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As anyone who has visited the coastal regions of Spain in the past couple of years knows, it is, as the expats living there say, “Costa Catastrophe”. Along the med, and around all manner of inland speculative golf course-based developments thrown up in the past five years or so, there is a rolling fire-sale of empty houses and flats. There are a quarter of a million unsold and unwanted homes on the market as a result of Spain’s speculative construction bubble. It inflated as Madrid enjoyed rock-bottom interest rates set in Frankfurt by bankers intent on controlling the ever-expanding German industrial machine.
In those boom-boom years, the Spanish banks were tripping over each other in their zeal to extend credit to locals, and to the British, Dutch and Germans as well. Now these local banks, the cajas, are tottering, and their credit rating has been reduced.
The Spanish property market went insane as banks extended ever more sumptuous lines of credit to ever more demented developers. There are spanking new ribbons of frightful apartment developments along any bit of coast, and doughnut housing projects all around the arid plains that surround Madrid.
Although all property prices have dropped, with the possible exception of parts of the islands, notably ibiza, which are holding up fine. Barcelona prices have fallen about 30 per cent since 2008, prime property less so, while at the low end of the market it is absolute carnage with drops of more than 60 per cent.
The reality in Spain is that there are tens of thousands of speculatively built homes that will probably never, ever, be occupied. There is no housing shortage in Spain – just a dismal overhang of flats and homes that no one wants to buy or live in.
The Economist magazine runs a grim quarterly survey, assessing through rental yields and real incomes how over or undervalued properties are in various countries. Staggeringly, it reckons Spanish property is still 27 per cent overvalued, despite price collapses of up to 60 per cent. In Britain we are said to be a relatively modest 22 per cent overvalued. But you you should really worry if you own a lovely little property in Languedoc or Normandy – French property is reckoned to be 47 per cent overvalued.
Normally, when there has been a property crash causing prices to fall by a half or more, bottom feeders would move in to pick up bargains. But an even scarier scenario is now possible. On top of the price falls that have already occurred across the eurozone what happens if there is a complete break up of the eurozone?
This is why there is no floor to the prices for marginal and grotty properties in the balmy outer reaches of the eurozone. Should the single currency collapse, so will any pretence that Mediterranean-facing flats are worth anything much, even if they have to-die-for views over the waves that lap below your open bedroom window.
Costa catastrophe… what next for Spain as the holiday home market plunges intro crisis?
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jakesuper, much of your comment is fairly accurate, the main thing I’d dispute is the figure of unsold homes in Spain as dartboy says.
Even the dubious Spanish Gov’t figures say the unsold new builds is round 687000, and the total properties for sale something like 2 million includes resales and bank stock probably 🙄
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jakesuper, much of your comment is fairly accurate, the main thing I’d dispute is the figure of unsold homes in Spain as dartboy says.
Even the dubious Spanish Gov’t figures say the unsold new builds is round 687000, and the total properties for sale something like 2 million includes resales and bank stock probably 🙄
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Probably even more…come on, everything is ‘Se Vende’….. We would have a board up and sell if we could, but we can’t for our mortgage amount so we don’t embarrass ourselves by having it on the balcony and have people laugh at our price.
Could it be up to even about 5 million unsold properties if people actually started to tell the truth? How many bank owned blocks of flats aren’t listed as ‘for sale’ in a general way as the bank own the whole block and are desperately trying to sell them for way more than it would if they were repos or private sales? They have ‘fantastic’ mortgage offers but you end up paying 4x more than you would if you had cash to buy something exactly the same in the next block?
The main problem I see is who on earth are going to buy in Spain? Yes some Brits who still have the dream of a ‘now cheap’ place in the Sun. Far, far fewer than in the boom though?
The Spanish who wanted a second home have already got one, they have either handed it back to the bank or handed it down to their children? There aren’t that many Spanish youngsters who are going to be working (ha ha) and able to take on mortgages?
Immigrants….Ecudorians (my main bug bear as many of you will know…) and Moroccans etc. They never probably wanted a flat in Spain but when it came with 20k cash on a golden platter they obviously took the lottery winning with a big ‘thank you Spain’. They don’t want to be tied into expensive mortgages, they only wanted the free cash.
The new wave of immigrants? Won’t they just pay really cheap rents and they buy the 12,000 euros places. It’ll take a very long time on immigrant 2.50 euro per hour wages to get a deposit/mortgage won’t it?
The Chinese?? The Russians?? Whatever that country is who won last years Eurovision which I haven’t a clue where it even is????
So, who in the world are going to buy all these places for sale? With no ‘boom’ to make people crazy and think that they must buy now, hurry up or you’ll miss the boat….prices rising by the day etc. Who???
