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Interesting article in El País about the property market downturn on the coast. I agree with most of it, but think it’s too optimistic about how soon the market will turn the corner.
http://www.elpais.com/articulo/economia/batacazo/empezo/costa/elpepueco/20071123elpepueco_6/Tes
Mark
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mark wrote:Interesting article in El País about the property market downturn on the coast. I agree with most of it, but think it’s too optimistic about how soon the market will turn the corner.
http://www.elpais.com/articulo/economia/batacazo/empezo/costa/elpepueco/20071123elpepueco_6/Tes
Mark
10% discount is a joke not a discount. The developers in Spain should get real and start offering real price lowerings. A 30% off would be a good start and will raise some interests.
This will bring down the reasale price too and the market will heal itself sooner.I
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Does sound optimistic 😆 I never trust spanish figures, even Brussels often ask for them to be revised.
What I find strange is they are STILL starting new developments. I cannot believe they are naive so what is behind it all 😕 When I drive down the toll road (CDS) there is at least the beginning of one new site (some of them like a village. All on the wrong side of the Toll road and miles from anywhere! -
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What I find curious about all this new construction is where developers are finding the funds to continue building ?
I would be very surprised to learn that it was from their own funds and can only assume that most of it is being raised from the financial markets. However, in today’s financial climate where money supply is tighter and banks worldwide are supposedly much more vigilant in their lending criteria, I cannot but wonder who is lending money to spanish developers, particularly as it seems obvious that Spain has an over supply of property
Richard
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Hi
Banks are lending, people are still buying so while the profits’ of doom on insular U.K forums predict Armageddon ,reality is they are simply guessing the future. 😕
The worlds a big place and predictions vary in every country and as we all know forecasts’ are based on information at hand and what MAY happen in the future IF THIS AND IF THAT happens however for instance a sharp reduction in interest rates and its all change. 🙂 😥
80% of financial institutions’ predicted that the F.T.S.E would finish 2007 at around 7,000 and these are supposed to be the experts. 😕
If anyone was to base any decision based solely on a forum that by its nature is for people that have had bad experiences or to create bad news to sell then that would be a problem. 🙄
Important as our experiences are to potential future buyers the majority of people have had positive experiences in buying and moving to Spain.
There are issues including a legal system that while it may or may not be perfect lets be clear that no countries has one and now very supportive and genuine posters are now avoiding the forums because they are somewhat one sided including advisors whoes input is very welcome.Just Frank 8)
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@Just Frank wrote:
Hi
Banks are lending, people are still buying so while the profits’ of doom on insular U.K forums predict Armageddon ,reality is they are simply guessing the future. 😕Of couse, no one can tell the future.
@Just Frank wrote:
and now very supportive and genuine posters are now avoiding the forums because they are somewhat one sided including advisors whoes input is very welcome.
Just Frank 8)
Is there currently any positive aspect to Spanish property investment?
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….as against a ‘HITS’ merchant.
Head In The Sand@mike wrote:
Is there currently any positive aspect to Spanish property investment?
Yes, be patient and in the future you could get an absolute bargain.
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@charlie wrote:
….as against a ‘HITS’ merchant.
Head In The SandI’ve never heard that one before, good one.
@mike wrote:
Is there currently any positive aspect to Spanish property investment?
Yes, be patient and in the future you could get an absolute bargain.[/quote]
The idea of living in Spain bores me now, it’s only the property market that fascinates me.
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Hi Mike
No not alot of positives at the moment and fear there wont be for some time.
Charlie 😉 ,Yep there will be some real bargains,please read my post again.
There is doom and gloom and there is also some good for many people.
Personally I cant see whats wrong in in posting the bad and also the not so bad as its tough enough as it is for soooo many.Frank 8)
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@Just Frank wrote:
Personally I can’t see what’s wrong in posting the bad and also the not so bad as its tough enough as it is for soooo many.
Absolutely Frank. 🙂
At least you’re not just sitting and thinking but actually making some contributions for discussion.Hard facts/total insight about the future are an impossibility, but the ‘unknown’ does make for a good debate.
