Is there demand for holiday-homes if the price is right?

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This topic contains 19 replies, has 12 voices, and was last updated by Profile photo of katy katy 3 years, 9 months ago.

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  • #57283
    Profile photo of Anonymous
    Anonymous
    Participant

    Sometimes things have to be cheap to sell, and sometimes they have to be very cheap. It depends on the market.

    I’ll give you an example: I’m trying to sell a motor-boat in Formentera. It’s in perfect condition, and in normal conditions I would expect to sell it for 50pc to 70pc what it cost me new. But to sell it today, I’ll have to accept 25pc, maybe less. But I know I can sell it if the price is right. On the scale very cheap – cheap – about right – expensive – very expensive I’m going to have to accept very cheap.

    So I’ve been thinking how Spanish holiday-homes might fit into this scale, given the current economic situation in Europe. At what price is there any European demand for holiday-homes in Spain?

    I believe there is still demand. At least I can see evidence of it. I assume that’s because, for all its imperfections, Spain is still a very attractive country and culture to live in. And I think that demand is sufficiently strong and diversified for sales to happen when the price is right.

    I don’t think anyone will pay “expensive” prices nowadays. Maybe in London or Paris, but nowhere in Spain. So I’m wondering, is “cheap” enough, or does it have to be “very cheap”?

  • #115354
    Profile photo of angie
    angie
    Spectator

    I think if holiday homes in Spain are really cheap and, importantly the maintenance/community costs are also cheap/inexpensive, there will be demand for them, especially from Northern European/Russian people. Less so for Brits. with dire current exchange rate 🙄

    Spain also has to compete with the France and Italy although their property market seems to hold up better, and in the case of France, Brits. don’t mind driving there.

    But then, even cheap may not be worth it when you can go to hotels and villas without the maintenance costs or worry of ownership.:roll:

  • #115358
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    With the numbers of people working on the web nowadays, I think a prime consideration will be high-speed internet access. Town properties will have an advantage over those in the campo.

  • #115360
    Profile photo of angie
    angie
    Spectator

    Gosh, I agree with you Marcos. 😯 We have friends who live in the campo in the Guadalhorce valley area, their internet is poor and consists of a dish pointing to another dish so if 1st has a problem, they have too, it’s often going wrong due to high winds. Their phone line is as bad, always cuts out or voices sound like daleks, and, they have to collect post from a newsagent in town. Mobile phone reception doesn’t work either there 🙄

  • #115364
    Profile photo of Igurisu
    Igurisu
    Participant

    It will depend how much research people do. I think the new taxation rules will seriously hinder Spains ability to attract the volumes of expats they were used to in the past. So many people used to spend the winter in Spain, typically October through to March. Unfortunately with the recent changes this is over 90 days and so you automatically become a resident of Spain. As such you then have to pay taxes on all your worldly assets! ! !

    I can’t help but think that these new tax rules/laws are short sighted and the gorvernment have really shot themselves in the foot with this one. Only my opinion with no facts to back it up, but I guess that the increased revenue from the taxation will not compensate for the loss of revenue being spent by winter vacation people and people who no longer buy in Spain due to the taxation.

  • #115369
    Profile photo of Anonymous
    Anonymous
    Participant

    Angie, you are right that ownership costs have to be taken into account as well, though some people tend to forget that until it’s too late.

    And Pete, I couldn’t agree more. They should make Spain a non-dom destination where retiree expats can live without any tax worries other than a tax on income they bring into Spain. That would make it an attractive destination, drawing in lots of people, creating wealth and employment. They would all need somewhere to live, which would go some way to solving the housing glut too.

    That would be much more effective in solving Spain’s economic problems than a free residency pass to people for non EU nationals who spend more than 160€k on property.

  • #115379
    Profile photo of Anonymous
    Anonymous
    Participant

    Having owned a holiday home in spain for 7 years and sold it last year, I think as Angie says the cost to buy a property may be cheaper. But hidden costs of maintaining the property, insuring, taxes, high commissions that spanish banks charge just for having an account, and the every increasing prices of flights to get to your property in Spain make it a no for me. I rather rent a nice villa, enjoy it and leave all the hassle to owner.

    Angela

  • #115380
    Profile photo of Anonymous
    Anonymous
    Participant

    At the right price everything sells. I would buy and Im not alone but prices must come down a lot for that kind of effect.

  • #115382
    Profile photo of logan
    logan
    Participant

    Yes folks it’s the overheads imposed by government and increasingly communities as they struggle with owners not paying their community charges.
    For large developments with 50-60% debtors they face escalating costs and either terminate their service contracts or their employees with all that entails or increase fees for existing owners who do pay. It’s a vicious spiral and anyone buying into these places now faces huge future bills. Even under some circumstances they may find themselves being liable for the bills the previous owner failed to pay.

