Spain's Golf Course Home Prices Slashed by 50 Percent

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Apartments bordering golf courses in the once fast-growing Murcia region are selling for a 50 percent discount from peak prices, Bloomberg reports.

The units are in developments built by Polaris World, which developed six high-density projects around Jack Nicklaus-designed golf courses in arid Murcia before the market collapse. The projects were primarily marketed in the U.K., where Polaris World ads touting the Spanish lifestyle were ubiquitous during the height of the building boom.

In 2009 Polaris World turned over more than 1,500 units to banks, and now the banks are eager to clear the apartments off their books, the wire service reports.

A two-bedroom, 74 square-meter (796 square-foot) penthouse is on sale for 128,800 euros ($180,000), down from 272,000 euros three years ago, Bloomberg says.

More than 1 million units sit empty around Spain, analysts estimate. A recent study by the property website Fotocasa.es and the IESE Business School in Barcelona found the number of homes purchased in Spain by foreigners dropped 78 percent from 2006 through 2009, Bloomberg notes.

In many ways, Murcia is the poster child for the problem. Led by Polaris World, thousands of units were built in the region, despite a water shortage and no history of attracting large volumes of tourists.

Many of those units were eventually repossessed by banks, which are only now looking to sell them. This is bad news for existing owners interested in selling, who find themselves competing against the banks.

Anne Simpson, a 55-year-old retiree from Glasgow, said she has received no offers on her unit, which is priced well below the 192,000 euros she paid in 2003.

"As beautiful as the resorts are, they are in the middle of nowhere," she told Bloomberg. "It's getting better and more populated, but it's still a bit of a wilderness."

Murcia may get a boost from plans to build a Paramount Pictures theme park in the region. Paramount will have no role in building the park, but it is licensing the name to developers, according to published reports.

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