10% reduction in prices due to Pound decline

LoadingFavourite

This topic contains 13 replies, has 6 voices, and was last updated by Profile photo of Anonymous Anonymous 9 years ago.

  • Author
    Posts
  • #53477
    Profile photo of Anonymous
    Anonymous
    Participant

    The Pound lost 10% with respect to Euro in the last month.

    From your experience, are British sellers in Spain willing to reduce the price by 10% in Euros considering that the Pound price is the same? Of course, on top of the usual price bargaining.

  • #76247
    Profile photo of Anonymous
    Anonymous
    Participant

    Ralita

    Very good question,one I was asking myself. I am sure that if the british sellers dont reduce there prices they will have even less potential purchasers than they have now.

    Would one solution be for britsh buyers and sellers to do the deal in pounds, does anyone know if this is possible in Spain? can’t see why not, but the fees and taxes would still have to be paid in euros.

  • #76248
    Profile photo of Anonymous
    Anonymous
    Participant
    Stevev6 wrote:
    Ralita

    Very good question,one I was asking myself. I am sure that if the british sellers dont reduce there prices they will have even less potential purchasers than they have now.

    Would one solution be for britsh buyers and sellers to do the deal in pounds, does anyone know if this is possible in Spain? can’t see why not, but the fees and taxes would still have to be paid in euros.

    Well, if they plan to come back to UK or they live in UK, a Pound transaction makes plenty of sense.

    But then the question is, which is the reference price in Pounds for an apartment priced at 150K Euro in October 2007 and November 2007

    – 150K/1.52 = 98K Pounds (October 2007)

    – 150K/1.38 = 108K Pounds (November 2007)

    Anyway, the decrease of Pound (which might accelerate if they cut the rate in December) is not happy news for both British Sellers and Buyers. The Buyers will be even more afraid of buying now.

  • #76249
    Profile photo of katy
    katy
    Spectator

    Properties are not just on sale to UK buyers. If it is sold to a buyer in the eurozone there is no difference. They could reduce a little though as they would get more GBP for their euro if they are transfering back.

    Our last house was purchased with mainly sterling by a UK bankers draft but the exchange rate was taken from a call to the bank just before going to the notary. Of course taxes etc. have to be paid in euros.

    The first property we bought here cost us about 4000GBP extra with fluctuations in the peseta 🙁

  • #76251
    Profile photo of Anonymous
    Anonymous
    Participant
    katy wrote:
    Properties are not just on sale to UK buyers. If it is sold to a buyer in the eurozone there is no difference. They could reduce a little though as they would get more GBP for their euro if they are transfering back.

    Our last house was purchased with mainly sterling by a UK bankers draft but the exchange rate was taken from a call to the bank just before going to the notary. Of course taxes etc. have to be paid in euros.

    The first property we bought here cost us about 4000GBP extra with fluctuations in the peseta 🙁

    Of course anybody can buy properties in Spain. BUt the properties advertised on say
    Rightmove should be advertised in Pounds. Otherwise the sellers need to decrease
    the prices by 10% as no British buyer is willing to cover the oscillation of the Pound.

    Of course Euro will eventually tank itself.

  • #76252
    Profile photo of katy
    katy
    Spectator

    Yes, you are correct. In a booming market the sellers could have held the prices but, as things are at the moment……. 😕

  • #76254
    Profile photo of Anonymous
    Anonymous
    Participant
    katy wrote:
    Yes, you are correct. In a booming market the sellers could have held the prices but, as things are at the moment……. 😕

    I agree, in a booming market the sellers have all the advantages. There is no doubt about it.

    But in a falling market the buyers also have all the advantages.

  • #76256
    Profile photo of Anonymous
    Anonymous
    Participant

    For the sake of accuracy here are the official historical exchange rates Euro/GBP.

    Last 120 days:
    highest on Jul 25 @ 1.49595 Euro for 1 GBP.
    lowest on Nov 21 @ 1.38816
    That’s 7.2% less Euro for your GBP on Nov 21 compared to July 25.
    The drop for the last 30 days is 3.7%


    So, those of us in Euro land lets buy in Britain (or the USA)!

