Golf resorts no longer a hole in one for discerning buyers

7th April 2008, Comments 0 comments

Resorts on the golf course see decrease in sales and less foreign owners.

7 April 2008
MADRID – The real estate slump is also affecting golf course developments in Spain. Around 20 percent of resort homes on the coast form part of the so-called golf course-housing scheme, and so far it looks like these resorts are suffering from two problems: The decrease in sales and the drop in foreign buyers.

"They are mostly targeted for an international public, and are located far from the coast, or only relatively near it, so their place in the market right now is really problematic," says José Manuel Fernández, of the consulting group Grupo i.

Of the 80,000 people who will purchase a home on the coast this year, only between 35 percent and 40 percent will be foreigners, says Manuel Gandarias, president of the real estate association Live in Spain.

These resorts are just not attractive enough for Spanish buyers, who guide themselves more by prices rather than services, adds Alfonso Gordon, director of operations for the real estate firm Era Inmobiliaria.

"Clients are looking for a product that meets their needs, and they do not want to pay extra for services they are never going to use," says another realtor, David Moya, the executive director of Look & Find. According to the latest report by Aymerich Golf, the average price of a house on a golf course is EUR 443,685.

Gone are the days when these types of homes went up in value by as much as 20 percent annually. What's more, some experts believe that the golf-housing model, which was developed in order to fight tourism seasonality in coastal areas, may have come to an abrupt end.

Part of the reason for this is concern over its environmental sustainability, given these developments' heavy water needs. But another reason is their low profitability because of competition from other, less expensive foreign destinations.

Golf-and-home resorts have proliferated on the coasts of Andalusia, Murcia and Valencia in the last few years. Even though Murcia was considered the most attractive place to purchase such real estate, it began experiencing sales difficulties in mid- 2007. Meanwhile, in Valencia and Alicante, beachfront housing continues to be the best sell, significantly above golf developments, says Antonio López, president of Alfa Inmobiliaria Levante.

But the real problem now is the projects still waiting to come out on the market like in Asturias. At present, the best-selling golf-and-home real estate property is going for around EUR 200,000.

[El Pais / S. L. L. /  Expatica]

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