Foreign investment in Spanish property creeps up

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This topic contains 31 replies, has 10 voices, and was last updated by Profile photo of Fuengi (Andrew) Fuengi (Andrew) 4 years, 2 months ago.

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  • #57066
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    http://www.spanishpropertyinsight.com/buff/2012/09/12/foreign-investment-in-spanish-property-creeps-up/

    As you can see from the chart above, foreign investment in Spanish property has increased significantly since the Q1 low of 2010 (+33pc). This suggest that foreign investors see Spanish property as an opportunity now that the bust has brought down prices.

    Well at least it gives some hope to those trying to sell. I can’t see the numbers affecting the huge over-supply of properties though, so prices will remain low in comparison with England for some time to come. 😀

  • #112201
    Profile photo of angie
    angie
    Spectator

    Not according to this article published today and in International Business Times, it says Spanish property prices are still in freefall. If foreign investment is creeping up , it’s doing little or nothing for the property market. 🙄

    http://www.ibtimes.co.uk/articles/384236/20120914/spain-spanish-house-prices-real-estate.htm

    The source is The Bank of Spain so can’t see them lying about this, they’d more likely big it up normally, things must be bad if they’re telling the truth!

    This article shows the falls along the coast as well as other areas too 🙄

  • #112202
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    You’re confused Angie – the two articles do not contradict each other.
    It’s quite possibly because prices are falling, that foreign investment in Spanish property is creeping UP!
    As I said in the first post, I don’t think prices will recover for some time because of the over-supply. This means prices will be at a far lower price than say in much of England for some time to come. Which is presumably why foreign investment in Spanish property is rising. Good news for buyers, and good news for the local economy. Not so good news for those who bought at the peak 2005-7 though.

  • #112203
    Profile photo of angie
    angie
    Spectator

    Thank you ‘M’ but I don’t feel confused, I appreciate the chart you posted shows foreign investment creeping up, my post based on today’s news shows property prices still in freefall in Spain so whilst there may be more foreign investment it appears to have little impact on the overall picture, although such low prices will inevitably bring in bottom feeders. However I think the article still reckons another 10% fall to come yet, it also shows that BOS’s negative forecast is quite like too positive if that makes sense. 🙄

    Agree with your last sentence though, those who bought in the peak and I do feel for them are having an awfully long wait for things to recover, these must be buyers who’ve seen the most dramatic falls. 🙁

  • #112204
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    I isn’t those who purchased at the peak, angie.

    The sellar of the atico I just purchased in Barcelona lost 28% of his ‘investment’ (more if you count all the fees, etc, he has to pay) and he purchased the place in January, 2006, almost 2 years before ‘peak.’

  • #112205
    Profile photo of angie
    angie
    Spectator

    I think I meant ‘boom’ Gary, or during the boom years 😉

  • #112206
    Profile photo of Anonymous
    Anonymous
    Participant

    @garysfbcn wrote:

    I isn’t those who purchased at the peak, angie.

    The sellar of the atico I just purchased in Barcelona lost 28% of his ‘investment’ (more if you count all the fees, etc, he has to pay) and he purchased the place in January, 2006, almost 2 years before ‘peak.’

    Congratulations on your purchase Gary, and for doing your little bit to help the foreign investment number to creep up. Your case demonstrates nicely how lower prices encourage foreign investment. Sounds like you got 30pc to 40pc off peak prices, maybe even more.

  • #112208
    Profile photo of katy
    katy
    Spectator

    Not very canny investors are they…buying in a falling marke :mrgreen:

  • #112211
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    @katy wrote:

    Not very canny investors are they…buying in a falling marke :mrgreen:

    As a canny investor, did you buy Telefonica shares when I mentioned them a couple of months back? If you’d bought at their low point of 8.9 you’d have now seen an increase of +30% !!! But I seem to remember you were put off by ratings agencies giving Spain a hard time.

  • #112212
    Profile photo of Anonymous
    Anonymous
    Participant

    Foreign investors….. from which countries though? Are they mainly still Brits, or Germans? or non europeans such as Russians or Chinese? What about the immigrant groups such as Moroccans and south americans?

    Who are buying?

  • #112213
    Profile photo of Anonymous
    Anonymous
    Participant

    @katy wrote:

    Not very canny investors are they…buying in a falling marke :mrgreen:

    Do you have to buy in a rising market to be canny?

