Holiday homes lose their shine

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This topic contains 27 replies, has 12 voices, and was last updated by Profile photo of Anonymous Anonymous 9 years, 1 month ago.

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  • #53210
    Profile photo of mike
    mike
    Participant

    A series of second home hot spots across the Continent has had thousands of euros wiped off the value of holiday villas, particularly those along the Mediterranean, an investigation by The Daily Telegraph has found

    http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/10/06/nhomes106.xml

    The Telegraph seems to be the UK newspaper most bearish on the world economy. But could they be right? In Cadiz, for example, are they talking of the whole region or just the coast?

    It’s something I expected but not so soon. Unless, like in the States, developers are virtually giving away property just to get it off the books.

    Any thoughts?

  • #75444
    Profile photo of Anonymous
    Anonymous
    Participant

    Cadiz falling by 15% ? rubbish. The city itself is limited by the nature of the location to guarantee no further major building unless more land is reclaimed from the sea. So shortage of properties will not result in falls. The province has some of the finest coastline and countryside and prices seem to be holding very steady. Where does this journalist get this figure from ?

  • #75445
    Profile photo of Anonymous
    Anonymous
    Participant

    Cadiz has a decadent industry and if nothing is done to improve it Cadiz would be one of the areas of Spain with more unemployment. This can be another reason for the drop in prices.

  • #75448
    Profile photo of Anonymous
    Anonymous
    Participant

    ‘decadent’ may be correct and it is clear that the shipbuilding businesses which more recently turned to building oil rigs have seen better days, and the car parts business Delphi has decided to move away from Spain but I believe the AIRBUS factory is surviving.
    but I question where the 15% fall comes from. And whether it is Cádiz city or Province? This is totally unclear. Prices certainly went up in the Province in recent years.

  • #75449
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    mike
    Participant

    @costa_light wrote:

    And whether it is Cádiz city or Province? This is totally unclear. Prices certainly went up in the Province in recent years.

    That’s why I asked the question whether it was the city or the province. I would assume it is the province as the City has geographical constraints.

    @costa_light wrote:

    The province has some of the finest coastline and countryside

    Agreed. But are proprties there good value for money?

    @costa_light wrote:

    Where does this journalist get this figure from ?

    That’s what I asked. But where do you get your figures from? Maybe that will provide the answer.

  • #75452
    Profile photo of katy
    katy
    Spectator

    Prices are dropping everywhere except the place where a poster lives, general rule of forum 😉

  • #75453
    Profile photo of Anonymous
    Anonymous
    Participant

    Nice one katy.

    The true reality is that in these days we can find some bargains because there is a lot of people who bought only to sell before “escrituras”. But they have found that the selling period today is longer so they struggle to dispatch the properties before the feared “escrituras”.

    For example, here in Lorca, I found some very affordable 3 room flat for about 150.000 euros (The medium price for this was 180.000). It belongs to a real estate agent who bought them to get a profit selling them before “escrituras” but now he has found that the banks dont want to give him the mortgages so he have to sell the flats. If not he will lose the money of the first agreement.

  • #75462
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    Anonymous
    Participant

    It is true that property prices around the Bay of Cadiz have risen very much over the past 5 years. In a place like El Puerto de Santa Maria (a popular summer resort) holiday accommodation went through the roof – well I mean rose by at least 70% during those 5 years. So maybe some levelling off may be necessary but to say “Cadiz falling by 15%” is bad journalism.
    The article was dealing with ‘holiday homes’ or second homes and so I imagine that the flats owned by the workers of Cadiz do not fit into this description. This area is liked by all nationalities and for example, the area around Chiclana has seen a very large growth of British buy property. And they still buy.

  • #75464
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    Anonymous
    Participant

    Whilst no one will dispute that property prices in Spain are under intense presure I do wish the press would research and proof read their articles a little better. They claim property prices in Alicante have fallen 2% yet the diagram says 1% no mention in the article is made to Majorca where again the diagram say a 12% drop, and the article talks of price falls “particularly those along the Mediterranean” going into detail about Cadiz, by my geography Cadiz is on the Atlantic coast. Maybe this is splitting hairs but if they are going to print articles like this at least get the facts right.

  • #75467
    Profile photo of Inez
    Inez
    Participant

    Ok as this is a pet passion of mine I had to jump in here

    Firstly to most people this is very old news

    Secondly as no one knows true prices outside of the UK, then increases and falls are both non existent and basically made up!

    Here in Spaion you have differeing prices -:

    1. The asking price – usually picked out of the air and added to by the agent who places high commissions on top with the throw away line ‘ hey man, there are millions out there who will make an offer!’

    2. The bank valuation – spain based on euros per square metre – not taking into account which way facing, views or not or anything except build size and quality (to a degree)

    3. The actual agreed sales price – as rare as rocking horse s**t to be told by agents etc therefore no benchmarking can be seen – except on certain agent sites!!!