Viva all our differences of opinion, I say, even though at times you may be ‘dealing’ or debating with the devil, eh Frank. 😈 😉 -
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Just Frank’s optimism does sound like that of somebody desperate to sell home, but I agree that the SPI forum has become too often a site for sore losers. More accurately, a site for people who are losing out because the Costa del Sol is an overbuilt dump where nobody I know in England would even contemplate moving to at the moment. However, it’s not all doom and gloom and perhaps it’s time for those of us with homes in other parts fo Spain to have a say here on occasions. We have a house in Begur in the region of the Costa Brava which isn’t Lloret or Tossa. This part of Spain is beautiful, green, stylish and not overrun with Europeans. We don’t care about making money on our home, but we have – and prices are most definitely not dropping. This region has learned from you guys in the south and restricted new-builds to a relatively small number of villas. The users of this foum do seem to be terribly disheartened about what is happening to the Spanish property market, but look away from the CDS and there’s plenty of good news. And do I ahve sympathy for you. Yes, for those who moved to the south coast many years ago and have seen it transformed. No, for those who thought they were buying into a dream in recent year without doing any research – or making any attempt to learn the language.
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Yes it is a nice area, about 5 years since I visited. Probably a bit chilly in winter though. Are you selling as well 😉 🙂
I don’t think you can/should make sweeping statements about a whole coast. I agree much of it is blighted, as is Murcia, almeria and some parts of the Costa Brava, infact all the costas! However, there are some small privileged areas left, even in marbella.
Not sure what learning the language has to do with it if people thought they were hiring a competent Lawyer 😕
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erm….I’d like to know Katy where to find the unspoilt stretch of the Costa del Sol…my reference to speaking Spanish was perhaps superfuous, but I feel it’s indicative of the number of Brits who come to Spain without doing their research and without ever buying into the Spanish way of life. And, no, I wouldn’t dream of selling unless it was for a better property in the same area of Catalunya.
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So you know the whole of the costa del sol do you? I have had property here for over 20 years and I wouldn’t say I knew every nook and cranny! (and I do speak fluent spanish).
I could direct you to probably one of the best beaches in spain or some of the best countryside for walking and its right on my doorstep. A beach without any buildings, shops or a promenade. Houses without another house to spoil their view. Of course, one doesn’t see these places shooting along the A-7 but they do exist! If I wasn’t such a luddite I would post a couple of photos. 😳
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There are pockets of paradise in every overbuilt corner of the world, not just the CDS.
Along with the overbuild comes faster roads, 24hour shops and all the ‘things’ that us spoilt Brits come here to Spain and complain about and yet are injecting life and money into its indiginous population!
No one has to live here, and equally no need to knock it either, each to his own. I have been coming to this part of Spain for over 30 years, with my parents and then moved out for good with young kids. The transition from a country where everything is available 24hours, to one where you buy the seasonal food and learn to cook with it was an incredible journey.
I sometimes whine about the builds, but equally I am glad that for the last 3 years my daily travel to work in Marbella from Fuengirola wasnt over an hour long, as it used to be. And grateful there is work I can do to provide my children with a much higher standard of living and education than in the UK.
I love the still found simplicity of life in general, being able to walk out at night not freezing my whatsits off, eating excellent food cheaply, either indoors at home or out, finding the taste of food so much better than elsewhere, and the unbeatable weather!
There are plenty of underdeveloped and original buildings areas, parks and land in Marbella, Estepona and beyond – if you know where to go!
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Hi 😕
Just read my postings again and can only see the negatives. 😥
1 Properties worth at best the same as 2002,many alot less if they paid to much.
2 Many are going to loose alot of money as they cant sell due to no buyers or no legals or both.
3 Property in less desirable positions/smaller and 1 beds you might as well as forget it
4 Its very tough times.
SORRY ,I SEE MY MISTAKE 😕
I SAID THAT MANY WERE HAPPY 😕 😕 ,SORRY ABOUT THAT.BULL-S-IT
WHICH RESULTED IN HEAD IN THE SAND COMMENTS. 😕Frank 8)
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Stevev6
sorry for going off topic, just trying to have a bit of fun while making a point.
Getting back to katy’s point on the first page. Who is still buying in to dubious off-plans that are still being built, despite hundreds or thousands of properties that are almost impossible to sell unless they are sold at a very low price? Is it just that they have been planned for so long it’s to late to stop?, or are some agents still able to sell the dream?
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Hi goodstich
I dont mind if people go of topic, just have seen so many threds go down hill with silly bickering.
To answer your question,I don’t think much is selling at all,and i think it is thousands not hundreds.
I have an idea that one day a lot of properties will end up as social housing for generations of young spanish.
The real question is WHY ARE THEY STILL BUILDING do they know something we don’t.
Why don’t they build infastructure to surpport the existing communitys instead of housing for a few years,I’m sure the EEC would pay if Spain asked them nicely.
