Why are prices still not down a lot?

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This topic contains 44 replies, has 9 voices, and was last updated by Profile photo of Inez Inez 8 years, 8 months ago.

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  • #53779
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    Anonymous
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    For what I have heard/read, real estate prices in Spain are down 5/10%. Even, in some places are constant. But there are lots of talk about crisis. Additionally, fundamental reasons should push prices lower (19% of GDP in Spain is construction, as opposed to the US, a 5%). But still everything seems “under control”.

    Do you expect a sell-off in the short-medium term? Maybe when unemployment starts to go up even more?

  • #79993
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    katy
    Spectator

    Unemployment is rising here in Spain. As to why prices aren’t falling…I don’t know. 😕 I think it is a different market here especially in areas where ex-pats buy. Many just sit it out rather than reduce or as some I know have done, withdraw the property.

    I don’t think Spain’s economic position is as healthy as it makes out to be. One newspaper did say to expect some suprises after the election..we shall see!

  • #79994
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    Anonymous
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    @katy wrote:

    Unemployment is rising here in Spain. As to why prices aren’t falling…I don’t know. 😕 I think it is a different market here especially in areas where ex-pats buy. Many just sit it out rather than reduce or as some I know have done, withdraw the property.

    I don’t think Spain’s economic position is as healthy as it makes out to be. One newspaper did say to expect some suprises after the election..we shall see!

    Yes, unemployment is rising, the number of transactions is going down a lot (ytd it was said in Barcelona, a 80% drop), consumption is going down a lot (for example, cars), but when I check real estate agents (not in british enclaves, but in general Spain), offers are the same as they used to be.

    If somebody wants to sell, doesn’t make more sense just reduce the price 10-15% and sell it?

  • #79995
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    katy
    Spectator

    There could be a feeling around that just no-one is interested in buying so even a substantial reduction would not get a sale. That is what happened in the early 90’s. Any serious buyer would go in with at least a 15% lower offer these times.

  • #79996
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    Anonymous
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    Asking price expectations have become absurd. Why? Because lashings of cheap debt drove up Spanish property prices to unsustainable levels. The credit crunch has now turned off the tap. Prices will come down (in some cases already are coming down) for the vast amount of new build rubbish that has been built in recent years (but not for the small amount of quality, or at least not by that much). The Spanish economy will deteriorate from here on, and at some point the property market won’t be able to take it anymore. Bubbles always take longer than you expect to burst, and Spain has a rigid economy that doesn’t respond fast like the US.

    Mark

  • #79997
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    Anonymous
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    @mark wrote:

    Asking price expectations have become absurd. Why? Because lashings of cheap debt drove up Spanish property prices to unsustainable levels. The credit crunch has now turned off the tap. Prices will come down (in some cases already are coming down) for the vast amount of new build rubbish that has been built in recent years (but not for the small amount of quality, or at least not by that much). The Spanish economy will deteriorate from here on, and at some point the property market won’t be able to take it anymore. Bubbles always take longer than you expect to burst, and Spain has a rigid economy that doesn’t respond fast like the US.

    Mark

    then, in your opinion, what will happen? is this rigidity in the economy going to make the crisis worse than in the US?

  • #79998
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    Anonymous
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    @katy wrote:

    There could be a feeling around that just no-one is interested in buying so even a substantial reduction would not get a sale. That is what happened in the early 90’s. Any serious buyer would go in with at least a 15% lower offer these times.

    What happened in the early 90s in the UK? How long did the crisis last? What was the max drawdown: 20/30/40%?

  • #79999
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    Anonymous
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    I can concur with this. I have just returned from the Canaries for the 3rd time in the past year. As far as I can ascertain there has been no appreciable drop in property prices since the last time I was there just over 6 months ago nor are there any immediate signs that they will drop. I made very good offers on a couple of apartments which had been on the market some time (just E5k below asking price), all were rejected. One popular means of development appears to buy up an old tourist complex refurbish it then sell the apartments off as individual private units. The developers are not considering offers despite the apparent slow uptake. Equally new build. Developers want full asking price, not even considering throwing in a few extras. All the estate agents I contacted 12 months ago are all still in business. Nearly all putting the current slow business down to seasonal trends. In fact I would go further. I visited several complex’s where asking price for apartments recently put on the market are higher than those already on the market suggesting asking prices are rising!!

