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As Mark has so correctly pointed out many times there is no single Spanish property market. There are in fact many and varied mini ones. What I’d like concentrate on is the market that I believe many of those on here are most interested in, namely the costas. Even then I fully appreciate that there are many different sub markets. As an example, that the falls we have seen and will see in an area such as Puerto Banus are much smaller than those in Almeria.
The property market on the costas has now been falling for some four years. Most observers, myself included, feel it still has more to fall. This seems to be backed up by the available stats, flawed though they are.
For what it is worth, my best estimate is that we still have another 18-24 months of falls to see. That only when prices are 50% off their peak, as has happened in Ireland and coastal areas of Florida, will we see prices stabilising.
My question to you all is. How long do you think it will be until the bottom of this market is reached?
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i think you are about right but that is only on the desirable properties near the beaches and villas within a 10 minute drive the other stuff ie golf complex and the out of town urbs will take a little longer and fall a touch further.Signs of recovery are starting to show with little increases of output so keep your fingers crossed and keep on praying 😀
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@brianc_li wrote:
My question to you all is. How long do you think it will be until the bottom of this market is reached?
I think Ireland is further along in the property bust than Spain because it has sat up and been honest (for once) whereas I think Spain has not been as transparent and banks are still withholding properties on their books – once these are unleashed property prices could certainly come tumbling down plus there are far more empty houses in Spain than there are in Ireland – it is estimated there 300,000 empties in Ireland – in spain is it 3 million – correct me if I am wrong! Property prices started to fall in Ireland from end of 2006 – I think in Spain this did not kick in until 2008. But to answer when the costas will bottom – like dartboy said above it is location and hopefully the bottom isn’t too far off.
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Price falls will be managed, so it will be a very protracted slump and inflation will chip away for years even when nominal falls stop. The UK market has to recover first (and significantly) before the costas will start seeing real rises.
I’d say another eight years before prices rise above inflation, although that maybe optimistic given the over supply.
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While all the experts are filling the blogs and twittering away like demented parrots, history is quietly running its course. We don’t have to go too far back to find out what’s going to happen next; most of us will have been around in the early nineties (perhaps late 89’) when Spanish and English properties crashed, by roughly the same figures we are witnessing since 2007.
The recovery set in some five to six years later, and that’s what will happen this time, prices will recover starting from next year.
History is more reliable than a crystal ball.
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The conditions surrounding the last property crash bear no resemblance to the catastrophe currently gripping the world’s financial markets/people’s pockets. This is not history repeating itself, it’s a totally different scenario.
Then let’s add the extra ingredients of corruption fall-out, a screwed-up legal system plus the glutton of unsold stock. Even when the rest of the world does start turning the corner, it’s my belief Spain will be struggling to keep up.
“Prices will recover starting from next year” (?) 😯
My money is on the demented parrots and a cystal ball. -
They’ve been saying that history will not repeat it self since time began, and it always has. And they’ve always said that it wouldn’t repeat itself because things were different, like this time – corruption, bent lawyers, too many houses being built.
Jesus Gil was around 20 years ago, and his successors are still around, bent lawyers were just as plentiful then as now, and didn’t unsold houses litter the landscape then too?
History has a natural cycle and memory fades after a time. After six years of crashed house prices in the early nineties, it didn’t take long for the optimistic investors to return, and they did well until the next crash four years ago. Several on this forum still brag about the money they made, then.
They’ll be back next year, along with a new bunch with short memories. The lure of the sun is simply too strong.
(Considering the demand, a million unsold houses for a country desperate to encourage immigration, is a small hurdle).
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@Rocker wrote:
They’ve been saying that history will not repeat it self since time began, and it always has. And they’ve always said that it wouldn’t repeat itself because things were different, like this time – corruption, bent lawyers, too many houses being built.
Jesus Gil was around 20 years ago, and his successors are still around, bent lawyers were just as plentiful then as now, and didn’t unsold houses litter the landscape then too?