Developers may have many faults in Spain but they are in business to make money,if they continue to throw uo 2bed 2baths they are doing it for a reason.
SV
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Hi Steve 6
Thats where I can in.
They are still building and take it they must be selling. 😕
As you say they are in business so why keep building because where we are looking it seems like commercial suicide.
Are the new developments back to prices of 2002 or cheaper ,there just dosent seem any accurate figures to base any statements of property falls.
What areas as to say costal properties is a damn be coast ?
We know we have desperate sellers looking to get out due to personal or because the property values/legal status etc.
As said we also have many properties that may become legalised together and this can be seen as positive because the property is legal or negative because a flood of properties may come on the market together.
Why become personal as these seem genuine questions that should be able to be brought up on a forum.Frank 8)
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Many of these developers bought land years ago. They can afford to sell anything new that they build at 2002 prices and still make a decent profit. All the inflated prices since that time were just that, inflated. They could get away with asking silly prices so they did. 400,000 euros in some cases for an apartment 120 square metres multiplied by however many appts. made a ridiculous profit for them (plus plenty of money to pay high agent commissions/brown envelopes), so getting back to the topic of the thread, yes – prices will drop dramatically, especially along the coast for off-plans but only to a more realistic level. I acknowledge the exceptions however that Inez pointed out on another thread, that the luxury end of the market will be able to afford to ride out the inevitable ‘storm’ ahead.
Why are they still building? Heavy loan commitments on the land they bought and want to see a return, however small? Paid so much money to get the building licence in the first place and maybe there’s a time limit on the validity of that permission….? Want to build before stricter regulations come into force? Directors with their heads in the sand? The list is probably endless, as is the ruination of many parts of the coast unless something drastic is brought into play. Because of the vast amount of mediocre developments where I can’t imagine any Brit. would want to buy into, agree with Steve that the majority could end up as social housing. So at least some good could come out of all of this albeit not how many developers imagined…..tears could be shed over all the unnecessary expenditure producing those lovely glossy brochures! -
The REASON why these developments are still being built is firstly the developers will have taken a certain amount of deposits on the off plans and therefore are under contract to build. Secondly, once the project is in place, which costs an awful lot of money, there is a time limit to start the build otherwise they have to reapply again. However once started, they can drag their heels. The backing bank will be pressing them to srart as then the deposits paid can go into thier pot to pay the loan, and the faster it gets built, the sooner buyers are assumed to complete.
The building will continue and new starts will continue until time catches up – ie as buyers were still rushing in with both feet until around 06, then you can safely expect newbuilds to keep starting until probably end of 08/09.
Then it finally catches up with itself. Many developers will be proceeding slowly in the hope of selling a few more units to at least break even on their costs, then they can sit back and sell the rest at the price they want as it is their profit they are playing with – and if no profit, then no tax to pay which also helps them!
You will find developments 30 – 40% occupied witht he developer in control of the community meetings! Now thats fun – and fact!!
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Hi Chalie + Inez 😉
Two replies that agree and further confirms that the rough times are only just beginning.
Seems its heads down to ride the storm or cut looses and move on.
Think there will be posters with the same or similar problems to many of us for years to come.
Perhaps its good that some are around to help and give advice on their experiences.Frank 8)
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Yes its going to be rough, but also for others this will be a good time to buy – fingers crossed I have done ok this week so far – still gotta get them through but i assure you the market is far from dead, either with individuals or with consortiums buying large amounts.
As the prices come down, there is more interest, snd from serious buyers!
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Inez, I take on board all what you say. But I am surprised. With the current massive over-supply in Spain coupled with the UK housing market/credit looking like it’s in for a dire time for quite a while, plus the bad publicity finally getting through to many, your theory that developers will be able to obtain enough completions to just ‘sit back’ and wait seems a little optimistic to me. I believe there are already developments where there is not one completion.
You are ‘in the business’ and I know you have your ear very much to the ground, but am just surprised that there will be enough people around in times to come who are willing (or able) to slap down a chunk of deposit on an off-plan like before. And of course the speculators won’t be around like before either who I gather were some of the first to rush in on any new development. Unless of course the prices drop substantially to silly levels or is that already happening? -
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Answer is they are around all the time, but you gotta be ready to grab them.
Anything I get in thats good or even may be on the books for ages but the owner suddenly has to get shot, I make a fone call – fastest one to move gets it.
Ideally if you have finances ready and somemoeny in Spain to lodge with your lawyer to show commitment and intention – always subject to finance and documentation, then you are in with a chance!