  • #80000
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    Anonymous
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    I know a bit the Canary Islands and they always behave differently as the Peninsula. In the Peninsula, people are starting to become scared. I think nobody thinks in rising prices. But funnily, offers are not going down much.

    A price 10% lower than the max would be, in my opinion, a great trade. But people are not doing it. I do not know if it is because they are stupid (they believe blindly prices will go up indifinitely) or if I am stupid (believing prices will go down).

  • #80001
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    Anonymous
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    Polaris World are doing a 35% discont on the last few off the unsold property on la torre golf resort (murcia) and are selling quite well, they look a very good buy with discount..

  • #80002
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    Anonymous
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    farstar wrote:
    A price 10% lower than the max would be, in my opinion, a great trade. But people are not doing it. I do not know if it is because they are stupid (they believe blindly prices will go up indifinitely) or if I am stupid (believing prices will go down).

    The situation in Spain is similar to the one in USA (both countries are hugely overbuilt with lots of unattractive speculative properties).

    The decline started in USA in Summer 2006. At the beggining people did not want to accept reductions (except the peanuts 5%-10%). This was the denial period.

    Then, at the beggining of 2007, when the spring sale season was a failure, started the
    acceptance period with more drops.
    California fell by 20% in one year, the unattractive areas lost 50%. Places in Florida lost
    60%-70%.

    Now USA is in the panick period, when prices are falling like a rock (California loses about 5% per month, nobody knows when it is going to stop).

    The factor which accelerates the fall in USA is the fact that people can mail back the keys to the banks when they are in negative equities (their credit is of course thrashed, but they manage to rent an apartment before their credit is destroyed).

    If you are looking for bargains in Spain, have patience.

    Out of the 35% off at PW, for the Brits 20% is lost due the loss of £ (as compared to 2007) and a 15% discount in a free-falling market is really a joke.

  • #80003
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    farstar wrote:
    What happened in the early 90s in the UK? How long did the crisis last? What was the max drawdown: 20/30/40%?

    Houses were in negative equity from 1989 till about 1995. May houses did not return to their
    1989 price till 2000-2001.

    So yes, 1994 was a very good year to purchases properties in UK. Whoever had patience to wait 5 years with cash in hand got plenty of bargains.

  • #80004
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    Anonymous
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    Really good comments, Ralita.

    I have just one doubt: I do not know if what is happening in the US will happen in a similar way in Spain. As you said, it is easy to follow the suggestions of a famous american webpages and just give back the keys to your bank.

    But in Spain is not like this: your mortgage is for the rest of your life, irrespective of default or not. In this case, the incentive to give back the keys to the bank disappears, and what happens is that people just reduce completely consumption in order to be able to pay the mortgage.

    I do not know what will happen if this scenario realizes: prices initially get constant. Then, some people default because they cannot pay their mortgage (even though they try hard). I do not know if banks will be “good” and just reduce the debt, or if they will hold their contracts and will expect full payment (partly with the auction, partly with future payments from the ex-owner).

  • #80005
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    Anonymous
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    So, in a sense, in the US, the losers are the investors in the mortgage banks, and the investors in mortgage backed securities. Ex-home owners are the (relative) winners.

    In Spain, banks will be the absolute winners, and consumers and ex-home owners will be the absolute losers.

    The problem in my opinion are the second round effects: in the US, losers will just realize their losses. In Spain, companies will suffer a lot due to the reduction in consumption, and this will create a new crisis.

    Do you see it that way?

  • #80006
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    Anonymous
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    You are perfectly right farstar.

    Why do think Bear Sterns went bankrupt and lost 95% of its value before being rescued by the FED? They invested in mortgage securities and lost. The ex-home owners are somehow winners. People see their house as pure investments and they drop the investment when it becomes a loss.