History has a natural cycle and memory fades after a time. After six years of crashed house prices in the early nineties, it didn’t take long for the optimistic investors to return, and they did well until the next crash four years ago. Several on this forum still brag about the money they made, then.
They’ll be back next year, along with a new bunch with short memories. The lure of the sun is simply too strong.
(Considering the demand, a million unsold houses for a country desperate to encourage immigration, is a small hurdle).
But was the fall back then as much as it is now – certainly I remember here in Ireland back in the early ’90s and the interest rates were sky high but I don’t remember the fall being as much as it is now nearly 50% and I don’t remember the protracted amount of time prices fell for either – I think this time it is very different -it’s global.
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Timly post over on Edward Hugh’s Facebook blog:
People in Spain who are wondering what the future holds for Spanish house prices could do worse than look at the US, where home prices are still falling, even after having fallen farther, faster and longer than their Spanish equivalents.
http://news.yahoo.com/s/ap/20110222/ap_on_bi_ge/us_home_prices
Quite a lot of comments over on his blog for those who are interested.
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A million unsold houses a small hurdle?
OK…. 🙄@Rocker wrote:
And they’ve always said that it wouldn’t repeat itself because things were different, like this time – corruption, bent lawyers, too many houses being built
If you read and understood my post correctly, I only called the corruption, bent lawyers and the housing glut as “extra ingredients” to the bigger economic picture.
Different ingredients mean you end up with a different cake – this is not history repeating itself in my view.Incidentally the UK has none of these three elements to the same extent as Spain (in fact UK is facing a housing shortage) yet it is predicted the market there will still fall over the next couple of years, some financial institutions (demented parrots or not) saying by up to 20%.
So how you see that in Spain “prices will recover starting from next year” is beyond me. We shall both see who’s right next year. 😉 -
I did read the article highlighted in Brian’s link, but I lacked the courage to read through the 1,369 comments. The article itself could well have been written about the state of the Spanish housing market, and possibly other countries’.
In answer to Angela’s post about the scale of the crash in the early nineties; I was in Spain at the time and witnessed falls of over 50% between ’90 and ‘92. I don’t have any statistics, but remember villas around the Estepona area falling in price from 50K to less than 25K.
When the recovery set in around ’93 the properties quickly recovered their original value of 50K and ten years later were selling at three times that, a 300 percent rise, at least.
That’s what I think will happen this time round, starting as early as next year. The early nineties were just as desperate as the late noughties, to the best of my recollection.
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@charlie wrote:
A million unsold houses a small hurdle?
OK…. 🙄@Rocker wrote:
And they’ve always said that it wouldn’t repeat itself because things were different, like this time – corruption, bent lawyers, too many houses being built
If you read and understood my post correctly, I only called the corruption, bent lawyers and the housing glut as “extra ingredients” to the bigger economic picture.
Different ingredients mean you end up with a different cake – this is not history repeating itself in my view.Incidentally the UK has none of these three elements to the same extent as Spain (in fact UK is facing a housing shortage) yet it is predicted the market there will still fall over the next couple of years, some financial institutions (demented parrots or not) saying by up to 20%.
So how you see that in Spain “prices will recover starting from next year” is beyond me. We shall both see who’s right next year. :wink:[/quoteSpain has one ingredient sadly missing from the UK (otherwise I might be writing this from Kent rather than the Costa Blanca), an abundance of sunshine which induces optimism in even the most calculating of British hearts, and the sense of adventure which springs from setting off on a journey into the unknown.
Most of the incomers to Spain are blinded by those two factors, caution goes out of the window and who cares if the white-washed villa in the glistening sun doesn’t have all the paperwork in order. They’re not going to knock down such a beautiful building, are they? And the estate agent and lawyer says it’s all right. And it’s cheap as chips.
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@Rocker wrote:
History has a natural cycle and memory fades after a time. After six years of crashed house prices in the early nineties, it didn’t take long for the optimistic investors to return, and they did well until the next crash four years ago. Several on this forum still brag about the money they made, then.
