de Segura mountains, and it is a very different Andalucia.
Here you find low-lying green plains and steep copper-coloured mountains with only a scattering of small towns and tiny villages. Few villas have swimming pools, there is no golf course and English is rarely spoken. Outsiders are rare: two per cent of homes in this part of Andalucia are bought by foreigners compared with 40 per cent on the coast.
But the few overseas buyers have a choice of homes that are good value thanks to the Spanish housing crash. The most unusual homes are hardest to spot, not because they merge into the scenery but because they are the scenery itself. Many of the mountains here are private hunting estates boasting wild boar, deer, goats and mouflon, a type of wild sheep with horns. Several of these estates are for sale, some by families whose younger generations do not want to maintain vast tracts of land, and others by businessmen who bought at the top of the market a decade ago and now want – or have been forced – to cut and run.
These estates are up to 2,500 acres with densely wooded mountains up to 6,000ft high. Some hunting lodges are merely bothy-type refuges but others are grand 18th or 19th-century houses with up to six bedrooms. However, there will often be no electricity or gas, and water available only from spring pipes dotted around the estate.
“In this part of Andalucia Spanish owners, even of estates, put them on sale without using estate agents. They don’t trust them and don’t want to pay fees. Instead, they put up signs with a private telephone number,” says Ailis Hannaford, owner of Cien Services, a local property-finding and facilities management firm.
One estate on sale through Hamptons International is Umbria More comprising three houses with 1,000 acres, 30 minutes from the town of Baza, which is on sale for €2.5m. Twenty minutes away near the town of Huescar is El Collado (€3.5m through the same agent), which has 1,970 acres, partly given over to almond plantations and farmland.
Values can rise by up to 100 per cent once estates are modernised, typically by restoring the villa, laying a road to replace the dirt track and adding mains electricity, piped water and sometimes a helipad. One example is La Noguera (€4m through Spanish Inland Properties) with its two new houses, with a total of eight bedrooms, electricity substation and 1,300 acres. It has a small bullring – a sign that some of these estates are owned by celebrity bullfighters who can match top-flight footballers and Grand Prix drivers with their passion for trophy properties. Refurbishment can be expensive but one compensation is that local agents say estate prices have fallen up to 40 per cent since 2007.
The Spanish downturn has also created eccentricities like the abandoned hamlet of Pueblo Los Belgas, a cluster of 11 buildings – a small century-old chapel, a 1970s school, a bar, barn and seven early 20th-century houses – in natural parkland near Baza.
This too needs substantial modernisation so is hard to sell because even niche developers – who in happier economic times may have turned this site into a hotel – now find it hard to secure funding. “The hamlet has been on sale for several years at €950,000 with no takers. The seller, like many in the area, sets the price. But he is now happy to take offers,” says Sean Lummis of Spanish Inland Properties, a partner of Hamptons International.
More unusual, and considerably cheaper, are the startling “cave houses” which pepper the hillsides. These 150-year-old burrows, originally for farm animals, typically have three to 10 rooms. Before the crash, well-equipped caves would fetch €250,000 but a three-bedroom example in Benamaurel village is selling through Real Estate Rusticom for just €39,000.
In the so-called “white villages” prices are down 40 per cent over six years. For example, Galera, 140km northeast of Granada, is a pretty, historic settlement of 1,100 people. A small two-bedroom house here is €35,000, while a modern four-bedroom villa with garden is just €250,000.
“These sorts of communities have survived because they’re not totally reliant on foreign property buyers” says Lummis.
The wider Spanish economy remains bleak, however, partly because of a stubbornly high stock of unsold new-build homes.
Moody’s, the rating agency, says unsold new-build Spanish housing stock rose from 195,184 in early 2006 to 688,044 in early 2010. Another rating agency, Fitch, says some 200,000 homes repossessed by mortgage lenders now sell for up to 65 per cent below their original purchase prices.
“No one buys in Spain purely for investment. It’s just too risky. But lifestyle purchasers are coming back. The crash has presented opportunities to those who want sunshine at a lower cost than before,” says Alasdair Hedley of Hamptons International.
Spain’s land registry says foreign buyers accounted for eight per cent of house purchases in 2012 – a proportion back to pre-crash levels, although on a much reduced volume of trading.
Property commentators predict the government will shortly announce that non-EU nationals will receive automatic residency if they buy a €500,000-plus home. Buyers from China, Russia and India are “ready to go if the law is changed”, says Alex Vaughan of Lucas Fox estate agency.
If they do take the plunge, they would do well to skip the tourist honeypots and head for the hills where hunters – whether of wild boars or unusual homes – will find a haven.
Graham Norwood was a guest of Hamptons International
● Andalucia has 18 per cent of Spain’s population but 23 per cent of assaults and 22.5 per cent of thefts
● The region’s adult unemployment rate is 37 per cent, rising to 66 per cent for under-25s
● Andalusian stamp duty on resale homes recently rose from eight to 10 per cent depending on sale price
● VAT on new homes in Spain recently increased from four per cent to 10 per cent
What you can buy for ...
£500,000 A large private house with substantial grounds near Granada
£1m A small north Andalusian hunting estate requiring substantial renovation
£5m A large modern hunting estate
Copyright The Financial Times Limited 2016. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.