  • #112214
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    @mark wrote:

    Congratulations on your purchase Gary, and for doing your little bit to help the foreign investment number to creep up. Your case demonstrates nicely how lower prices encourage foreign investment. Sounds like you got 30pc to 40pc off peak prices, maybe even more.

    Thanks Mark! Now that we’re in the place, we realize that we got a great deal, partly due to the state of the flat (disgustingly filthy – 6 years without any cleaning) and the inept agents representing the seller.

    It is a larger (for Barcelona) 9th floor sobreatico, 89m2, with 2 terraces, one facing west (20m2), the other east (42m2), both with fantastic views. Sunrise and sunset, every day.

    The agent listed it as a 2 bedroom (it is really 3), he didn’t list it as an atico or sobreatico, he listed it as having 1 terrace (with a photo of it with awful 2 meter high chain-link fencing which we removed immediately), and he listed as being in the wrong neighborhood (it is next to Vila Olympica, on Calle Marina, a very desirable neighborhood for some).

    I do believe that had the flat been cleaned (500 euros?) and listed properly, it could have sold for over the asking price. But it wasn’t and we got lucky and we paid less than the asking.

    Also, the agent canceled the visit to view the place 2 times, both moments before the scheduled time. This happened with many agents in BCN, with about 50% of our appointments cancelled.

    All is to say that based upon my experience shopping for and purchasing a flat in Barcelona, the crisis is the least of the real estate problems.

    Now we start the major reforma… 😯

  • #112221
    Profile photo of katy
    katy
    Spectator

    @mark wrote:

    @katy wrote:
    Not very canny investors are they…buying in a falling marke :mrgreen:

    Do you have to buy in a rising market to be canny?

    Well I wouldn’t be buying a property that is 99% certain to be thousands less next year. 😀

  • #112223
    Profile photo of logan
    logan
    Participant

    The so called ‘foreign investors’ buying property in Spain they believe is cheap are deluded. The are persuaded by marketing tricks such as highlighting the peak price and claiming the property has been drastically reduced. Or false statements saying the market has bottomed out.

    The inference always is the property is a bargain and will soon return to the peak value and the buyer will be in clover.

    The price they are actually paying is the peak price of today. In a falling market very soon marketing will be using that price as another marker, especially when all evidence suggests current values are currently 20% over priced.

    There is in fact no such thing as a bargain in property. I know people easily persuade themselves they have one. What they actually have is a property priced at what the vendor is willing to receive for it.

    The vendor is probably more in touch with market realities than the buyer. In other words they are getting out before the situation worsens as it undoubtedly will.

  • #112224
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    I think many foreigners buying at the new lower prices, are doing so because the price is far lower than at home (and in the sun), not because they expect the market to suddenly rise again. I personally think it will be at least 2 years before prices rise again, but that’s just an opinion and with all this money printing, QE, and bailout stuff going on, you never know what’s around the corner and I could be way off the mark.
    Put it this way, I can buy a 1 bedroomed flat where I am in London for 200k (and not necessarily good quality either, you’re paying for a high cost location), or pay rent of around 10k a year (ie 100k+ over 10 years) or instead get a 2 bedroomed flat in Valencia or Granada for £25-35k. Of course that is not the only consideration, as work, health costs etc come into play, but that 25-35k certainly looks a bargain when looking at the high prices in the south of England. Of course I’m looking on the basis of having a place to retire to. Far riskier imo if you are hoping to get rental income from such a place.
    Article here confirming prices have fallen in Spain.
    http://elpais.com/elpais/2012/09/14/inenglish/1347634740_372318.html

  • #112225
    Profile photo of logan
    logan
    Participant

    Marcos. I personally think two years before prices rise again is way too optimistic.

    You need to look carefully at the economic conditions in Europe which will encourage buyers back in meaningful numbers and consequent rising prices.

    For example; well capitalised and confident banks, individuals ability and confidence to spend disposable incomes on a second property with all the added expense, the risk of umemployment to name but three.

    Europe and the US are suffering the most serious down turn since the great depression. Meaningless optimism ebbs and flows with press statements and political posturing. However that in no way alters the actual situation and market conditions are dire despite stock market spikes.

    Banks and governments cannot obtain sufficient funding at affordable cost from international markets. Business investment for restructuring has collapsed. China’s economy has cooled. Business confidence is on the floor

    If you believe two years will be sufficient to turn this all round I would appreciate reading your reasoning or is two years a number you chose at random?

