Terrible day at spanish property market

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This topic contains 24 replies, has 7 voices, and was last updated by Profile photo of Anonymous Anonymous 8 years, 7 months ago.

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  • #53891
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    Anonymous
    Participant

    Today spaniards have seem so bad news like this:

    – Euribor rise to 4,93% and nearing to 5%

    http://www.invertia.com/noticias/noticia.asp?idNoticia=1941124

    – Developers say that they have 60% less of sales

    http://www.invertia.com/noticias/noticia.asp?idNoticia=1941448

    – Electronics retail seller Ivarte with 30 years of history is now history (In bankrupt):

    http://www.eleconomista.es/empresas-finanzas/noticias/495336/04/08/Ivarte-suspende-pagos-la-cadena-de-electrodomesticos-tiene-mas-de-60-tiendas.html

    It seems that worse news are to come so making people more scared about the future.

  • #81786
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    Anonymous
    Participant

    Well, should be some bargains up for grabs soon ๐Ÿ˜‰ .

    No don’t tell me?.

    1. But what about the exchange rate.

    2. What about the global credit crunch.

    3. What about the illegal developments.

    4. What about about all those people who have families etc and can’t buy.

    5. What aout the poor yields.

    6. Theres worse to come is this the bottom?.

    7. I’ve already bought, you’ve got to DYOR and low ball, finger on the pulse etc.

  • #81797
    Profile photo of Anonymous
    Anonymous
    Participant

    @Mary Hinge wrote:

    Well, should be some bargains up for grabs soon ๐Ÿ˜‰ .

    7. I’ve already bought, you’ve got to DYOR and low ball, finger on the pulse etc.

    Can I ask what you have bought/hold?

    Is this for lifestyle/personal use or investment?

    Where do you see the best bargains being located? Golf resorts? a la Polaris World et al?

  • #81801
    Profile photo of Anonymous
    Anonymous
    Participant

    @btloptingout wrote:

    @Mary Hinge wrote:
    Well, should be some bargains up for grabs soon ๐Ÿ˜‰ .

    7. I’ve already bought, you’ve got to DYOR and low ball, finger on the pulse etc.

    Can I ask what you have bought/hold?

    Is this for lifestyle/personal use or investment?

    Where do you see the best bargains being located? Golf resorts? a la Polaris World et al?

    I don’t know a great deal of Spain, to pick up ‘bargains’ you have to know your market intimately (not press cuttings) and be ready to roll (as distressed sellers don’t wait) and be in contact with the right agents, research, research, research. Grow the nose!. I dont see how you can pick up bargains across a ‘broad area’ unless its your life.

    Do real investment bargins exist?. A 20% fall in price in the last 3 months just compensates for ER (to the buyer), it costs 10% to buy a property, can you flip with say 5 -10 % cost to sell in this market (hence a 20% flip premium just covers your cost of sales). Many properties which are currently for sale includes furnishings?, if you flip (on a distressed sale) then what about that cost?.

    I plan to buy property priced at E170,000 three years ago for say E100,000 to E110,000, in a resale market when they are E140,000. Thats my position, I think I may have a chance. But given the above could I flip? – It would be marginal. I won’t be able to rent?. How does the investment stack up if theres not personal use or other reasons? – it must certainly be a long hold.

  • #81804
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    Anonymous
    Participant

    @Mary Hinge wrote:

    I plan to buy property priced at E170,000 three years ago for say E100,000 to E110,000, in a resale market when they are E140,000. Thats my position, I think I may have a chance. But given the above could I flip? – It would be marginal. I won’t be able to rent?. How does the investment stack up if theres not personal use or other reasons? – it must certainly be a long hold.

    So to paraphrase your strategy it is:

    To buy property at a 20-30% discount to current market value, and hold for long term. Property largely standing empty i.e. not generating rental income nor specifically for personal use.

    Have I understood correctly?

    – How much do you intend to invest?
    – How much do you estimate this will yeild over the long term?

  • #81805
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    Anonymous
    Participant

    @btloptingout wrote:

    @Mary Hinge wrote:
    I plan to buy property priced at E170,000 three years ago for say E100,000 to E110,000, in a resale market when they are E140,000. Thats my position, I think I may have a chance. But given the above could I flip? – It would be marginal. I won’t be able to rent?. How does the investment stack up if theres not personal use or other reasons? – it must certainly be a long hold.

    So to paraphrase your strategy it is:

    To buy property at a 20-30% discount to current market value, and hold for long term. Property largely standing empty i.e. not generating rental income nor specifically for personal use.

    Have I understood correctly?

    – How much do you intend to invest?
    – How much do you estimate this will yeild over the long term?

    Firstly.

    ‘nor specifically for personal use’. Did I say that?. I said how does the investment stack up if theres not personal use?.

    Secondly.

    Yield is not important to me, as such, the simply reason is I look at it in terms of a broad range of investments. It sits within a spectrum of investments and I have a ‘purpose’ in mind, not necessarily financial?.