Spain should knock down any blocks which are unoccupied. Turn them back into orange groves/garden spaces to make the quality of life better for everyone else. Take the hit now banks and just say sorry for your greed.
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Probably even more…come on, everything is ‘Se Vende’….. We would have a board up and sell if we could, but we can’t for our mortgage amount so we don’t embarrass ourselves by having it on the balcony and have people laugh at our price.
Could it be up to even about 5 million unsold properties if people actually started to tell the truth? How many bank owned blocks of flats aren’t listed as ‘for sale’ in a general way as the bank own the whole block and are desperately trying to sell them for way more than it would if they were repos or private sales? They have ‘fantastic’ mortgage offers but you end up paying 4x more than you would if you had cash to buy something exactly the same in the next block?
The main problem I see is who on earth are going to buy in Spain? Yes some Brits who still have the dream of a ‘now cheap’ place in the Sun. Far, far fewer than in the boom though?
The Spanish who wanted a second home have already got one, they have either handed it back to the bank or handed it down to their children? There aren’t that many Spanish youngsters who are going to be working (ha ha) and able to take on mortgages?
Immigrants….Ecudorians (my main bug bear as many of you will know…) and Moroccans etc. They never probably wanted a flat in Spain but when it came with 20k cash on a golden platter they obviously took the lottery winning with a big ‘thank you Spain’. They don’t want to be tied into expensive mortgages, they only wanted the free cash.
The new wave of immigrants? Won’t they just pay really cheap rents and they buy the 12,000 euros places. It’ll take a very long time on immigrant 2.50 euro per hour wages to get a deposit/mortgage won’t it?
The Chinese?? The Russians?? Whatever that country is who won last years Eurovision which I haven’t a clue where it even is????
So, who in the world are going to buy all these places for sale? With no ‘boom’ to make people crazy and think that they must buy now, hurry up or you’ll miss the boat….prices rising by the day etc. Who???
Spain should knock down any blocks which are unoccupied. Turn them back into orange groves/garden spaces to make the quality of life better for everyone else. Take the hit now banks and just say sorry for your greed.
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itsme, that is a very frank reply of yours and a lot of respect to you for telling it as it is for you personally. I suspect your 1st paragraph is typical of many others stuck in this situation, so I really wish you luck. Maybe the only comfort is to know you are not alone, there are 1000’s similar, but those don’t advertise it.
I was in Spain recently and noticed many of the Se Vende and Se Aquilar signs had been removed no doubt because of your analysis of the market.
We have several friends who want to move back to Blighty but are stuck too, some in fincas off the coast, we wish we could help them but we can’t, however they make the best of it.
Glad to see there’s some honest views of what’s happening in Spain, hope you win the lottery 😛
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itsme, that is a very frank reply of yours and a lot of respect to you for telling it as it is for you personally. I suspect your 1st paragraph is typical of many others stuck in this situation, so I really wish you luck. Maybe the only comfort is to know you are not alone, there are 1000’s similar, but those don’t advertise it.
I was in Spain recently and noticed many of the Se Vende and Se Aquilar signs had been removed no doubt because of your analysis of the market.
We have several friends who want to move back to Blighty but are stuck too, some in fincas off the coast, we wish we could help them but we can’t, however they make the best of it.
Glad to see there’s some honest views of what’s happening in Spain, hope you win the lottery 😛
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We’ve been lied to by so many people, mainly those in suits who we thought were helping us, that I feel that to keep my sanity I have to be honest. Why lie?
I think, hope, that people are far more sussed now with forums such as this and no one will walk blindly into a sale in Spain without all the correct information to hand? I can sound like a broken record on here but if one person doesn’t walk into a situation like we have then it will be worthwhile.
We won the Euromillions the other day, 9 euros, yippee….getting closer!
I still think that maybe the best option for so many empty properties are as residential properties for older people. Yes it’s cold in winter but with some central heating and carpet it’s still cheaper to live in Spain than in the UK. People should set up decently priced residential homes in these empty blocks of flats/Urbanisations? Have a decent price (and not those crazy 2000 pounds per week as they are sometimes in the UK) and get the councils to ship out the oldies. We’ll all be old one day (hopefully) and having decent care is a responsibility for us all. It would be better for people to enjoy a bit of sunshine/outdoors life in their last years rather than a booming tv room with the rain pounding on the window? Far cheaper as well. A rental of 400 per month is double what it is currently for a 3 bedroom flat in some areas of Spain. Make it 600 euros per month each? Hire two or three nurses to be on hand, what price, 1200 euros per month each? Just an idea which I can’t act upon. The powers that be would jump onto it and ruin the idea by making it too expensive and a genuine idea will be turned into a just making cash idea and loose the care and respect for elders aspect. ??