    4. The escritura price!

    So in a big nutshell, how oin earth can anyone tell the true increase/decrease when there ar so many vaiarbles.

    It really annoys me.

    Anyway take this as a scenario – buyer buys at 100k. Declares 70k (thats then the official price!) Decides to sell. Places it at 150k as advised as others are ‘selling’ at that price. Accepts 120K

    Is that an increase on price or a decrease?? What do you base it on!!?

    From my point of view and bearing in mind how many people I now am getting desperate to get rid of their proeprty (I am last resport for them) and how many are listeneing to me with regards to pricing, I would say prices have decreased from the overinflated prices of yesterday and are basically in line with what they should have been over the years. However, there are people who for whatever reasons have to sell and therefore will drop thier price to get rid of and move on – same all year around and all the world over.

    End and thank you for listening!

  • #75468
    Profile photo of Anonymous
    Anonymous
    Participant

    Inez

    it looks the phrase ‘it’s worth what you can get for it’ has never been more apt!

  • #75469
    Profile photo of Anonymous
    Anonymous
    Participant

    Average Price stats are grossly misleading. They ‘lag the reality on the ground’.

    The Stats for the Orlando area of central Florida says prices in 2006 ROSE BY 14%!!!!!!!!!!!!!!!!!!!!!

    When in reality the peak for prices was Oct 2005 and by the end of 2006 you could buy a like for like property 25% cheaper than at the peak, fact!!!

    In the last crash befor this one in the UK (peak=1989 bottom=1993ish) the stats show that average UK prices only fell 17%.

    That is because rises in Scotland and the North smoothed out the falls in the East and west Midlands the South and South West. The fact was prices fell 30 to 35% and in the East Anglia, London and the South West propertied were very often at a 45 to 50% reduction and still strugling to sell.

    Remenber we are just at the begining of the credit crunch the US property crash is two years in with a further 2 to 3 years to go. Spain and Ireland are next. In the UK and France we are just at the begining, anyone who thinks we in the UK are going to avoid it is imho, operating in a hope/denial over what experiance and the lead stats are telling us paradigm!

  • #75470
    Profile photo of Inez
    Inez
    Participant

    Absolutely Goodstich and the old adage I firmly stick to is –

    Something is only worth what someone else is prepared to pay for it

    No more no less!

  • #75471
    Profile photo of Inez
    Inez
    Participant

    And Pablo, I beleive the peak of prices here was 2003 in reality, it was the media frenzy pushing buyers (and real estate agents) into thinking it was going to continue that kept prices rising to 04/05!

    It was evident in 03 (and before that if one was in the know) trouble was on the horizon.

    Sadly no one wanted to listen to me and my ilk, but this is like deja vu for me!

    IMHO it will be a good 5 years until the balance even starts to come back up, but which time untold damage will have been done and the complexes in the middle of nowhere will be like ghost towns and unsaleable!

    Thank goodness for the sunshine and the way of life – these are the main reasons for people still wanting to move here, otherwise there really would be no-one coming!

  • #75474
    Profile photo of Anonymous
    Anonymous
    Participant

    Currently there are 3.1 million empty properties across the country, according to the National Statistics Institute, and this number will only increase unless there is more demand.
    http://www.typicallyspanish.com/news/publish/article_12895.shtml

    Diario El País reports today that the real estate industry in Spain has now amassed a total debt of more than a thousand billion euro for the first time.
    http://www.typicallyspanish.com/news/publish/article_12879.shtml

    Am trying to find some good news, but just can’t find any. 🙁

  • #75476
    Profile photo of Inez
    Inez
    Participant

    Well – its about 24 degrees today and the sea is really flat. A beautiful day, makes you glad to be alive (if one could afford to eat! 😆 )

  • #75481
    Profile photo of Anonymous
    Anonymous
    Participant

    Inez, you mention the bank valuation, per square metre, i.e. build size. Can you tell me what that is at the moment? Or does it depend on situation?

    House insurance costs are based on the square meterage of the property, or at least I was asked the size of our property when asking for quotes.

    Is there somewhere I can look up this figure. Otherwise how can anyone put a realistic figure on their property when the come to sell it.

  • #75482
    Profile photo of Inez
    Inez
    Participant

    Exactly! Its based on area, location and build quality!

    So an older style property with gold taps wont value as much as a new one smaller with marble floors in the middle of density!

    Total madness and add to that valuers make their own rules up so you can send in 5 different valuers to the same property and have a range of ‘price’ spanning (in one actual case) 100,000 euros apart!!!

    Go figure! (scuse the pun!)

    No one knows about realixtic figures as recently was a rising market and so asked what you wanted and usually got it! Nowadays I work on bank val then price it at about 70% of that (or less in some cases) as its the only fact one can rely on.

