BUYING A CAVE . . . INVESTMENT

Is a cave an investment? The short answer is that any property should prove an investment depending on the market and growth that market experiences at any given time. Property tends to rise and fall in value, sometimes dramatically depending on various factors such as inflation interest rates etc etc. With caves the situation is slightly different although the same principles apply. The fact that caves are located in Spain presents immediate attraction to the foreign buyer, Spain is still the most popular EU country to buy/invest in with literally thousands of non Spanish residents buying every year (2006) Caves in Andalucia first started becoming popular in early 2001 with a handful of British stumbling upon this unique way of life (other nationalities had discovered the Spanish cave in the late 70's).

In the late 90's the Spaniards could not even give away their caves, once stigmatised with gypsy culture and a symbol of poverty nobody wanted to buy a cave - after all they were just holes in the ground! This all changed with the arrival of the "Brit". In our own hamlet we have seen upwards of eight caves purchased by the British in the past twenty-four months (when we moved here we owned only one of two British caves)

Here are two examples of price:

• Cave 1 ~ located in a rural hamlet fully reformed and sold in 2005 for 86,000 euros. Resold in 2006 for 118,000 euros and now up for sale again at 140,000 euros.

• Cave 2 ~ located on the outskirts of a rural village, sold for over the asking price at 67,000 euros in 2003, now up for sale at 129,000 euros.

The growth speaks for itself. A few years ago a traditional style Spanish cave which would have needed updating could have picked up for under 25k five years later the price has tripled. One major factor effecting price is the unique design of each cave, no two caves are the same, its is not like buying a 3 bedroom terraced house in England, one may have a conservatory and better kitchen and carpets but essentially the house is the same, same layout, same size etc etc. Caves boast individuality and sometimes this can come at a price. The Spanish have been quick to catch on to this unexpected and bamboozling boost to the cave market and have marketed their caves accordingly. However some do take a chance (and so do the English)

Scenario: A family would like to sell their cave but are prepared to wait / or they really would not like to sell but would for an extortionate price. So the cave goes on the market for 150k when the market value may only be 100k for example. The cave is unique with great views and someone falls in love with it "The I want this one effect" the price is paid and overnight cave prices rocket. This is very very rare but has happened in the past.

A cave on the market in 2004 may have been marketed for 80,000 euros; in 2006 that price would top 100,000 so in 2008 or 2010 where will cave prices be? 150,000 or 180,000? The fact is that caves are experiencing massive growth and in a very short space of time. My neighbour who bought his cave in 1979 paid the equivalent of 400 (four hundred) euros for it. There are caves commanding very high prices indeed with some in excess of 275,000 euros and there are others which simply need to be sold for under 25,000 - for the latter you need to look very hard.

Interest rates in the UK (UK citizens being the current primary cave buyers) will no doubt affect the individuals or families disposable income this along with other monetary factors may see a decline in the cave buyer and investor but will the caves be affected? Probably not, caves seem to have certain "knack" of maintaining their value, again down to individuality, location, lifestyle and being so unique. The growth is likely to continue with prices rising as properties on the coast "having had their day" many cave buyers seeking the real Spain are moving from the Costa's and relocating inland. We also have the exchange rate to consider no matter what the price of a cave. A four bedroom unique property with stunning views, comes with massive amounts of culture, fresh air, great food and relaxed lifestyle . . . €99.950 that's £67,000

Not bad at all.

(All information and opinions sourced from Spanish, French and English residents in Orce, Fuente Nueva, Galera and Baza).