  • #115396
    Profile photo of katy
    katy
    Spectator

    Spanish communities are strange things. They look on foreigners as cash cows and draw one-off payments out of the hat. In 1995 we bought 2 properties from a bank. All was well, most of the owners were from Madrid and the community was well run although fees expensive. We sold in 1997. About 6 months later the community slapped on an equivalent of about £4000 per house charge to pay a disputed bill with the water company. This had never been mentioned in the community minutes. The buyer came back to us saying we should pay, I told them to see the bank who sold to us as it didn’t happen on our watch!

    Our last community charged 850€ pa even though it was just private villas in large plots. This was for the upkeep of a couple of roundabouts, street lighting and security patrol in the night.(I may be naive but shouldn’t marbella council have paid for street lighting out of our 12000 council tax 😡 ) In 2006 we had a one of payment of 750€ for improvement to road bumps. The year before we left the community decided that all the infrastructure need updating including underground phone and electricity cables (what happened to utility companies paying for this 😕 ) The cost of this was to be around 9000€ per plot…we had 2 plots 😯 Who in their right mind would want to pay that when the market had started to plumment! They were still wrangling about it when we left. Many others have similar stories.

    Then there are accounts that have 23,000€ stuffed into “sundries” 🙄 Another community which hit the local marbella news. Buyers who bought off plan were faced with community charges of 4800 pa as the committee was dominated by the developer and friends!

  • #115484
    Profile photo of zenkarma
    zenkarma
    Participant

    @mark wrote:

    So I’m wondering, is “cheap” enough, or does it have to be “very cheap”?

    Well, cheap and very cheap are just words, they need some context, cheap and very cheap compared to what?

    I actually don’t think it’s property prices that is the main problem. It’s never been cheaper, at least not in the past 15-20 years to buy a property in Spain what with rock bottom interest rates and even taking into consideration the weaker pound against the Euro. If you don’t need a mortgage, have cash in hand and are prepared to be patient and negotiate you can really pick up some good property deals in Spain at the moment. That’s not to say the current asking prices are realistic, many of them aren’t, but there are still bargains to be had if Spain is where you’ve chosen to retire or relocate to.

    But I don’t think it’s the property prices that’s the problem – I think it’s the increased cost of living, weakness of the pound against the euro and the tougher tax laws the Spanish government are enforcing that’s putting people off. The pound has almost reached parity with the Euro now – that makes everything much more expensive and that comes on top of already significant inflationary increases on food, petrol, energy and so on.

    Why go to Spain and gamble on their dodgy property market, I say dodgy because no-one really knows what it’s going to do in the future be no better off financially than you are in in UK for a bit of sunshine and an ‘Alice in Wonderland’ bureaucratic system?

    The appeal of Spain has definitely lost its lustre and that is why so many people are simply returning home.

  • #115486
    Profile photo of Chopera
    Chopera
    Participant

    @zenkarma wrote:

    @mark wrote:
    So I’m wondering, is “cheap” enough, or does it have to be “very cheap”?

    Well, cheap and very cheap are just words, they need some context, cheap and very cheap compared to what?

    I actually don’t think it’s property prices that is the main problem. It’s never been cheaper, at least not in the past 15-20 years to buy a property in Spain what with rock bottom interest rates and even taking into consideration the weaker pound against the Euro. If you don’t need a mortgage, have cash in hand and are prepared to be patient and negotiate you can really pick up some good property deals in Spain at the moment. That’s not to say the current asking prices are realistic, many of them aren’t, but there are still bargains to be had if Spain is where you’ve chosen to retire or relocate to.

    But I don’t think it’s the property prices that’s the problem – I think it’s the increased cost of living, weakness of the pound against the euro and the tougher tax laws the Spanish government are enforcing that’s putting people off. The pound has almost reached parity with the Euro now – that makes everything much more expensive and that comes on top of already significant inflationary increases on food, petrol, energy and so on.

    Why go to Spain and gamble on their dodgy property market, I say dodgy because no-one really knows what it’s going to do in the future be no better off financially than you are in in UK for a bit of sunshine and an ‘Alice in Wonderland’ bureaucratic system?

    The appeal of Spain has definitely lost its lustre and that is why so many people are simply returning home.

    I agree on the whole. To be honest I doubt if certain parts of Spain had any lustre in the first place – it was more herd mentality that drove some people over there. However there are other parts of Spain well worth exploring, and of course to live in Spain doesn’t mean you have to buy in Spain.