    Hopefully with black money being slowly eradicated we will get to a system as in the UK where you can do a search and come up with the purchases price, therefore a better comparable system (as in UK) which is far more exact and based on actual price sold for.

  • #75487
    Profile photo of Anonymous
    Anonymous
    Participant

    So how do you suggest I value my property when I want to put it on the market?

    You can see how the “think of a figure” comes in as I wouldn’t trust a Spanish estate agent.

    Looking at properties for sale nearby, it doesn’t really add up, and anyway they are still for sale!

    In the UK on a particular property website, I don’t know if I can name it, you can actually look up sold property prices over the last 6 years. Its very scary seeing how property has risen while I have been over here!!

  • #75490
    Profile photo of Anonymous
    Anonymous
    Participant

    arabrab:
    You must also realise that the current prices on the web site you are refering to takes abot six weeks buy the time the land registry updates its records.

  • #75499
    Profile photo of Inez
    Inez
    Participant

    You can get into the land registry files and see prices paid in the UK – but as Shakeel says it will depend on when they traded.

    For a better guide, call UK agents who know how to value property and used to be used (probably still are) in my day by bank surveyors to guage the average selling price and therefore the bank val of a property

    Here, its harder. If you can find out in your area the coeficients (blimey – big word for this early on a tuesday!!) then you can work it out.

    Interior sq mtre rate is the most important, as then a terrace gets around 33% of that as does patio and open parking space, providing its on the escritura.

    Covered terraces and underground carparks and storage rate 50% of interior, basements 33-50% depending on if three is a window and if on escritura – only sqm on estritura counts!!!

    Remainder of land minus build and or terracing rates around 300 epsqm here in Marbella – no idea in your area!

    Once you have that then use 70% as your selling price!

    Otherwise as a rough guide speak to neighbours and try to find out what properties ACTUALLY sold for recently and that will give you your benchmark figure, and if you are using agents, tell them that price and to include the commission!

  • #75502
    Profile photo of Aunty Val
    Aunty Val
    Participant

    The best thing to do is to get three valuations done by local agents. Even if they are complete numpties they should be able to give you a rough idea.

    Don’t tell them what you think it is worth. Don’t give them any information apart from the facts – what is your built area, what land etc.

    That should give you a ball park idea.

    As Inez has said, you should try to find out what has sold recently (either through your own efforts or by asking the agents) – do not compare your property with availalable properties as these haven’t sold and could be very over-priced.

    Currently we are assessing properties (in this area) at an average of 1700 per square meter and then adding or subtracting 10% for benefits or disadvantages.

    So if you have something which is 150 built area that would equate to just over €250,000. Then you can assess what is good and bad about the property and add or subtract accordingly.

    If the views are particularly good add 10%, if the property is beautifully presented add another 10% and so on. Don’t forget to be realistic – if the property has some drawbacks reduce the price accordingly.

    I have a years worth of historic evidence of what has sold in my area and at what prices (capital value and price per square meter) that gives me the basis for all current valuations.

    The only way to approach valuations, is with a whole load of comparable evidence.

  • #75503
    Profile photo of Inez
    Inez
    Participant

    And then cross your fingers when the valuer comes around as at the moment they are all over the place!

    Oh the joys of real estate – who said this job was easy???

  • #75547
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    Anonymous
    Participant

    Thank you for that information, Inez and Aunty Val.

    I have worked it out using the square meterage (including the terraces, which I had forgotten about) and the underbuild. I suppose the 1700 per square metre is an average, and then the land value makes the difference between urban land and a rustic environment, i.e. 300 euros a square metre in Marbella.

    What sort of value does the swimming pool add?

    Thank you for the hint about all of it being included on the escritura.

    I have looked up some advertisements that mention the square meterage of the house and they seem to be in line with this.

  • #75558
    Profile photo of Inez
    Inez
    Participant

    Pool wont add anything Im afraid – just helps the saleability factor! Its akin to having gold plated taps. Look nice but dont add to bank value!

    The valuation in total will be lower if its registered as rustic as opposed to Urban so watch yout for that one and I beleive mortgage percentages are lower as well for buying rustic!

  • #75563
    Profile photo of Anonymous
    Anonymous
    Participant

    I know there are lots of variable still to take into account but this may help

    http://www.cohispania.com/CalculoPrecioVivienda.aspx

  • #75566
    Profile photo of Inez
    Inez
    Participant

    WOW – I tried it on my house which valued up at a min 529,000 euros!

    PLEASE will someone pay that – I bought it for 340,000€ last year!!! And the valuers valued it at 435,000!!!

    No wonder there are problems if the valuers are using this system!

  • #75581
    Profile photo of Anonymous
    Anonymous
    Participant

    Thanks for that.

    Yes, it sure is confusing. No wonder properties seemed to be priced all over the place.

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