The New York Times: A Building Hangover for Spain’s Economy

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This topic contains 18 replies, has 8 voices, and was last updated by Profile photo of Anonymous Anonymous 8 years, 3 months ago.

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  • #54247
    Profile photo of Anonymous
    Anonymous
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  • #85740
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    Anonymous
    Participant

    Quote:
    ““We cannot just grow from real estate and construction,” said José Manuel Campa, a professor of finance at the IESE Business School of the University of Navarra.”

    So, called professor could not see, what had been going on for the last 10 years !. Did he not know that there are curves that can not keep going north for ever. He could not see, that no modern economy, can rely on one sector of its activity. Where were his comments ? why no measure were taken to build a steady, controlled and sustainable construction sector ?.

    “We need to produce goods and services that we can sell to the rest of the world.”

    Typical Spanish, should he not had this professional wisdom before the event. The manana attitude & burying ones face in the sand!!!. What goods & services can be produced in Spain, that others are not producing cheaper, better quality and delivered on time. The Spanish businesses with no ethos for customer care, no after sale service, no reply to telephone calls, fiestas & siestas, lack of staff training thus demotivating them.

    The Spaniards cannot compete in manufacturing/industry until unless they expect that whole world wants to wear Flamenco dresses.

    “The question is,” Professor Campa asked, “can you build that up in the next 18 months?”

    No, you cant, but Spain had time and they wasted it. In fact Spain was lucky that it had a decade/prolonged boom in one sector of its economy. A luxury other nations did not have in recent economic times.

    I, am lucky that Manual Campa, was not my professor of finance. For you doubters. Yes, I do love Spain and it for this reason that I post with passion. To move forward one has to face the harsh realities of life & take timely actions.

  • #85741
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    Anonymous
    Participant

    In Spain we call these type of guys “Analistos” from “Analista” which means analist.

    You call ‘Listo’ to someone when he thinks he is very intelligent but the reallity is another one. 😆

  • #85742
    Profile photo of Anonymous
    Anonymous
    Participant

    Peter, you analyse a situation to take action on the result & take an action in good time i.e not by the time it too late.

    We, don’t want clever people. We want people who have vision, foresight and I expect a professor to have this & if/she does not have than he/she can not produce next generation that can be trusted with the future of a country.

  • #85743
    Profile photo of katy
    katy
    Spectator

    Well said Shakeel 🙂

  • #85744
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    Anonymous
    Participant

    Katy: I am getting extremely worried as you lately been in agreement with me. I must be mellowing. AAAAAAAAARRRRGGGGHHHHH.

  • #85745
    Profile photo of Anonymous
    Anonymous
    Participant

    I also think your opinion is well written shakeel. Spain deserves it’s comeuppance for all it’s wholesale corruption. I’m enjoying reading of it’s downfall.( in the building sector. ) I feel for the innocent people caught in it’s wake.

  • #85746
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    Anonymous
    Participant

    Claire, I have been brought up to not to kick some one when they are down on the contrary I should assist them, so that they can get back on
    their feet. However in this instance, I will make an exception with my conscious clear.

    It should be said that I do not have any axe to grid as all my
    purchases/sales in Spain went extremely well. I use the word extremely with reservations that is, after the horrendous stories that I have read and came across.

    In the current & impending blood bath. I do feel sorry for the majority of honest, decent, simple hard working Spaniards who are caught out by the system that their Country offered to them and us.

  • #85747
    Profile photo of katy
    katy
    Spectator

    My purchases have all gone well too. However when I read all the horror stories I think it could easily have happened to us.

    Shakeel, you are not getting mellow, just realistic and honest. I am (probably) the one who is mellowing 😉 😆

  • #85748
    Profile photo of Anonymous
    Anonymous
    Participant

    Well said shakeel -I agree with your post.
    (Hope this freaks you out a bit more…)

  • #85749
    Profile photo of Anonymous
    Anonymous
    Participant

    Damn, I thought I was going all mellow and as result people may wish to be friends me & I don’t have to draw swords any more.

  • #85753
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    Anonymous
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  • #85756
    Profile photo of Anonymous
    Anonymous
    Participant

    This is a first post on this site, so please forgive me if I fail to pick up the vibes immediately, but I have read a lot of what’s already here.

    I’ve picked up on this thread, but it could have been several of the last few, really.

    Let me just do a bit of disclosure first. I nearly bought on the Costa Brava last year – only a low valuation from a surveyor I should probably thank stopped me. The property in question is still sitting on the agent’s website – and here’s the point, still at the original asking price.