They’ll be back next year, along with a new bunch with short memories. The lure of the sun is simply too strong.
(Considering the demand, a million unsold houses for a country desperate to encourage immigration, is a small hurdle).
You are quite right, the cycle has been famously stated to be 18 years , peak to peak. It matches a mortgage repayment term, give or take – and two decades is enough to erase memories in some people. If we have the same situation as the UK 1989 crash and it is six years before prices start to recover, then the 2008 peak (Tinsa http://www.tinsa.es/down/IMIE/2011/IMIE_01_2011.pdf ) will indicate a 2014 start of recovery.
Your maths is therefore a bit suspect, that’s not next year is it? 2014 is three years away.
However, the situation in the costas is a bit different which may indicate an even longer rebound period. Its dependant on UK buyers selling up from the UK to retirement.
In the UK you had a rapid fall in prices, in Spain prices have not fallen in UK terms due to the currency collapse.
In the UK you have steady stream of first time buyers joining the job market, in Spain you have a steady stream of forced sellers due to death, there isn’t a job market for locals to support prices.
In the UK you have a safe and benign legal system that protects and encourages investment, in Spain you don’t.
In the UK you have well paying jobs and a sound economy to provide long term stability, in Spain you don’t – you do nothing and spend money.
The UK isseveral years away from a start of recovery in its prices, until UK residents build up equity again they won’t be able to buy in Spain in their retirement. The younger generation in the UK are looking at a 10 year saving period to build a deposit for a UK property, never mind having £150K spare equity to splash out on a second home in Spain. -
@Rocker wrote:
Spain has one ingredient sadly missing from the UK (otherwise I might be writing this from Kent rather than the Costa Blanca), an abundance of sunshine which induces optimism in even the most calculating of British hearts, and the sense of adventure which springs from setting off on a journey into the unknown.
Most of the incomers to Spain are blinded by those two factors, caution goes out of the window and who cares if the white-washed villa in the glistening sun doesn’t have all the paperwork in order. They’re not going to knock down such a beautiful building, are they? And the estate agent and lawyer says it’s all right. And it’s cheap as chips.
a) The sun shines on all the planet.
b) You try buy a house costing 150k euro’s on an average UK income of £27k (leaving savings of £1k per year). -
Dates for the last property crash on the costas are a bit out. The bottom of the market was cerca 1995 and this was when the banks started to offload their properties. I should know we bought some. You are correct in saying that prices shot up though, by 2000 prices had tripled from rock bottom.
History won’t repeat itself this time, different ball game. There is a massive glut of property, not so last time. There wasn’t the level of corruption which ended with 30,000 illegal homes like now. Also there wasn’t the internet and forums like this one. In 1995 the coast was still attractive and not full of council build type blocks of apartments.
Prices have scarcely fallen, often see adverts on here at 50% off….yeah, off some crazy price cobbled up by a developer over a dinner with his bank investor! Meaningless.
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@Rocker wrote:
Spain has one ingredient sadly missing from the UK…… an abundance of sunshine which induces optimism in even the most calculating of British hearts
But you should never let it cloud your judgement, eh Rocker? 🙂
Katy, “History won’t repeat itself this time, different ball game” – exactly. Added to which it’s just a fact there simply just aint the punters around. Most in the UK are too preoccupied with hanging on to their jobs and coping with rising costs. Second homes in Spain is the last thing on their mind and financially out of reach compared to years ago. Long gone are the days to simply raise finance on their main home without a care in the world with mortgage companies extending a helping hand, Spanish property exhibitions and dying attendances are proof of this.
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What caused the property crash in the US, Ireland and Spain was massive irresponsible lending of cheap money to individuals who could not afford it. Lack of effective regulation by governments and central banks and a bandwagon of inexperienced speculators who believed property was a one way bet.
The wreckage is left, an estimated 600,000 unsold and unoccupied homes in Ireland, over a million in Spain. Add to that rising unemployment in all these countries, need for government austerity, stagflation in UK and consequent low or medium growth in western economies and you see a picture immerging of future financial gloom.