    Unfortunately I do not have any idea on how things can go in Spain.

    For example:

    – what happens if a British person does not pay his mortgage anymore for a property in
    Spain? How long before he/she is evacuated?

    – is the bank willing to have short sales where the bank supports the difference between the mortgage value and the market value for the property?

    – what happens to the UK credit rating for a person who send the key to the bank in Spain?

    – is the Spanish bank allowed to come after any of the person’s possible properties in UK? If yes, can they confiscate the person’s property in UK?

    Of course this applies to a German, French, Romanian or Swedish buyer too.

    It might be that the reason why prices do not fall like a rock in Spain is the fact that people
    cannot sell a negative equity property.

    Maybe somebody on this forum knows better than me.

  • #80007
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    Anonymous
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    What I know for sure is that if a British (or German, or Spanish, or whatever) has a mortgage with a Spanish bank in Spain, he has this debt until she/he dies.

    I do not know if British people, willing to buy a Spanish property, take mortgages with Spanish banks in Spain, or maybe with banks in the UK. I do not know the proportions.

    But those that have a spanish mortgage: if you have a debt of 200, and the house is auctioned by 150, you have a personal-consumption-type of debt with the bank of 50 for the rest of your life. This, I know for sure. And I know that not many Spaniards know that (but they will learn it in the near future). This is the way a “socialistic” country works (a socialistic for the banks, of course).

  • #80008
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    Anonymous
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    farstar wrote:
    But those that have a spanish mortgage: if you have a debt of 200, and the house is auctioned by 150, you have a personal-consumption-type of debt with the bank of 50 for the rest of your life.

    Then I have no idea what’s going to happen.

    Let’s consider that some British has a house with a mortgage of 300K Euros. The market value goes to 250K Euros.

    The person has mortgage with a Spanish bank which does not want to cooperate and the British person leaves to UK and sends the keys by mail to the bank. He/she plans to never step the foot in Spain again.

    What’s going to happen? Is the Spanish bank allowed to confiscate the UK property or to
    block the UK bank accounts?

  • #80010
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    Anonymous
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    I do not know the answer to your question. In principle, if the debt is 300, and the bank gets from the auction 250, the british has a personal-consumption debt (like the one with a car) of 50. I do not know what happens if the british does not want to pay this debt. I guess that it will depend on how many cases the bank has: for one issue, I do not think it makes sense for the spanish bank to pay a set of british lawyers. For a few dozens, probably it makes sense.

    I do not know if the UK is shielded from European Union issues, and how EU deals with these cases.

  • #80011
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    Anonymous
    Participant

    If people cannot sell properties without being forced to pay the difference due to the
    negative equity, I guess the market will just stall. Prices will not fall but nobody will buy.

    It will be the worst situations for everybody (sellers, buyers, estate agents, banks, etc).

    But then, who is going to be responsible for the fake valuations of the past? The ridiculous prices were due to falsly high valuations.

    The assessor should pay the negative equity difference…

  • #80012
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    Anonymous
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    Hi

    While i have no definitive answer I’m sure you can’t run up debts in Spain then just leave and ignore them. If this is the case please tell me and I’ll dig out the Spanish credit card i have and I’ll Spend Spend Spend.

    You are also making wild predictions based on media speculation, as the original poster says prices have not come down. The media is speculating they will, trouble is while Spain may be in difficulty due to property being a large part of GDP, they are also in Europe and have the Euro as currency. The whole of Europe has to fall to effect the Euro regardless of Spain. The rest of Europe is doing better than that and Spain’s ‘recession’ will be softened by it.

    I also think that as the rest of Europe continues to do well the Euro will be spent were it gets good value …. Spain.

    Just my view

    Regards

    Paul

  • #80013
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    Anonymous
    Participant

    @ralita wrote:

    If people cannot sell properties without being forced to pay the difference due to the
    negative equity, I guess the market will just stall. Prices will not fall but nobody will buy.