  • #115492
    Profile photo of logan
    logan
    Participant

    Yes I agree the Spanish government and the economic recession has made Spain a very unattractive investment destination when it comes to holiday homes.
    The steeply rising costs, and uncertain future is likely to persist for many a year to come. Rock bottom headline price is no longer a catch-all. Most people can see through that and research the real and potential hidden costs and run for cover. At least folks with common sense do. 😆

  • #115493
    Profile photo of zenkarma
    zenkarma
    Participant

    @chopera wrote:

    I agree on the whole. To be honest I doubt if certain parts of Spain had any lustre in the first place – it was more herd mentality that drove some people over there. However there are other parts of Spain well worth exploring, and of course to live in Spain doesn’t mean you have to buy in Spain.

    15-20 years ago Spain was definitely an attractive proposition – that’s what really fueled the housing boom. Relatively low and affordable to UK standards (in comparison to the UK which was on an upward trajectory) property prices, a significantly lowered cost of living in terms of a strong pound to euro (£1 to €1.50) exchange rate and significantly lower consumables such as food, booze, tobacco, petrol, energy and so on. But Spains membership of the EU and single currency changed all that – it simply brought it in line with the rest of Europe – it’s no longer cheap any more.

    You can understand why so many people from the UK saw the attraction Spain offered, their chance to live the ‘dream’ in the sun. But the problem was, many of the ‘herd’ you rightly mention, didn’t do their sums and didn’t do their research. They based their dream on shaky financial foundations assuming of course that the boom would continue and had no plan B should the unthinkable happen and the whole Eurozone would fall into recession. That wasn’t their fault, but suffered because they didn’t have the necessary financial backing to sustain themselves.

    Of course living there doesn’t mean you have to buy, but given that anyone resident in Spain for more than 183 days a year is considered a tax resident – that means declaring and paying Spanish taxes on all your worldwide income. Anyone trying to live there off interest on savings gets hit by a triple whammy. Deadpan interest rates, almost parity exchange rate and to add insult to injury tax on top!

    Spain just isn’t anything like attractive a place to live as it used to be – low property prices or not.

  • #115496
    Profile photo of katy
    katy
    Spectator

    So true. Around 1995 we were getting 15% interest from our Spanish bank and so many pesetas to the pound I can’t remember how many 😆 Did have plan B. saw the train crash coming.

  • #115497
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    But I don’t think it’s the property prices that’s the problem – I think it’s the increased cost of living, weakness of the pound against the euro and the tougher tax laws the Spanish government are enforcing that’s putting people off.

    No, it is the rotten global economy that is keeping people afraid and staying in place. The idiocy of austerity, which is gutting Spain and creating the justified civil strife is also to blame.

    OK, the VAT has gone up, but other than initial costs of buying a home, who is really affected? People who have such marginal incomes, who would be GREATLY affected by fluctuations in taxes, etc, have no business purchasing anywhere.

  • #115503
    Profile photo of zenkarma
    zenkarma
    Participant

    @garysfbcn wrote:

    No, it is the rotten global economy that is keeping people afraid and staying in place.

    It’s the same rotten global economy that is making Spain an expensive place to live or at least no better than the UK, despite the low property prices there. Add in the 25% unemployment which puts jobs out of reach, because there aren’t any and many potential emigrants are not attracted to Spain as a reasonable proposition. That’s not stopping retiree’s though, they’re still going there for the simple reason that they don’t have to work.

    I have a property in Spain and I have a property in the UK, but given the pathetic interest rate I would get if I sold up and put the money in the bank makes the prospect of moving a marginal one.

    @garysfbcn wrote:

    OK, the VAT has gone up, but other than initial costs of buying a home, who is really affected?

    People like me. I don’t have to buy, but I could go and live there, but given the almost parity in exchange rates and cost of living there’s very little advantage for me of going to Spain to live or saying in the UK.

  • #115505
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    People like me. I don’t have to buy, but I could go and live there, but given the almost parity in exchange rates and cost of living there’s very little advantage for me of going to Spain to live or saying in the UK.

    The advantage is living is a place where you can have the life you want. If Spain is your dream or if you find the climate in the UK just too dreary, AND you have the means, the VAT and other nuisance fees that are going to come and go in MANY countries, shouldn’t inhibit you from moving.

  • #115516
    Profile photo of Anonymous
    Anonymous
    Participant

    €12,000 rates?? surely not in elviria K, not even for a grand mansion in LZ; you been sipping again??

  • #115520
    Profile photo of katy
    katy
    Spectator

    @UBEDA wrote:

    €12,000 rates?? surely not in elviria K, not even for a grand mansion in LZ; you been sipping again??

    Sorry Ubeda, one nought too many 😳 Very observant of you 🙂

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