Banks fuel the property market. Without banks relatively few properties can be sold.
Banks in Ireland and Spain have deep capital reserve problems despite bail outs and massive loans from the ECB.
Basle 111 rules of capital reserve ratios need to be met very soon by all the world’s banks. These banks also have a huge supply of repossessed property especially on the Spanish coasts which will take many years to clear.
The only logical conclusion you can draw from all this is that very little lending will be available to the property market for some years to come.
Then add to that the fact that so many expats want to leave Spain but cannot sell their properties. The picture is that of a market being hugely over supplied.
Over supply means only one thing, a constant downward pressure on prices.
So the conclusion must be that the bottom has not yet been reached and any upturn is years away. -
Your well-written and perceptive comment, Logan, with a few minor alterations concerning inflation instead of stagflation, and ignoring the US, could well have been written on 23rd February, 1994, in fact it made me check the date when I first read it.
Looking at the wider canvas, my contention is that not much has changed – we were coming out of recession then, and we’re coming out of recession now – we had boom and bust then and we have boom and bust now (I never did believe what Brown was saying for 13 years).
And you know your stuff, the average punter coming over to buy a house in the sun doesn’t, and what’s even worse, he doesn’t give a stuff.
I overheard two Scottish couples yesterday who had driven all the way down from Scotland and were going to buy houses in Spain. I knew the development they were looking at, over-priced and uncompleted rubbish, miles from the sea and everything else.
Did they care?
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I agree most people don’t follow market economics and it has very little influence on their ambitions.
However the property market is directly affected by economic trends and you cannot buck it.
Your example of the couple from Scotland is probably fairly typical of people about to either lose their money or become trapped once they buy. If they don’t have the cash price they will struggle to get finance and whatever they do buy will decline in value because the market is continuing to fall.
Yes EU countries are coming out of recession technically but with very small growth levels hardly enough to cover inflation. That fact will not improve the property market which is effected by the other forces I have described.
In economics, stagflation is the situation when both the inflation rate and the unemployment rate are persistently high.
At the moment inflation is a global problem due to higher commodity prices. Unless central banks act soon and increase interest rates it will choke off any economic recovery. Unemployment is rising because government austerity measures are starting to bite and small business cannot get sufficient credit from banks to expand.
I agree recessions have been common and boom and bust is an integral factor in capitalist economies. This time around however it’s much more severe. The more severe recessions are the longer it takes to recover.
Property markets are historically the last part of the economy to enjoy recovery. So for this one I predict long recovery periods with property at the end of the queue. -
And there was me thinking this forum was drying up, with few threads, posts and not much more to say.
I think it is interesting that Brianc_li recognises the difference between Puerto Banus and Almeria in terms of price falls, and that there is an acceptance now that the market has been falling for over 4 years.
I think Katy is right about her timings, but heaven help me, I think you make some very good points here Rocker.
I read last year or so a fascinating three / four page article about the state of the market, outlining the exact situation we find ourselves in, but it wasn’t until the third page that I realised the article was written in 1990/91 someone had given me a photocopy of it from an old Marbella Times, it was spooky how accurate it was as a depiction of today, and I too was here in 1989 and see a great deal of similiarity.
This is about the best thread I have seen on this forum for a long while, lots of counter arguments and great points from everyone, the market won’t fall more than 30% in many areas of Marbella and Puerto Banus, it may fall further in areas where these 1 million unsold homes apparently are, its a funny old time for sure, but at least it seems everyone agrees we are through “the perfect storm” and now dealing with the aftermath.
And yes the Irish have been incredibly forthright and transparent, and I would worry about that market perhaps a lot more than Spain, and we may be behind – but remember, we are seeing a real interest and growth from other markets here, that believe that the prices to be had are pre boom, and it was the Germans who were buying in the mid 90’s and guess what, they are buying again today…
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Hi Chris – you’re going to hate me for this. 😉
Exactly two years ago on this forum (22nd Feb 2009 to be precise) you wrote:
“Prices are universally down across the board, interest rates are at an all time low, and when the flights start to pour in and costs along the Costa in every other sphere inevitably fall also, I think it may be seen that in some ways the recovery is already well under way.