    Here the problem is not “If people cannot sell properties without being forced to pay the difference due to the
    negative equity”, but if banks will decide to go to auction or not, knowing that the ex-owner will have a remaining debt. People cannot decide on that, banks can.

    Economically, if increasing the term of the loan has failed, and all the sweeteners to the owner to continue paying but in an easier way have failed, the right decision for the bank is to go to auction. The law is on their side.

    The problem will be the political reaction. Politicians in Spain are highly populistic, and if people start complaining that banks throw people away to the streets with their children, and additionally a loan remains, politicians will have all the incentives to go after the banks.

    The banks, mostly controlled by politicians already (especially the savings banks) will probably nod. But then credit will contract dramatically. Lobby groups will be allowed to have their mortgages dramatically reduced. I do not think british owning spanish houses will be a big, successful lobby.

  • #80014
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    @ralita wrote:

    But then, who is going to be responsible for the fake valuations of the past? The ridiculous prices were due to falsly high valuations.

    The assessor should pay the negative equity difference…

    I like this suggestion. I do not know why, but I think politicians will not buy the idea, though.

  • #80015
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    p800aul wrote:
    While i have no definitive answer I’m sure you can’t run up debts in Spain then just leave and ignore them. If this is the case please tell me and I’ll dig out the Spanish credit card i have and I’ll Spend Spend Spend.

    As you probably know, there is a big difference between secured debts (like mortgages) and unsecured debts (like credit cards).

    If you leave Spain with a secured debt, the house remains there.

    What would be your solution for a person who lost 50K of equity and has a negative
    outflow mortgage+expenses versus rent+personal use? Do you think they are willing to pay hundreds of Euros monthly in negative outflow for a house in Spain? Or do you think they have 50K Euroshandy to pay to the bank?

    Believe me, many thousands will hand the keys to the bank. Banks will not have the time and money to sue everybody who does so.

  • #80016
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    farstar wrote:
    I like this suggestion. I do not know why, but I think politicians will not buy the idea, though.

    Speaking seriously, the banks will be the ones who will eventually take the hit.

    Unfortunately their losses will be paid by people like me or you who were prudent and did think twice before commiting financial suicide…

  • #80017
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    katy
    Spectator

    But we are assuming lots of people can’t afford their spanish property. They may be in negative equity but doesn’t mean to say they can’t pay the mortgage or even have a desire to sell. Lots of properties are bought in spain without mortgages.

  • #80018
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    katy wrote:
    But we are assuming lots of people can’t afford their spanish property. They may be in negative equity but doesn’t mean to say they can’t pay the mortgage or even have a desire to sell. Lots of properties are bought in spain without mortgages.

    I was refering to investors. These people usually took mortgages and were trying to either have a positive flow or a capital gain.

    The tens of thousands of properties which were empty on Christmas day in Almeria and Murcia were not bought by people who want to live in Spain.

    The 70% of the PW properties were bought by investors who now want to sell for a profit.

    Katy, you refer to the people who want to move to Spain or want to have a holiday home for their personal use. They will not care if the house is in negative equity but they are a minority.

    The lady with 5 mortgages from the other thread is part of the majority.

  • #80019
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    Anonymous
    Participant

    Hi All
    This was posted in 2004 ,this is now 2008 😯
    Could be looking at the same thread,same predictions.goes to show we dont have a clue and can only guess. 😉
    This was supposed to have been an expert 😕

    Posted: Thu Nov 11, 2004 4:51 pm Post subject: Re: Costa Del Sol crash?



    Lisa wrote:
    thanx for the info do u think there will b a big fall on the costa del sol in 2005 with over supply?

    Lisa, according to the Economist magazine, they think the Market there is 30% overpriced as does Bill Blevins of Blevins Frank Analysts as well as a host of other people reputedly ‘in the know’. I know quite a few people who cannot sell their properties whether before contract or re-sell after and who are in serious financial difficulty due to the over-hype by some agents including the one mentioned in the Sunday Times recently. you can access this article on this site by clicking on the link mentioned, it’s a good read. I think the market will fall there for the same reasons as it follows the UK market which is also beginning to fall and many purchasers are British and so will feel the pinch.