More will come on the market in the coming years but the best ones location wise, views etc are the ones that shift without hitting the general market!
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@Inez wrote:
……the best ones location wise, views etc are the ones that shift without hitting the general market!
Ohhhh yes.
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Charlie 😉
If we all had that crystal ball .
The situation that there is some movement in the market as pointed out by Inez is something I suppose. 😥
If it is investors they dont normally invest unless they can see a return somewhere. 😕
At the end of the day this is where any possible basis may start as a valuation ,however low or high. 😥 🙂
Think that many would be happier in someway just having properties that are legal and some cards on the table so they can make informed decisions to either take legal action/sell or stick instead of all this guessing of what may or may not happen .Frank 8)
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There are now so many adverts in Sur re properties described as ‘distressed sales’, ‘below Bank valuations’ (although how the valuation stacks up is a mystery), ‘Must Sell Quickly’ etc etc.
Add the 1000’s of properties for rent too (all competing).
Just how bad is the Spanish Property market on the Coasts? It seems as if it’s worse than bad, and now I hear that town councils are upping their council taxes to try and make up for lost revenues with sales, IMO just making a bad situation even worse for owners or people looking to buy.
Spain never seems to learn from it’s mistakes!
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Paul, everyone now seems to agree that sales are bad. Even most of the agents now admit it (although it took them along time). still don’t see many bargains around and I think all the adspeak of distress sales and reductions is the latest sales technique from desperate agents. I would say that prices have been static for around 2 years and you maybe be able to make an offer, forget the silly bargains though…for now. There will always be some urgent sales but who do you think will step in first for a REAL bargain…….the agents and the spanish. Seen it all before.
As someone else posted many people aren’t desperate to sell, they will withdraw from the market, some will renovate instead of moving or just sit it out.
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And be carfeul when they state bank val – its NOT like the UK/Ireland and they are not based on a comparable actual selling price! Banks here value per square metre – I get this argument form owners who are adamant they have a bank valuation so when I say well the reserve has to be 60-70% of that bank val and where is it, all I get told is its from another agent!!! (therefore c******s)
I have been seeing the same, but the private prices still arent good as Katy says.
It is bad here, its been nad for 4 years and set to get a whole lot worse – banks are withdrawing so many good products at the moment its amazing! Soon it will be 70% of purchase price and not 80% of valuation!
That will kill the investors off and leave it a lifestyle issue – and not many of them are buying!
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Whatever market conditions are, you most defo cant beat location and views. I have a friend who has first line villa in El Faro overlooking the 340 and the sea and from his pool and garden you can see right through to the bay at La Cala and because its sat back no real problem with the noise from the 340. Now the House itself aint that special but you just cant buy those views today and if he sold he’d want top dollar, the saddest thing is in the current climate its probably worth more as a building plot
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😉
However, as the BBC news prog. revealed, so much of the Costas have been destroyed and many views gone for good. Spain sort of raped it’s own coastline for greedy property taxes, and left an overdeveloped concrete eyesore.
Interesting posts Katy and Inez, how low will it go, and don’t forget the falling UK market will further choke off sales in Spain to Brits?
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Hard to tell how low it will go. Ive personally been through the 80s and 90s (big ouch there, lost 3 properties) and I see the same pattern here.
Currently owners are in between making a few quid but nothing like as much as they thought, getting a few quid back form offplan deposits, and now selling for the outstanding mortage and costs liability.
As it bites harder, there will be a glut of good properties all along the coast, the ones now going direct to noraties, lawyers banks and their friends and family will be out there for the general public. However, once these are in abundance, and dont think it wont happen, then one will not be able to just sell or subrogate for the mortgage outstanding!
Banks will have no choice but to keep hold of them and I think eventually (around 2-3 years time) there will be so many, they will be going to auctionhouses for almost anything they can get (it was when the big auctionhouses in the UK started up and made their names) – with the remaining outstanding amount being claimed back by the banks in the ex-owners country and against their assets there!!!
We are selling more to the Spanish than to the brits/irish now, an indication of the start of this.
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Inez, what about land prices?
In USA it seems that the land prices are holding (except Florida, where all the real estate is thrashed nowadays) eventhough the apartment/house prices are coming down hard.
I looked over websites like miparcela and the land prices in Spain are incredibly high.
Of course one can never buy land without seeing it. -
Land is coming down – plots ready for projects are less than owners paid for it and unless the owners can hold out then yes they will have to come down – its simple mathematics really – only some owners dont want to think that way!
If you gotta sell, then you gotta sell – and best price gets it. Period!
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