Last time out we saw how oversupply and illegal building had knocked a hole in the Spanish property market. Bad news if you’re a seller but every cloud has a silver lining as they say. Now a lot depends on movements in the world money markets, and particularly the retail money markets - in short, getting a mortgage isn’t anywhere near as easy as it was a year ago. But if you do have access to a deposit, then paradoxically it could be an excellent time to invest in Spanish property. That’s because prices (in certain areas at least) have gone through the floor in recent months.

The reasons aren’t hard to find - oversupply of course, and the fact that many builders and developers are desperate to shift property and get cash back onto their balance sheets. One estate agent we spoke to this week reckoned that, credit crunch and further potential property price falls aside, it was a great time to buy a holiday property in Fuengirola or Torremolinos. ‘You’d have to be a little bit brave, because they may fall a way further yet. But if you’re not looking to sell on for a few years, then you’ve lost nothing. Ultimately prices are going to recover,’ he told us.

Of course there are major pitfalls to avoid. The illegal building scam means certain properties are simply being pulled down, so checking the legal aspects thoroughly is more important than ever. Then there is exactly where you’d want to buy. Our man’s enthusiasm for the megabuilds in Torremolinos may be a little misplaced, and we always reckon you’re better off looking for a single apartment in an area where everything else is already let or owner occupied. If you do need to rent your apartment out then you don’t want to be competing with a hundred other desperate landlords. But cautiously, and if it’s not money you have to borrow at a premium, then buying up some of that oversupplied property on the Costa del Sol just now could be a very sound bet.

Spanish property oversupply, part 1