    Beware the ‘cowboy’ agents who will tell you otherwise!

    Frank 8)

  • #80020
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    Anonymous
    Participant

    Banks will not have the time and money to sue everybody who does so.

    OK so they won’t have time to chase me then, academic anyway.

    What would be your solution for a person who lost 50K of equity and has a negative outflow mortgage+expenses versus rent+personal use?

    Not everyone bought as an short term investment, my goal which is the same as many others who bought in Spain was a holiday home first and investment maybe five ten years down the line. I don’t know what the cost of 10 weeks holiday a year would be in a hotel with my wife and two kids but i would guess it’s more than I’m spending maintaining the place including the interest I could get from investing say £200,000. Plus my in-laws have holidays there as well again increasing the value of the property to my family. So it’s not negative it’s positive for my family at least.

    I think the facts are if you bought as a speculative investment and you couldn’t really afford it, you are screwed.

    like

    The lady with 5 mortgages from the other thread is part of the majority

    Who says she is in the majority, show me some evidence of that? I’m sorry i think that’s rubbish

    Just Frank

    Great great post

    Regards

    Paul

  • #80021
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    Anonymous
    Participant

    Paul.
    Here is another.

    April 2004
    But I could always be wrong! And you could grow old in the cold and rain trying to second-guess the Spanish property market.

    Mark. (You know who) 🙂

    Frank 8)

  • #80022
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    Anonymous
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    P800aul,

    It is good that you are happy with your situation.

    It is quite strange that you do not know that the lady with 5 mortgages from the other thread is part of the majority. You will open your eyes quite soon as see the reality. But maybe you do not want to do so…

  • #80024
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    Anonymous
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    @ralita wrote:

    Houses were in negative equity from 1989 till about 1995. May houses did not return to their
    1989 price till 2000-2001.

    So yes, 1994 was a very good year to purchases properties in UK. Whoever had patience to wait 5 years with cash in hand got plenty of bargains.

    How did it work out? I guess that many impatient people bought during the first year of crisis. Was it a smooth sell off? Or did it went down, then up, then down, …?

    How many people had the patience and cash to wait 5 years?

    How much was the drawdown since the max until the min, 5 years later?

  • #80026
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    Inez
    Participant

    Many people are now in negative equity and therefore cannot sell. You also have many many people who own property which is now deemed illegal and again cannot be sold on – but the mortgages still have to be paid.

    Too many people will have no choice but to let the banks repossess. The banks are taking a lot longer and the courts are clogged up – its seemingly taking around 2 years now, maybe longer in other areas.

    I do think banks will sell at auction then the reamining outstanding debt will be sold en masse to a debt collection agency in different countries. I know this as there is a company I am working with who was originally in Germany, and was advised to move to Spain by a bank who has many defaulters. They will be setting up in the UK.

    To get out of paying any outstanding debts, people will declare bankrtuptcy – this was the way out in the UK 90s and the laws were relaxed accordingly. In the UK there is a time limit for collection of 12 years, dont know about Spain and I have been trying to find out definate answers to all the above!

    No one knows because its a new phenomenon here in Spain.

    I cannot see why you cant see price reductions, every day I am taking on units with reductions, for example an apartment advertised in Riverira del sol at 224k, I have for 180k – with offers considered. Yesterday a chalet Torremolinos owner paid 285k for it 3 months ago will be under 200k. I have 31 3 bed townhouses alicante (yes I know!) bank valuues at 276k, I have for 199k-this is fully financed and includes costs!

    And I cannot keep up with processing the properties that are coming in

    There are still the dreamers who think to sell at 2006 prices they will sell, I tell them they will get 55% of CURRENT bank valuation or Im not interested and neither are my clients. And still they come.

    This is where I expected 06 to be, so its taken 2 years on from my predictions, and mark my words – theres more to come yet!