  • #112226
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    @logan wrote:

    Marcos. I personally think two years before prices rise again is way too optimistic.

    You need to look carefully at the economic conditions in Europe which will encourage buyers back in meaningful numbers and consequent rising prices.

    For example; well capitalised and confident banks, individuals ability and confidence to spend disposable incomes on a second property with all the added expense, the risk of umemployment to name but three.

    Europe and the US are suffering the most serious down turn since the great depression. Meaningless optimism ebbs and flows with press statements and political posturing. However that in no way alters the actual situation and market conditions are dire despite stock market spikes.

    Banks and governments cannot obtain sufficient funding at affordable cost from international markets. Business investment for restructuring has collapsed. China’s economy has cooled. Business confidence is on the floor

    If you believe two years will be sufficient to turn this all round I would appreciate reading your reasoning or is two years a number you chose at random?

    I’m not sure you read what I put

    I personally think it will be at least 2 years before prices rise again, but that’s just an opinion and with all this money printing, QE, and bailout stuff going on, you never know what’s around the corner and I could be way off the mark.

    Funnily enough stock markets, particularly in Spain, have risen sharply in the last few weeks. Now we both know it’s temporary and mainly down to the promise of looser money by the ECB and the US, but it shows that things can turn around at some point.

    But as I say, if (and it is still an if) I buy in Spain, it will be with a view to semi-retire there in the long term. Far cheaper and sunnier than here in southern England, although I’m not completely ruling out a place in the north. Unless of course the unlikely event that house prices collapse in London too, but even then the cost of many things like transport, parking etc will stay expensive.

  • #112228
    Profile photo of Anonymous
    Anonymous
    Participant

    Those who I know that are happiest in Spain have kept a property in the UK.

    They are in the UK over Christmas and go to Spain in March/April and return to the UK in July/August and mid September go to Spain until about mid November. They don’t then get the extreme cold of winter or the heat of the summer. They have very little in their homes out in Spain so if the place gets broken into it won’t mean that valuable or sentimental things can get stolen.

    Take it as it is, a place to warm up and enjoy a bit of sunshine and cheap wining and dining.

  • #112246
    Profile photo of Chopera
    Chopera
    Participant

    @katy wrote:

    @mark wrote:
    @katy wrote:
    Not very canny investors are they…buying in a falling marke :mrgreen:

    Do you have to buy in a rising market to be canny?

    Well I wouldn’t be buying a property that is 99% certain to be thousands less next year. 😀

    and neither would the canny investors taking advantage of a falling market.

  • #112247
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    interesting tidbits:

    During the second quarter of 2012 the foreign market accounted for 9502 Spanish property purchases, which represents a 12 percent increase compared to the same period in 2011.

    For location of housing, most purchases made in the second quarter were in Andalusia (1676), Valencia (3114), Catalonia (1615) and the Canaries(1173)

    by province: Alicante with 2,645 sales, followed by Malaga (1127), Barcelona (847), Tenerife (655), Balearic Islands (536), Las Palmas (518) and Madrid (522)

  • #103672
    Profile photo of GJ
    GJ
    Participant

    @fuengi wrote:

    interesting tidbits:

    During the second quarter of 2012 the foreign market accounted for 9502 Spanish property purchases, which represents a 12 percent increase compared to the same period in 2011.

    For location of housing, most purchases made in the second quarter were in Andalusia (1676), Valencia (3114), Catalonia (1615) and the Canaries(1173)

    by province: Alicante with 2,645 sales, followed by Malaga (1127), Barcelona (847), Tenerife (655), Balearic Islands (536), Las Palmas (518) and Madrid (522)

    I am surprised the huge differential between Valencia and Andalusia.

    In the boom was it more equal ? Fuengi and do you think that its more non british northern Europeans buying on the Costa Blanca because its a shorter drive.
    I think many Germans preferred Barcelona and Valencia.

    It seems that the increase over 2011 is driven by non brits buying.

  • #100604
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    @gj wrote:

    @fuengi wrote:
    interesting tidbits:

    During the second quarter of 2012 the foreign market accounted for 9502 Spanish property purchases, which represents a 12 percent increase compared to the same period in 2011.