This doesn’t mean there isn’t some pain still to go through, just that we are finally through the worst”.In reply, I wrote: “…..surely the solution is to stick your money somewhere safe bringing in some interest and simply rent while riding out the fall in prices. There are certainly tons of rentals out there for the choosing. To buy now rather than wait to me is madness, prices are only going one way in the foreseeable future”.
We then had a long ‘conversation’:
(you in black, me in blue)Where does one stick one’s money that is safe today?
In a bank like mine that was strictly regulated not to expose itself to silly risky lending.Where does one bring in some interest, that is actually not a loss when taken against underlying inflation?
5% is better than a poke in the eye with a long pointy stick. I don’t have the knowledge to comment on ‘underlying inflation’ but this situation seems better than having my money tied up in a property that is going down in value by the month.Why would one give one’s money to someone to rent rather than own?
When the interest more than covers the rent and bills, at least my capital is standing still rather than sinking downwards. Am renting a lovely villa, sea/mountain views without a care in the world (no maintenance costs, taxes etc.)Who says that prices are only going one way at present?
Most of the world?So do you wait for an exciting well reported uplift in the market?
That’s the idea.
When there is a general consensus rush to get back into the market?
😯 Must have blinked and missed it.I dug out a couple of Warren Buffett quotes, I may use here and elsewhere you may shoot them down or reverse them back, but do they have relevance?
This one for instance:
Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.
Stocks are a different cup of tea. Like BAE Systems, they can shoot up 10% overnight as a result of some good news. It’s all about sentiment at the time which is why property is just on a downhill slide at the moment.So do you now follow the herd and invest somewhere safe and earn your interest, and pay someone else a rent for the privilege of use? Is that truly the thing to do?
It is in my case over the last couple of years. Haven’t lost a penny in capital/equity. Would having had it tied up in property have done that for me?Can you really do well at that? Hasn’t the past year shown us that nowhere can be truly considered safe? And what level of interest are you going to get and how much of that are you going to use to rent?
I refer the honourable gentleman to my previous answer.Again, Elizabeth was looking for something positive here, and I hope to keep on trying to provide it.
Your perogative Chris. I prefer sticking to what I feel is the reality in a situation, hence when weighing everything up – my opinion is it’s best to rent, not buy at the moment.I became aware of a property beachside in Marbella that was sold two weeks ago for €183,000 it was sold by a vendor who had 24 hours left to effect a sale or face repossession and further costs, hassle, legal issues etc with the bank. A Spanish family bought it, and the bank was happy to effect a transfer of the mortgage.
This was in a development where prices previously had reached over €360,000 for similar units when it was an off plan project some 5 years or so ago.
There are obviously going to be times where something is an unquestionable bargain – especially in a last-minute repossession situation. However I wouldn’t say the average buyer in general is lucky enough to have this type of opportunity laid at their feet…..give it another couple of years maybe when there’ll be more of these situations around.Where better that money? In a bank, earning what safe interest exactly, in then paying rent, or being used to provide a sea view on 300 sunshine days a year to be used and enjoyed?
Depends on an individual’s priority. Mine at the moment is preserving my equity.And at an historically low mortgage rate. Where is the smart money here?
In two years time I expect to have at the very least the same amount of money as I have now. I firmly believe this will not happen if I buy a property now. Time will tell if I’m being smart, but currently I am simply content that my money is in a bank, not in property and not going down.Or pass up the opportunity to wait several years, have no use, no pleasure and pay a goodly sum more, perhaps more than double once again? And at what interest then I wonder? And at what loss of potential capital growth over the next few years?
It is not all doom and gloom folks, it actually is the bottom of the market, you just have to know the value of things as well as the price.