  • #80027
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    Inez wrote:
    Yesterday a chalet Torremolinos owner paid 285k for it 3 months ago will be under 200k. I have 31 3 bed townhouses alicante (yes I know!) bank valuues at 276k, I have for 199k-this is fully financed and includes costs!

    Who are most of the buyers? Germans, British, Russians, Spaniards, Chinese?

  • #80028
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    Inez
    Participant

    Investor wish I deal with mainly english Irish and spanish. I had an enquiry form a lady today from Sweden for a house, but I would say equal split of the other 3 nationalities

    In a falling market there will always be investors and people to buy property. I know what they go for and myslef and my spanish colleague know how to target.

    still very busy, although a lot of it is getting information and packaging the deals, but the sales come through!

  • #80029
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    Anonymous
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    Inez wrote:
    There are still the dreamers who think to sell at 2006 prices they will sell, I tell them they will get 55% of CURRENT bank valuation or Im not interested and neither are my clients. And still they come.

    Are the prices on kyero.com usually more or less the current bank valuation?

    Or are they about the 55% of current bank valuation?

    When I looked a bit to see properties in Fuerteventura in 2006 I have been shown many crazy evaluations that made the asking prices look very decent… Are these crazy valuations still being made today?

  • #80030
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    Inez
    Participant

    The issue I have with Kyero is they are only asking prices, nothing to do with actual bank valuations, so if someone is reliant on finance, they dont actually know how much they can borrow until the valuation is done. This is causing mayhem as banks are downvaluing to an average of 15% dependant on areas etc, so people are being left having to pay the difference.

    People are crazy with their priices, but if they dont have to sell, then they put the property on for what they want. I filter these guys out as for my clients its a total waste of time. They can go and clog up someone elses website.

  • #80031
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    Anonymous
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    Inez wrote:
    This is causing mayhem as banks are downvaluing to an average of 15% dependant on areas etc, so people are being left having to pay the difference.

    When is the valuation being made? When you say that you tell people to offer 55% of bank valuation, to which valuation do you refer to? I guess sellers are not forced to have a bank valuation before selling…

    Thank you.

  • #80032
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    Anonymous
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    Ralita

    It is quite strange that you do not know that the lady with 5 mortgages from the other thread is part of the majority.

    Strange why, it would apper that you are only guessing?

    But maybe you do not want to do so…

    Only a fool would want the majority to be like that lady with five mortgages, so yes you are correct in suggesting i don’t want it to be so…..

    Paul

  • #80033
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    Inez
    Participant

    Ralita, its a bit of educated guesswork. Having valuations done does cost, some banks will give us a pre val figure but I base it on actual valuations I have had done. This is where I am seeing 10-20% devaluations by banks from properties bought only 18 months ago! eg Paraiso Riviera, valuation a9 montha ago at 238,000 euros, we had a client to buy, asking price at 165k originally, but valuation came in at 301,000 euros. This was because the developer had propertes still for sale and had reduced his price, thereby bringing the euros per square metre figure lower.

    Non residents, in the main, can only borrow 70% of the bank valuation. Buyers who are out there want their costs included, so taking an average of 13%, this means the seller will be offered 57% of the bank valuation for his property. The deduct his costs and agnecy fees!

    If a property stacks up this way, it sells. If not, then it will sit there until someone comes along and falls in love with it

    With the exchange rates as bad as they are, ‘normal’ buyers from the UK have fallen back. Others fro the UE are fine as they are all under euro, but many are frightened off by general econimic instabilty. Its not an essential so they can wait until the time is right for them.

  • #80034
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    katy
    Spectator

    They are still MFI reductions here, you know 50% reduction of a figure they took from the air 😆

  • #80035
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    Inez
    Participant

    I know, but if a bank puts some sort of a value on it, you know you can borrow a percentage of that, and that in itself is at least something rather more concrete than hey man I want to get X€, or next doors is selling for…

  • #80036
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    Anonymous
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    Inez wrote:
    I know, but if a bank puts some sort of a value on it, you know you can borrow a percentage of that, and that in itself is at least something rather more concrete than hey man I want to get X€, or next doors is selling for…

    Inez, thank you for your explanations.