    Thirdly.

    I know someone who amassed a fortune, his motto was essentially that ‘you must do’, I think this was a pop at people who ‘muse without purpose’, whatever he did, he had purpose, and did, then moved on.

    Fourthly

    Get married, have children, go on holiday, go to the pub, buy a new tv, tell me what the yield is?.

    Fifthly

    Who knows what will happen in the long term?. A rough idea at very best?.

    btloptingout, I know exactly where you are coming from, the investment I make may not necessarily be the investment you make. Thats where i’ve pitched myself for this one, i’ll buy at that price.

    Hell, i can make most probably flip even if the market doesn’t pan out or I don’t fancy it ๐Ÿ˜‰ ๐Ÿ˜‰ ๐Ÿ˜‰ .

  • #81806
    Profile photo of katy
    katy
    Spectator

    Spain’s “healthy” balance of payments surplus has halved in less than a year.

    Flipping…whats that ๐Ÿ˜† ๐Ÿ˜† an ancient word from the past ๐Ÿ˜‰ I would say you will be looking at least 5 years before you can “flip” which of course, wouldn’t be flipping then.

  • #81807
    Profile photo of Anonymous
    Anonymous
    Participant

    @katy wrote:

    Spain’s “healthy” balance of payments surplus has halved in less than a year.

    Flipping…whats that ๐Ÿ˜† ๐Ÿ˜† an ancient word from the past ๐Ÿ˜‰ I would say you will be looking at least 5 years before you can “flip” which of course, wouldn’t be flipping then.

    Katy, The ability to flip is based on the price you buy, then sell, relative to market price, of course you can flip, flippings relatively easy, buying the property in the first place to flip is the difficult bit ๐Ÿ˜‰ .

  • #81809
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    Anonymous
    Participant

    @Mary Hinge wrote:

    Firstly…..

    Secondly….

    Thirdly…..

    Fourthly….

    Fifthly….

    btloptingout, I know exactly where you are coming from, the investment I make may not necessarily be the investment you make.

    Apologies, I’m not trying to catch you out here, having read some of your other posts I’m just trying to understand what investments you have in overseas property and what your strategy is.

    From what I understand your have one/some holdings in Spain and something in Bulgaria.

  • #81814
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    Anonymous
    Participant

    @btloptingout wrote:

    @Mary Hinge wrote:

    Firstly…..

    Secondly….

    Thirdly…..

    Fourthly….

    Fifthly….

    btloptingout, I know exactly where you are coming from, the investment I make may not necessarily be the investment you make.

    Apologies, I’m not trying to catch you out here, having read some of your other posts I’m just trying to understand what investments you have in overseas property and what your strategy is.

    From what I understand your have one/some holdings in Spain and something in Bulgaria.

    And some industrial in the UK.

  • #81815
    Profile photo of Anonymous
    Anonymous
    Participant

    and a few companies.

  • #81817
    Profile photo of Anonymous
    Anonymous
    Participant

    and about 1/4 mil in cash (although the corp tax bills due).

  • #81818
    Profile photo of Anonymous
    Anonymous
    Participant

    Mary ๐Ÿ™‚
    Dont care if you are a horse will ya marry me ๐Ÿ˜€

    Just Frank 8)

  • #81819
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    Anonymous
    Participant

    Right so to paraphrase again:

    You’ve got a property in Spain and property in Bulgaria as well as your UK residence. You occasionally use the overseas properties, they are sort of investment come personal use. But weren’t specifically purchased to generate wealth/income.

    In the scheme of things these your property exposure is pretty insignificant in terms of your overall portfolio. So regardless of what happens to the market you won’t be ringing crises line.

    Okay got it, now I understand the angle of your posts.

    …and you’re not a horse but Frank will marry ya anyway….

  • #81820
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    Anonymous
    Participant

    @Just Frank wrote:

    Mary ๐Ÿ™‚
    Dont care if you are a horse will ya marry me ๐Ÿ˜€

    Just Frank 8)

    Unfortunately Frank its not strictly my money, when it gets to this sort of money its not strictly anyones money in a way, not until the chips are cashed in and what’s the point in that :?:.

  • #81821
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    Anonymous
    Participant

    @btloptingout wrote:

    Right so to paraphrase again:

    You’ve got a property in Spain and property in Bulgaria as well as your UK residence. You occasionally use the overseas properties, they are sort of investment come personal use. But weren’t specifically purchased to generate wealth/income.

    In the scheme of things these your property exposure is pretty insignificant in terms of your overall portfolio. So regardless of what happens to the market you won’t be ringing crises line.

    Okay got it, now I understand the angle of your posts.

    …and you’re not a horse but Frank will marry ya anyway….

    Yes and no.

    An ‘investment’ such as buying property abroad for the certain people is more than a ROI in terms of yield, and buying property full stop is more than just a ROI. There are other factors that come into play.