Sorry Chris but we’ll just have to agree to disagree on this one. The bottom of the market? No way, Jose, you really can’t be serious?…………………………………………..
I stand by every word I said two years ago and believe everything I said then still holds today.
Would you agree that your bottom-of-the-market/finally-through-the-worst comments were wrong then? Would you say them now?Great to see you’re still sticking with us by the way! 😀
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@charlie wrote:
Hi Chris – you’re going to hate me for this. 😉
Exactly two years ago on this forum (22nd Feb 2009 to be precise) you wrote:
“Prices are universally down across the board, interest rates are at an all time low, and when the flights start to pour in and costs along the Costa in every other sphere inevitably fall also, I think it may be seen that in some ways the recovery is already well under way.
This doesn’t mean there isn’t some pain still to go through, just that we are finally through the worst”.
…………………………………………..I stand by every word I said two years ago and believe everything I said then still holds today.
Would you agree that your bottom-of-the-market/finally-through-the-worst comments were wrong then? Would you say them now?Great to see you’re still sticking with us by the way! 😀
Well it might sound stupid but I also kind of do stick by everything I said two years ago, Jeeze don’t forget Charlie that was only a few months after the crash to end all crashes, I had only just started to believe myself that my funds in a current account of Lloyds were truly safe.
Then, the next month, our guys went and opened up a new 500 sq mtr office that today has more than 50 people working in it from less than a handful then.
Also remember, then NOTHING was selling unless it was properly down in price and almost nothing was, so there was almost no activity. but what can I do. I am a moment in time kind of guy. I don’t think I was saying then that the market was going to jump up and all be rosy within a month or two, we been recovering for two years now, and it may go onward for more, but I saw people buying even back then, and more so now, I am here to occasionally report how I see it.
And I hope to stick with it yep!
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OK, so in answer to the original thread question it’s been established that Chris is standing by his “bottom-of-the-market/finally-through-the-worst” as of two years ago….and the only way is up, and Rocker feels prices will turn around as of next year.
Am definitely going to re-visit this thread in a year’s time. Wonder if it will be me who’ll have egg on their face. 😆
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Chris, I’ve always had a lot of time for you and your point of view. Indeed I’ve taken some of it aboard as is evidenced by my reference to the difference in the markets between prime and sub-prime areas in the first post on this thread.
Having said that, you standing by the comment you made “it actually is the bottom of the market” two years ago is frankly ridiculous. Your personal experience may be different but it it plainly obvious to anyone that “the market” had not bottomed two years ago. That it has fallen substantially since. You were wrong then, plain and simple and you should be man enough to take it on the chin.
I still value your input though. 😀
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A duel between equals (Chris and Charlie), what a beautiful way to stimulate a discussion. I would not wish to take sides, apart from an obvious leaning towards the supposedly weaker sex, which may not apply in this case, not debating-wise.
Having carefully read both opinions, I agree with both of them, I don’t find that they are diametrically opposed. And changing your mind has never been a crime, although it may be hard to admit to.
And I can imagine in a year’s time, we’ll all have egg on our faces.
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@Rocker wrote:
A duel between equals (Chris and Charlie), what a beautiful way to stimulate a discussion. I would not wish to take sides, apart from an obvious leaning towards the supposedly weaker sex, which may not apply in this case, not debating-wise.
Having carefully read both opinions, I agree with both of them, I don’t find that they are diametrically opposed. And changing your mind has never been a crime, although it may be hard to admit to.
And I can imagine in a year’s time, we’ll all have egg on our faces.
I just think what Logan posted earlier is spot on.
Only other thing I would add to all of that is the EU political problems and lack of rule of law in some countries.
My view (at the moment) still is — retire to Spain etc as normal — but dont buy anything and spend less than 183 days at a time in Spain/Portugal/etc …. to avoid being tax resident as this will become more important as things get worse and they look for revenue.
Moving twice between close countries in rented properties on a QPROPS pension is the way to go absolutely without question.
