Spain opens the bidding

In a slowing Costas property market, is the time ripe for buying at auction? Zoe Dare Hall investigates

It is a sweltering afternoon on the Costa del Sol and Spain's first property auction is under way. Two people have turned up in beach towels. The other 80 or so - mainly English, average age 45-50 - are keeping their hands clasped firmly in their laps and wishing they'd brought a jacket to fend off the Arctic air-conditioning in Andalucia Plaza hotel. And the spirited Irish auctioneer, Jeremy Herron, has just reached for his mouth organ.

It is a sweltering afternoon on the Costa del Sol and Spain's first property auction is under way. Two people have turned up in beach towels. The other 80 or so - mainly English, average age 45-50 - are keeping their hands clasped firmly in their laps and wishing they'd brought a jacket to fend off the Arctic air-conditioning in Andalucia Plaza hotel. And the spirited Irish auctioneer, Jeremy Herron, has just reached for his mouth organ.

Afterwards, Inex Rix, the co-director of Direct Auctions, agrees: "Jeremy livened it up and got people laughing. People can feel nervous and intimidated at auctions, so we want to simplify the process and remove the mystique. It is serious business, but anyone who comes here has the money and knows if they're going to buy."

Rix, who runs property management company Inderix in Fuengirola, and Barry McEntee from First Choice Properties, launched Direct Auctions in Puerto Banus in June, having waited for the southern Spanish market to turn. "With a falling market here the time is ripe for property auctions," she says. "For the past six years developers have been carving a niche by building huge amounts of new properties and the coast has seen heavy growth, but the market is slowing down."

From the first auction, Rix says one thing is clear: "People aren't happy with inflated prices around here anymore. It's interesting how close to the guide prices properties are going for."

Though only one lot was sold on the day - a two-bed apartment in Nueva Andalucia for €230,000 (£153,000) in need of work but with good long-term letting potential - a further eight properties changed hands after the event. "The following day we had offers at amounts that were above normal but everyone sat on their hands at the auction," says Rix.

Investors have been the main participants so far, but Rix is hoping to increase the confidence in auctions as an alternative way to buy property to attract other buyers. "If you make it clear and simple, anyone can buy at auction. In Australia, 95 per cent of properties are sold in this way. It's a slow pick-up, but we've got a good brand, with properties well below the market value. People are getting a good deal."

The most popular lots are two-bedroom apartments, especially in Marbella's Golden Mile or Nueva Andalucia. "Most people looking to buy at auction are buying apartments for investment not villas to live in," Rix comments.

Three English bidders flew over just for the event, having studied the catalogue on the internet and viewed the properties the day before the auction.

Once a bid is accepted, the buyer puts down 10 per cent of the purchase price and has 28 days to sort out the remaining finance. "We can provide lawyers and mortgage advice so there's no reason why it should be any different buying here than in the UK," says Rix.

Spanish auction houses exist but are run through the courts with sealed-bid tenders. And some past expat ventures on the Costa del Sol have been dubious, says Rix. "As soon as the hammer had fallen, they'd take the client out back and tell them they had to pay an extra €20,000. It's frightening what happens here. This place has been robbed for so many years."

To avoid accusations of robbing anyone, Direct Auctions is challenging the usual commissions charged by agents, which can be up to 10 per cent, by cutting its rate to 2.5 per cent.

Mark Stucklin from Spanish Property Insight, an online consultancy for overseas buyers, warns: "Buying at auction can be a good bet, especially in a falling market where you get a lot more distress sales from people needing to shift properties quickly. But you need to be well informed, which can be difficult if you're only in the country for a few days. It's also easy to get caught up in the heady and competitive atmosphere of an auction and end up paying far more than you planned. Make sure you visit the property and see a good selection of other properties in the area so you know you're not paying over the odds." There is one big advantage to buying property in Spain at auction, adds Stucklin. "You avoid that awful situation of being driven round by estate agents."

Direct Auctions. Tel. 00 34 952 817 673, low cost UK 0871 990 3090 ( www.direct-auctions.com). Next auction at H10 Andalucia Plaza Hotel, Puerto Banus, on 23 September.

Discover more property articles at Homes and Property
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Pastry Sous Chef / Experienced Pastry Chef

£27K: Guru Careers: We are seeking a Pastry Sous Chef / Experienced Pastry Che...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before