    I have one more question: if one sees a property that is intertested in, can then ask directly for the up-to-date bank valuation? Is seller or estate agent supposed to have it handy?

    Or the potential buyer needs to pay for the bank valuation for every single property that she/he might be interested in buying?

  • #80037
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    Anonymous
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    Hi
    Well I could have based property and equities in the U,K on the basis of expert forcasts at the start of 2007 ,Both would have been a mile out.
    Can I rely on forcasts of property values in the U.K for this year and the answer is of course no.
    There is a world credit crunch and of course there will be deals to be had and many will panic with all the negative news and bail out in many countries.
    In Spain many many properties were over valued i.e had liitle to do with actual valuations so its a simple reality check for them and they are sitting on negative equity at this point in time in the financial cycle.
    Not the first time this has happened a will not be the last,they can choose the realise the loss or look at options.
    Many could have had their money/ pensions in equties and they really have had their fingers burnt and could contiued to do so.
    People will bail out of this also through panic and loose in the longer term.
    Its soooo easy to predict the future and tell people what they did wrong in the past.
    At the moment many will revise their financial future and feel perhaps that pension funds risks are about the same as Spanish property over the medium to longer terms and just sit it out.
    I know many that are doing just that and enjoying their pension in the process.
    Investors, 😯 will have to admitt a wrong call and like any business decision you have to live with it.
    Dont know what it is regarding the building and habitation licences but have a feeling that sorting this out may be one big stalling game in the hope that the market will catch up.

    On another matter ?On a question ask today and I couldnt give a direct answer.
    If you fall behind on payments for utiities etc on a Spanish property is that not a charge on the property.?
    Why is it therefore not the same in a mortgage default ?Why doesnt the same legals apply ?

    Again on another matter for the most negative posters, you are all mistaken regarding the future as Andelusian Dream Homes have just sent me their latest report and they say the future is Rosey 😯 😯 SO THERE 😯 YOU MUST BE WRONG 😕 😕 😕

    Frank 8)

  • #80038
    Profile photo of Anonymous
    Anonymous
    Participant
    Just Frank wrote:
    Hi
    On another matter ?On a question ask today and I couldnt give a direct amswer.
    If you fall behind on payments for utiities etc on a Spanish property is that not a charge on the property.?
    Why is it therefore not the same in a motgage default ?Why doesnt the same legals apply ?

    It is not the same. Not paying utilities is a personal matter.

    People will blame the bank valuation for the high price they paid for the property. Will also
    blame the bank for offering them a huge mortgage for a hugely overpriced asset.

    I am not saying that people will be right to do so, but they will get desperate and will want to get off the hook in any possible ways.

    What I just wrote is not the result of my imagination, it is happening in USA quite often these days. And involves many HIspanics who claim they did not understand the
    English document they signed when purchasing the property and blame the English speaking lawyers and English speaking agents…

    I guess it is similar to British people in Spain…

  • #80073
    Profile photo of Inez
    Inez
    Participant

    Hi Ralita, when I take on a property I try by using comparison figures, to make a judgement on the likely valuation. However for a true val, you will need to get athe bank issuing you the mortgage to do the valaution.

    You can contract a valuation firm to do this, but I find if its not for banking purposes, then they value it more highly – to meak the proeprty seem more impressive I guess! When they value for a bank, they have to be a little more conservative and even then it may not be correct, as then the underwriters in Madrid can down value it further!!! This has happened recently inthe last 2 days, a valuation done for the Halifax in Spain went to madrid and was dropped from 2.1 million to 1.9 million!!

    So – no hard and fast rules. A valuation only lasts for mortgage purposes, for 6 months.

    Estate agents wont pay out for it unless theres going to be a sale and its unlikely owners will, although we do advise them to!

    Hope that helps!

    Frank -Im glad ADH have got it right!!! 😆

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