— Munky
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Brian, Almeria like Malaga is a big place and like Malaga has its areas that are no go zones (Manilva, Roquetas etc), but it also has areas that have stood up well to the recession; eg the up market area of Cabo de gata which experienced strong sales last year.
Everybody seems to have ignored that sales of residential property in Spain were up 4,5% in 2010 on 2009. Sales of good properties in MARBELLA are strong and the notaries are doing a brisk business. As Mark says, there are areas and there are areas!!!.. of course sales concluded are where the prices has been reduced by 40%….
the real estate market in Spain is two speed (like Europe) – just make sure you choose a good area and don’t fall into the trap of getting more space for your money in “dingyville”……. 😀 😆 😈
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Ubeda, I hear what you are saying and to a certain extent I agree with you. However ‘good’ the area though, it is quite simply not immune to what is going on in the general market.
When I started looking at a purchase some two and a half years ago the area I concentrated my search on was one such good place, Nerja. I was told categorically by some of those supposedly in the know that, given the desirabilty of the location, prices would not fall. Lo and behold they have, not by as much as other nearby places such as Torrox I’ll grant but a good 25%-30% has now been shaved off prices there.
If, as most people believe and I certainly do, this market has further to fall it will impact all areas be they good or bad.
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Brian _li; Nerja is a great example – it’s a great area; especially if you buy in the good parts where the “bubble” has reduced prices by let’s say 35-40% off 2004 levels…………… but in these good parts properties are selling because there are buyers for good areas at great prices!!!! … if you go up the hill into no mans land, well, they will never sell at any price in the future especially as quality is rubbish and the communities are not maintained!!!!!!!!!!! if you like Nerja start looking now and get yourself a prime property in a prime town………. there is huge investment going on there and a bright future awaits the town centre!!!!!!
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Here, Ubeda, is where we part ways. I don’t think now is a good time to buy. Even in the better parts of Nerja. I remain convinced that property prices still have some way to fall. That the falls in good areas may not be as steep as those in the styx but that they will happen. In the meantime I’ll rent when I’m visiting and my money is earning its keep elsewhere. I still have about ten years until I retire. 😀
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If things are getting better on the Costas re. property investment, why is British tourism still dropping. I have asked this before but surely if people don’t want to holiday there then they aren’t interested in buying?
UK visitors were down by another 3% in January in andalucía. Before anyone steps in with the recession try booking flights to faraway places in winter.
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Katy, when will you guys wake up to the fact that the “Costas” are not that dependant on the Brits anymore?????????????most of the buyers at the mo are Norwegian !!!!!!!!!!! Scandinavians, Germans, French are also here in force. not to mention our new best friends the eastern Europeans and the Moroccans who are really on a spending spree!!!!!!!!!!!there are more “bling” cars driving around town with “foreign” plates than we have palm trees!!!!!!!!!!
it’s no surprise that British visitors figures are down 3%; they are really feeling the pinch – rich, poor and the middle classes !!!!!!ha ha!!
U Beda
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I know a lot of people in marbella including Norwegians and Germans and that is not the picture I am getting! The spanish are apparently concerned about the fall in the British market if their media is to be believed. If all the Euro bling bling trash are taking over that would be more reason for the British to sell. Everyone hated them including the spanish.
Not many palm trees left on the coast….they were all killed by the red beetle 🙁
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@katy wrote:
I know a lot of people in marbella including Norwegians and Germans and that is not the picture I am getting! The spanish are apparently concerned about the fall in the British market if their media is to be believed. If all the Euro bling bling trash are taking over that would be more reason for the British to sell. Everyone hated them including the spanish.
Not many palm trees left on the coast….they were all killed by the red beetle 🙁
@katy wrote:
I know a lot of people in marbella including Norwegians and Germans and that is not the picture I am getting! The spanish are apparently concerned about the fall in the British market if their media is to be believed. If all the Euro bling bling trash are taking over that would be more reason for the British to sell. Everyone hated them including the spanish.