    I mean what has been one the best investment in say the last 5 years?, property?, shares?, ISAS?, cash?. Or something which has an effective zero yield?.

  • #81823
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    Anonymous
    Participant

    “And some industrial in the UK”
    OK, so at present industrial/commercial investments are taking quite a hit in UK for various reasons, few of them related the events from April 1st.
    I would be interested to here of any industrail/commercial investments which you may wish to dispose of.

  • #81825
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    Anonymous
    Participant

    Spanish unemployment has risen today to 9,6%.

    The goverment said that in the worst of the cases it wouldnt reach 10% by the end of 2010.

    We are not even in 2009 and we are near 10%.

    What is next?

    I think Spain will get poorer and again a cheap place for europeans in the mid-term.

  • #81831
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    Anonymous
    Participant

    “What is next? I think Spain will get poorer and again a cheap place for europeans in the mid-term.”

    Things will be much worse that we can imagine at the moment.

    The europeans soon might need to worry more about jobs, food, cloths and heating than about buying holiday homes…

  • #81838
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    Anonymous
    Participant

    @mg wrote:

    “And some industrial in the UK”
    OK, so at present industrial/commercial investments are taking quite a hit in UK for various reasons, few of them related the events from April 1st.
    I would be interested to here of any industrail/commercial investments which you may wish to dispose of.

    ๐Ÿ˜†

    Where would those companies do business to churn out that cash pile to pay to that pension in which those properties are in?.

    I am a very good tenant, with a 30% tax break on efective purchase and effective 25% tax break on effective sale.

  • #81850
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    Anonymous
    Participant

    @Mary Hinge wrote:

    @mg wrote:
    “And some industrial in the UK”
    OK, so at present industrial/commercial investments are taking quite a hit in UK for various reasons, few of them related the events from April 1st.
    I would be interested to here of any industrail/commercial investments which you may wish to dispose of.

    ๐Ÿ˜†

    Where would those companies do business to churn out that cash pile to pay to that pension in which those properties are in?.

    I am a very good tenant, with a 30% tax break on efective purchase and effective 25% tax break on effective sale.

    Excuse my ignorance but please could you translate that?
    I enquired about the availability of a commercial investment, to be told you are a good tenant.
    Now I am confused.

  • #81851
    Profile photo of Anonymous
    Anonymous
    Participant

    They were brought through a pension scheme and leased back.

  • #81853
    Profile photo of Anonymous
    Anonymous
    Participant

    Many thanks. That explanation is simple, it is just the “Where would those companies do business to churn out that cash pile to pay to that pension in which those properties are in?. ” that threw me a bit.
    I an not surprised that you consider yourself a good tenant. Not many people would consider they or their companies are bad tenants, otherwise where would they get commercial landlords to take them on, unless it is for mor back street premises.

  • #81855
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    Anonymous
    Participant

    @Mary Hinge wrote:

    They were brought through a pension scheme and leased back.

    Sorry, just to clarify…..

    – You have a personal pension plan which has bought a (some) commercial property (ies).
    – You have businesses that you own that lease these properties from the pension.

    Does your pension own these properties outright or are they mortgaged?
    Is there any downside to this operating mode?

    Just curious, sounds like a nice way to operate, something i’d consider doing myself.

  • #81856
    Profile photo of Anonymous
    Anonymous
    Participant

    @btloptingout wrote:

    @Mary Hinge wrote:
    They were brought through a pension scheme and leased back.

    Sorry, just to clarify…..

    – You have a personal pension plan which has bought a (some) commercial property (ies).
    – You have businesses that you own that lease these properties from the pension.

    Does your pension own these properties outright or are they mortgaged?
    Is there any downside to this operating mode?

    Just curious, sounds like a nice way to operate, something i’d consider doing myself.

    Hi Btl

    Yes, we are talking commercial property here, not obviously holiday homes/non commercial property as this is no no for a pension scheme.

    The companies pump money into a pension, receive tax relief as pension payments all allowable against corporation tax (20% – 33% depending on marginal corp. tax rates). The pension buy property and lease them to the companies at commercial rents. When you retire sell the properties and then 25% of the pension pot can be taken tax free the rest is taken as a normal pension until death subject to tax.

    They are mortgaged, a pension (I am not 100% sure on this as I have advisers) can mortgage to 50% of the fund value. Hence if you buy a property for ยฃ150K the most you can borrow is ยฃ50K (ยฃ100K invested is the fund value, hence only ยฃ50K can be borrowed), but I am not 100% sure on this as the investing was done prior to what is known as the A day rules hence we invested under ‘old rules’.

    Other than that obviously this is a very long term play, once the money is injected in the pension scheme, it is there until retirement (which is I believe is currently at the age of 50 changing to 55 and beyond), you can liquidate the fund early but the revenue take a big chunk.

    A good company scheme (or a personal pension plan as a substitute), can cost a bit to administer, you could be looking at ยฃ2K to set one up, then ongoing fees (flat and % of contributions). Obviously depends up advisors.

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