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We’ve been lied to by so many people, mainly those in suits who we thought were helping us, that I feel that to keep my sanity I have to be honest. Why lie?
I think, hope, that people are far more sussed now with forums such as this and no one will walk blindly into a sale in Spain without all the correct information to hand? I can sound like a broken record on here but if one person doesn’t walk into a situation like we have then it will be worthwhile.
We won the Euromillions the other day, 9 euros, yippee….getting closer!
I still think that maybe the best option for so many empty properties are as residential properties for older people. Yes it’s cold in winter but with some central heating and carpet it’s still cheaper to live in Spain than in the UK. People should set up decently priced residential homes in these empty blocks of flats/Urbanisations? Have a decent price (and not those crazy 2000 pounds per week as they are sometimes in the UK) and get the councils to ship out the oldies. We’ll all be old one day (hopefully) and having decent care is a responsibility for us all. It would be better for people to enjoy a bit of sunshine/outdoors life in their last years rather than a booming tv room with the rain pounding on the window? Far cheaper as well. A rental of 400 per month is double what it is currently for a 3 bedroom flat in some areas of Spain. Make it 600 euros per month each? Hire two or three nurses to be on hand, what price, 1200 euros per month each? Just an idea which I can’t act upon. The powers that be would jump onto it and ruin the idea by making it too expensive and a genuine idea will be turned into a just making cash idea and loose the care and respect for elders aspect. ??
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nursing homes in the uk are not the cash cow many think,overheads kill it as a business.
My wife runs a care agency and over the last 10years we have seen profits decline as more and more things are introduced.
Training, minimum wage,new computer programes to use with their new idea programes that don’t work and need to change again,maturnity pay, pension schemes the list goes on but when you signed a 5 year contract and 2 years in these things change your left trying to cut costs to keep it viable as you get no increase from the council, thats why these big homes are now going bust i.e southern cross -
nursing homes in the uk are not the cash cow many think,overheads kill it as a business.
My wife runs a care agency and over the last 10years we have seen profits decline as more and more things are introduced.
Training, minimum wage,new computer programes to use with their new idea programes that don’t work and need to change again,maturnity pay, pension schemes the list goes on but when you signed a 5 year contract and 2 years in these things change your left trying to cut costs to keep it viable as you get no increase from the council, thats why these big homes are now going bust i.e southern cross -
Southern Cross was a very viable business & profitable & then it was bought by a US private equity co who sold all the properties to a separate company which then charged very high rents which the busness couldn’t cover.
Re your business, yes I agree, it’s a real sod isn’t it having trained staff working for the grand sum of £6.80 an hour! I mean, how unreasonable are these people, they should be grateful they have a job!
I pay £15 for 30 minutes care for my Mother, the carer receives minimum wage, the agency gets £30 an hour!
My carer was on holiday at the beginning of July, camping in Cornwall, the agency owner, on holiday in Las Vegas called her back 4 days early because someone else went sick, needless to say the owner stayed in the States!
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Southern Cross was a very viable business & profitable & then it was bought by a US private equity co who sold all the properties to a separate company which then charged very high rents which the busness couldn’t cover.
Re your business, yes I agree, it’s a real sod isn’t it having trained staff working for the grand sum of £6.80 an hour! I mean, how unreasonable are these people, they should be grateful they have a job!
I pay £15 for 30 minutes care for my Mother, the carer receives minimum wage, the agency gets £30 an hour!
My carer was on holiday at the beginning of July, camping in Cornwall, the agency owner, on holiday in Las Vegas called her back 4 days early because someone else went sick, needless to say the owner stayed in the States!
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In Mijas there was an whole development that was being used for retirement purposes by the Japanese Government. They were gave an option to retire in Japan or in Spain. I am not aware if it is sti;ll around.
The Brits should do this it will be a much cheaper option than mantaining them in UK. THe benefit in the sun are all there. I do not see if any one in the DHSS is capable of thinking outsite the box. Plus politically it will not be easy to sell.
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In Mijas there was an whole development that was being used for retirement purposes by the Japanese Government. They were gave an option to retire in Japan or in Spain. I am not aware if it is sti;ll around.
The Brits should do this it will be a much cheaper option than mantaining them in UK. THe benefit in the sun are all there. I do not see if any one in the DHSS is capable of thinking outsite the box. Plus politically it will not be easy to sell.
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@rob6578 wrote:
Southern Cross was a very viable business & profitable & then it was bought by a US private equity co who sold all the properties to a separate company which then charged very high rents which the busness couldn’t cover.
Re your business, yes I agree, it’s a real sod isn’t it having trained staff working for the grand sum of £6.80 an hour! I mean, how unreasonable are these people, they should be grateful they have a job!
I pay £15 for 30 minutes care for my Mother, the carer receives minimum wage, the agency gets £30 an hour!
