The boom times are over for Spain's most famous holiday homes market - the Costa del Sol.
A Marbella auctioneer is being flooded with property from developers and investors are unable to sell, and a home acquisitions service says the lower end of the Costa de Sol's new-build market is in a meltdown.
Marbella-based Direct Auctions took on 382 properties from five Spanish developers last month who were willing to sell at discounts of up to 50 per cent. The auctioneer is receiving six sales instructions a day from homeowners unable to sell.
Speculators are approaching the auction house because they cannot flip off-plan purchases before developments reach completion. Some of them forfeit Euro100,000 (HK$1.16 million) deposits because they cannot make final payments.
'They flood in as the developer tells them they have to complete,' Direct Auctions director Inez Rix said, adding that this was the start of a two-year downturn that would worsen by year-end.
'The banks are being lenient to those struggling to complete purchases, but by the end of the year we could see a surge of properties coming on the market, because the financial year runs January to December and banks may need to balance books by then, so they may repossess properties and auction them off,' Ms Rix said. 'This will not be a gentle fall, but we will have surges as property comes on in large lots.'