There are several reasons as to why second homes are purchased which can range from finding work away from home, as a buy to let investment and as a vacation home. There is also a congruence in the relationship between holiday homes and retirement homes. Many people retire to where they habitually go on holiday. This is particularly true if for example they become members of golf clubs and integrate with an international community who all share the same passion for their chosen lifestyle.
At some stage in this process the primary home is sold and the second home becomes the retirement home, there is no further purchase of a home abroad. Many of those who are thinking of retiring to Spain have already purchased the property they will ultimately retire to and the expectations that millions of northern Europeans are going to buy retirement homes in Spain are unfortunately optimistic. Many retirement homes have actually already been purchased and will be morphed from holiday to retirment home.
When borrowers come under pressure from the banks and can’t sell their holiday home to raise finance, they may be forced into selling their primary home, and can then afford to take the second home off the market. Others are more fortunate and can continue servicing their loans and some will re negotiate their loans or move from one lender to another. Carefully investigate as to why homes have been taken off the market. Also consider that the supply of homes may still increase and market conditions may still deteriorate.
This forum has been instrumental in helping us all to understand some of the complexities of a property market and how speculation can distort the market in such a way as to defeat even the most respected analysts in Spain. I feel that this has happened and that the reality of where the market is has not yet been understood or accepted.
If we return to Marks question, soft landing or train wreck, I freely admit that I have voted suggesting a train wreck. By definition a soft landing requires some form of stability in the market or better some form of recovery. The gradual deterioration we have witnessed to date reflects the time it takes for banks to decide when to tighten credit and when to start the foreclosure process. So initially the pain will be gradual and there will be some misguided bargain hunters, thinking that the market will not deteriorate further, who buy. The wise will wait in the knowledge that a rising tide lifts all wrecks but when the tide goes out the hulls come into full view and reveal the true state of affairs. Avoid the peaks and troughs for these moments in the market are for speculators, wait until the tide comes in again before buying. There is no point in selling well to buy badly. If you have been fortunate enough to sell, keep your powder dry, keep your money on deposit, however boring that might be as there will be some spectacular opportunities, when all this blows over.