    For location of housing, most purchases made in the second quarter were in Andalusia (1676), Valencia (3114), Catalonia (1615) and the Canaries(1173)

    by province: Alicante with 2,645 sales, followed by Malaga (1127), Barcelona (847), Tenerife (655), Balearic Islands (536), Las Palmas (518) and Madrid (522)

    I am surprised the huge differential between Valencia and Andalusia.

    In the boom was it more equal ? Fuengi and do you think that its more non british northern Europeans buying on the Costa Blanca because its a shorter drive.
    I think many Germans preferred Barcelona and Valencia.

    It seems that the increase over 2011 is driven by non brits buying.

    Got to wait a bit more for this years figures, but looking at last years foreign buyers:

    Brits about 4,500
    french about 2,100
    german about 1,700
    italy and sweden about 1,200 each
    norway and belgiun about 1,100 each
    holland about 700
    denmark, finland, ireland and switzerland couple hundred each.

    From what I remember of general property trends, Valencia has generally had a higher figure in regards to property transactions, but the a average sales price was lower.

  • #112249
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    just did a quick search:
    figure in thousands €
    2nd quarter. investment by foreigner

    Andalucía TOTAL: 318,815.8 new build: 47,082.4 resales: 271,733.4
    Málaga TOTAL: 247,308.0 new build: 32,253.8 resales: 215,054.3

    Comunidad Valenciana TOTAL: 392,474.3 new build: 61,374.2 resales: 331,100.1
    Alicante/Alacant TOTAL: 346,164.5 new build: 54,473.8 resales: 291,690.7

    quite interesting when you consider there was twice as many sales in Valencia and Andalusia ! and nearly two and a half times as many sales in alicante as in malaga (provinces).

    EDIT: additioanlly looks like the average purchase by foreign stands at about 220,000€, while in alicante its 127,000€.

  • #112250
    Profile photo of GJ
    GJ
    Participant

    Thats interesting info cant wait to see this years figs

    My guess would be Brits same or only small % up and all others up by larger %.Not including the Irish of course.

  • #112252
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    @gj wrote:

    Thats interesting info cant wait to see this years figs

    My guess would be Brits same or only small % up and all others up by larger %.Not including the Irish of course.

    only time will tell.

  • #112243
    Profile photo of katy
    katy
    Spectator

    Don’t forget spanish sales stats include bank foreclosures and inheritances. I wonder what method they use to get the split between nationalities so quickly 😕

  • #112255
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    hi katy,

    the foreigner breakdown is for last year not this.

    and the figures I quoted are for property sales (compraventa).
    which on checking the methodology they state:
    La compraventa es un contrato por el cual uno de los contratantes se
    obliga a transmitir la propiedad de una cosa determinada y la otra parte
    se obliga a pagar por ella un precio cierto.

  • #112256
    Profile photo of Anonymous
    Anonymous
    Participant

    and what about the other nationalities…..? in our block all those who have had their places repossessed were from Morocco, Ecuador and Romania. They would have bought in 2006 to 2010. Or have they all just stopped buying at all because the banks aren’t handing them free cash?

    I thought that the highest number of foreigners in Andalucia were from Romania, then Morocco, then Ecuador and then Brits? or was that a few years ago?

    Isn’t it similar for the Alicante region and Barcelona? There are lots of Africans up there as well aren’t there? Those who moved up in the boom from the poorer south of Spain to do the cash in hand jobs that no one else wanted to do? I heard plenty of them talking in the Locotorio (internet and call place where I used to use the internet before we got it at home in Spain). They would often be talking in either english or spanish about how they’d handed their keys back to the bank in Alicante or suchlike.

  • #112257
    Profile photo of Anonymous
    Anonymous
    Participant

    ps, I do realise that most on here are talking about villas of higher value where such neighbours probably aren’t a concern. But, I think that their numbers would show up on the stats of who was buying and it does highlight a major flaw in the Spanish banks who were chucking money at everyone to buy property in the boom.

  • #112259
    Profile photo of logan
    logan
    Participant

    I don’t believe any statistics produced by organisations in Spain. You could if you had the inclination pull them apart fairly easily. It’s part of the ‘talk up the market syndrome’.
    Desperation does that.

  • #112260
    Profile photo of Anonymous
    Anonymous
    Participant
  • #112262
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    you may be right logan, but these same people say prices are down and overall sales have decreased. They are not exactly ‘hyping’ the market.

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