My carer was on holiday at the beginning of July, camping in Cornwall, the agency owner, on holiday in Las Vegas called her back 4 days early because someone else went sick, needless to say the owner stayed in the States!
We don’t get £30 an hour infact not even half that.You seem to forget about overheads like office rent council tax gas electric computers, phones office staff and we pay to train the staff we give them uniforms maybe we are in the wrong area or your just paying too much.
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@rob6578 wrote:
Southern Cross was a very viable business & profitable & then it was bought by a US private equity co who sold all the properties to a separate company which then charged very high rents which the busness couldn’t cover.
Re your business, yes I agree, it’s a real sod isn’t it having trained staff working for the grand sum of £6.80 an hour! I mean, how unreasonable are these people, they should be grateful they have a job!
I pay £15 for 30 minutes care for my Mother, the carer receives minimum wage, the agency gets £30 an hour!
My carer was on holiday at the beginning of July, camping in Cornwall, the agency owner, on holiday in Las Vegas called her back 4 days early because someone else went sick, needless to say the owner stayed in the States!
We don’t get £30 an hour infact not even half that.You seem to forget about overheads like office rent council tax gas electric computers, phones office staff and we pay to train the staff we give them uniforms maybe we are in the wrong area or your just paying too much.
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I pay the rate my local council tells me I have to pay!
Given what the carer does I don’t think £15 for 30 minutes is too much, I wouldn’t want to do her job for twice that. My point is of that £15 she gets £3.40. I just think the difference, which goes to the agency, is alot of money & office overheads don’t cost that. Some-one is making a great deal of money out of people like me & it isn’t the person who does the actual work!
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I pay the rate my local council tells me I have to pay!
Given what the carer does I don’t think £15 for 30 minutes is too much, I wouldn’t want to do her job for twice that. My point is of that £15 she gets £3.40. I just think the difference, which goes to the agency, is alot of money & office overheads don’t cost that. Some-one is making a great deal of money out of people like me & it isn’t the person who does the actual work!
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I think thats alot of money to pay honestly we charge alot less we are working for kent,greenwhich and bexley councils and none of them pay us more than £15 an hour i would look into maybe getting a few other agencies to quote you on charges or maybe as you live in such an expensive borough they do charge more
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I think thats alot of money to pay honestly we charge alot less we are working for kent,greenwhich and bexley councils and none of them pay us more than £15 an hour i would look into maybe getting a few other agencies to quote you on charges or maybe as you live in such an expensive borough they do charge more
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I do not see why we need to go through the Council and pay them the amount per hour never mind the overheads etc.
A so called carer came to shower a friends mother. She came nearly two hours late no apology or reason for the delay, not wearing a uniform. She asked my friend how to give a shower, used a soap to wash hair instead of the shampoo that was sitting there, did not hair dry while the hair dryer was all ready plugged in, later she complained that my friends mother was very slow. I think she expected a person of 80+ to be quicker than Usain Bolt. She was rough in handling & also fiddling the time sheet all this was for £27 per hour.
Why, cant we directly get a Polish, Romanian person for the mimimum wage and this was the Council does not have to pay for over heads & the shark American operators. ( This is what my friends are doing in Italy & Spain ) If the person is not doing the job she/he could be sacked & there would be some kind of personal chemistry between the parties involved. Of course this means all the kick backs at all levels will stop.
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I do not see why we need to go through the Council and pay them the amount per hour never mind the overheads etc.
A so called carer came to shower a friends mother. She came nearly two hours late no apology or reason for the delay, not wearing a uniform. She asked my friend how to give a shower, used a soap to wash hair instead of the shampoo that was sitting there, did not hair dry while the hair dryer was all ready plugged in, later she complained that my friends mother was very slow. I think she expected a person of 80+ to be quicker than Usain Bolt. She was rough in handling & also fiddling the time sheet all this was for £27 per hour.
Why, cant we directly get a Polish, Romanian person for the mimimum wage and this was the Council does not have to pay for over heads & the shark American operators. ( This is what my friends are doing in Italy & Spain ) If the person is not doing the job she/he could be sacked & there would be some kind of personal chemistry between the parties involved. Of course this means all the kick backs at all levels will stop.
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you can go private and go straight to the agency, if you were in our area i’d say come to us and get the care half price.
The price you all seem to be paying is way more than it is in our area and we have a monitoring system were by they log in and out by phone so no time sheet fiddling and easy invoicing at the touch of a button. -
you can go private and go straight to the agency, if you were in our area i’d say come to us and get the care half price.
The price you all seem to be paying is way more than it is in our area and we have a monitoring system were by they log in and out by phone so no time sheet fiddling and easy invoicing at the touch of a button.
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