    SK in IRL

  • #76257
    Profile photo of Anonymous
    Anonymous
    Participant

    We bought our apartment earlier this year in February got 1.497 which probably saved us thousands of euros but we have probably lost thousands of euros since then on the value of the property so at the end of the day probably no better or worse off.

  • #76258
    Profile photo of Inez
    Inez
    Participant

    At the very end of the day, the owner will accept whatever he either wants to or has to in accordance with his personal situation. If the offer is below mortgage and costs, then he will not put his hand in his pocket and will let it be repossessed by the banks

    So, currency fluctuations will not really make a difference to the end result!

  • #76259
    Profile photo of Anonymous
    Anonymous
    Participant
    Inez wrote:
    At the very end of the day, the owner will accept whatever he either wants to or has to in accordance with his personal situation. If the offer is below mortgage and costs, then he will not put his hand in his pocket and will let it be repossessed by the banks

    So, currency fluctuations will not really make a difference to the end result!

    Well, the fact that the Euro is highest ever with respect to Dollar and Pound do make a big difference in a falling market.

    The only reason foreigners might want to buy in USA is because the dollar is so weak.
    A new 3 bedroom/2baths house in Florida in a not so bad area can be had for $100K i.e. 67500 Euros. Of course, buying in Florida is not a good choice considering huricanes and huge property taxes.

    I am not sure if one can find a new 1 bedroom apt. in Spain for this price. So no foreign investor will ever buy in Spain at these prices. And the people who want to move there have a HUGE selection of rentals at peanut prices.

  • #76260
    Profile photo of Inez
    Inez
    Participant

    I agree – although you can find 1 bed apartments for that price and cheaper in Spain.

    The big issue is location. Even in the blackest of markets a good property with a good location will hold its price, so providing the owners can hang on, they will realize their price.

    The market here is a big mixture of luxury buyers and speculators. The speculators bought in order to sell and make money, not to complete and often cannot afford to complete. The luxury buyers are usually inflation proof and can ride out the storm, therefore they do not have to sell and will hold thier price, thereby keeping the market level up in that property and area.

    Its a bot more complicated than merely the movement of euro against the dollar or the pound.

    Also many buyers were Irish – they are in the eurozone as well! As is the rest of Europe.

  • #76261
    Profile photo of Anonymous
    Anonymous
    Participant

    As I said in a previous post we bought earlier this year and yes we could have bought what we have here, in Florida at half the price but there are more factors than money come into the equation. The length of flights for me was a big factor and also we can pop over to Spain for a long weekend etc etc. Although I love America after weighing everything up there was just no decision to make.

  • #76262
    Profile photo of Anonymous
    Anonymous
    Participant
    Inez wrote:
    I agree – although you can find 1 bed apartments for that price and cheaper in Spain.

    The big issue is location. Even in the blackest of markets a good property with a good location will hold its price, so providing the owners can hang on, they will realize their price.

    The market here is a big mixture of luxury buyers and speculators. The speculators bought in order to sell and make money, not to complete and often cannot afford to complete. The luxury buyers are usually inflation proof and can ride out the storm, therefore they do not have to sell and will hold thier price, thereby keeping the market level up in that property and area.

    Its a bot more complicated than merely the movement of euro against the dollar or the pound.

    Also many buyers were Irish – they are in the eurozone as well! As is the rest of Europe.

    Where are the 60K Euro 1 bedroom apartment at less than 30 minutes to the beach? And also say less than 3 years old?

    I looked at many sites and I could not find any.

    Are there listings with new built apartments in Spain with direct connection to the developer’s sites?

    Is there any site for auction or short sales?

    I agree with the Florida being far away. I am very tempted in buying something in California or Nevada but it is just a temptation…

    I also agree that the good location properties will not lose value.

You must be logged in to reply to this topic.