    Now, I know the vendor would have sold at 15% under that – that’s what we’d agreed – the surveyor thought it should have been 22%.

    So, could you old hands, who know this market, explain to me why this happens? Personally I can’t be bothered to try and buy now, because asking prices so obviously bear zero relationship to what anyone is actually prepared to pay.

    Nor, presumably, can anyone else – as evidenced by the stagnant market.

    So, will there come a point where vendors will recognise what’s actually happened in their asking prices, or is it an aspect of Spanish culture which I will need to understand that offers will have to be made, maybe a third or more under the asking price?

    This is all very odd. Unlike one’s main home, nobody has to buy a holiday home. And whilst most sensible folk are happy to negotiate a price when we’re talking about a bracket of 10% or so, this sort of discrepancy unsettles most people. So how will this market unlock?

    I don’t expect to call the bottom in this or any other market, that’s a mug’s game, but how on earth does anyone know what anything is “worth” in Spain right now?

    Just thought I’d ask!

    Thoughts on a postcard to the Costa Somerset.

    Costacraver ❓

  • #85757
    Profile photo of katy
    katy
    Spectator

    The Spanish market seems to be in limbo at the moment. There are many who say they would like to sell but will not sell below a certain price. Could say they are not hungry to sell or they are not desperate. It is not unknown for Spanish buyers to increase the price if anyone is interested. I also know of some who have withdrawn properties rather than reduce anymore. Suppose I am more or less in the dark as you but just thought I would reply 🙂

  • #85758
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    Anonymous
    Participant

    My question would be: when is the best time to negociate with developers: Fall or Spring?

    Do you think that it is more likely to get a big discount for a new property than for a resale one?

  • #85759
    Profile photo of Anonymous
    Anonymous
    Participant

    ” is it an aspect of Spanish culture which I will need to understand “

    Like all markets the right price is what one is will to accept & other is willing to offer. So this is an aspect of the Spanish culture you don’t need to worry about.

    “maybe a third or more under the asking price? “

    You are perfectly entitled to make what ever offer you wish, like in UK. The Spanish can become very sensitive if the offer is too low & further will not take you seriously. Besides they can also get very stubborn and irrational & just wont do business with you. The thinking behind the stubbornness cannot be generalized.

    “Unlike one’s main home, nobody has to buy a holiday home.”

    Not all buyers are buying as holiday homes. Spaniards, buying to live there upgrading/downgrading etc or for their parents. Spaniard also know that if you are buying as holiday home than you either have cash or capacity to raise cash. They also know that give Englishman sunshine & they are yours.

    I hope it helps. Finally it is a mistake to compare the very mature English property market with a evolving Spanish market towards a maturity. This was before the current crises. Besides the market is very fragmented and each town & city has its macro market. l

    And whilst most sensible folk are happy to negotiate a price when we’re talking about a bracket of 10% or so, this sort of discrepancy unsettles most people. So how will this market unlock?

  • #85766
    Profile photo of katy
    katy
    Spectator

    @flosmichael wrote:

    My question would be: when is the best time to negociate with developers: Fall or Spring?

    Do you think that it is more likely to get a big discount for a new property than for a resale one?

    You may find a bigger discount on a new property. However, it will probably be a false discount. Remember the MFI sales in the UK? 25% off everything (after they had hiked the price by 30% 🙄 )

    I have found that all Spanish have an unrealistic value of their properties.

  • #85768
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    Anonymous
    Participant

    “You may find a bigger discount on a new property. However, it will probably be a false discount. Remember the MFI sales in the UK? 25% off everything (after they had hiked the price by 30% “

    I looked at secundamano and searched some developer sites in the regions around Granada and Nerja and the cheapest prices came out the newly build not the resale. With a possible extra 20%-30% discount, prices would be acceptable…

  • #85778
    Profile photo of Anonymous
    Anonymous
    Participant

    Thanks for those two replies.

    I do think there’s difference between new and second-hand sellers in any property market.

    Businesses more often go bust through lack of cash-flow than lack of profit, so you’d expect developers to negotiate prices to keep things moving.

    Private resellers on the other hand are in a multitude of different personal positions and relatively few have to sell. Some will wait for a better price even if it makes no commercial sense, eg. because the cash on deposit for a couple of years would have earnt more income than the discount they’ve refused to negotiate.

    It’s still the asking price in private sales that really puzzles me, but I’m glad it’s not just me that can’t figure it out!

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