Not many palm trees left on the coast….they were all killed by the red beetle 🙁
I need to tread carefully, but would like to reply to the point that the Spanish object to ‘Euro bling trash’. When I was down Marbella way, what the Spanish objected to most of all, were the flash Brits, especially the British crooks flooding the place, and they weren’t all bank robbers or drug dealers.
They watched the British investors buying properties by the dozen and selling them on at vast profits, and they really hated those, far more than the usually more discreet Europeans.
And, as Ubeda said, the Brits aren’t back in great numbers, yet, but the rest of Europe? They’re flooding the place, especially the Germans and Scandinavians, they’ve got more money than us Brits.
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Hmmm all the Germans I know are selling. What do I know about what the spanish think, I just have spanish relatives and friends…..counts for nothing against the superior knowledge of a British estate agent living on the costa blanca 🙄 😆
Are the Easterm Europeans moving to Spain with their “flash” cars and dubious money not crooks or do only the Brits aspire to that status?
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I’m not an estate agent and I’ve lived longer on the CDS than the Costa Blanca. But getting personal is counter productive.
Your main point concerned an assertion that Spanish people prefer Brits to other Europeans. That simply isn’t true. History can teach us all, especially history from not that long ago.
There is an historical alignment between Spain, Germany and Italy, and historical disagreement between the Spanish and the British empires even longer ago.
It’s not a big deal all these years later, but to suggest that Spanish people prefer Brits to other Europeans is daft and needed commenting on.
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Hate is too strong a word, and on a global comparison basis Spanish people are more guest friendly than most.
Back on topic, a Spanish friend whose estate agency business went bust during the recession has been troubling me to consider starting up again on an equal partnership basis. I’m tempted, despite my lack of knowledge, because I can sense the optimism returning.
The British estate agents in the area fled when the bad times hit, and their former premises are empty and available for a song. We wouldn‘t be short of properties for sale, there are thousands of them.
Tens of thousands, if we took on bank repossessions.
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I spent the last week looking around the South Costa Blanca and Murcia, 2 areas particularly hard-hit. I’ve come back more optimistic. I don’t expect a rebound, but I think we are near the bottom. I saw house-hunters from all over Europe out and about, including Brits (though the Brits don’t dominate like before, which isn’t a bad thing). Prices down 30-50% or more.
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Eurozone citizens can afford to buy because there’s no exchange rate problems, but Brits will not return in numbers until the rate against Sterling improves, and the UK economy picks up for all and remortgaging starts again.
You hardly ever get an expert on here who properly debates the other main problem when buying Spanish property and that is the ‘extortionate’ buying costs,and. when wishing to sell, the also high selling costs. 10-11% is crazy and there’s also the agent’s selling commission which the buyer ends up paying in reality. The costs and system have to change first to make Spanish property competitive.
For Brits, both the above make buying in Spain a poor investment now because rates will change again sometime and then the double whammy occurs on exchange rates if wishing to change back to Sterling.
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Buying is definetely picking up now, but not with brits, and won’t be for a long time with Brits.
But other europeans and spanish are looking to buy. The reason it appears that things aren’t selling is because when interested people go to the bank, the banks aren’t giving out the mortgages!
I have friends who have had a few interested spanish buyers but when they go to the bank they can’t get the mortgage and then on top of that they try to flog them off with the rubbish they have on their books by offering them 100% mortgages.
So I think the information out there is misleading in saying that buyers are waiting for it to bottom out. There are lots of buyers wanting to buy now, but the banks are just not making it easy, they are the ones holding things up! As soon as the banks start realising that and start lending again the market will start moving faster. -
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@rt21 wrote:
It will be interesting to see whether history repeats itself, with the Germans and the like buying at the bottom of the market and the Brits coming in when the prices start rising. 🙂
Richard
That is already happening now 😕
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@jonas wrote:
@rt21 wrote:
It will be interesting to see whether history repeats itself, with the Germans and the like buying at the bottom of the market and the Brits coming in when the prices start rising. 🙂
Richard
That is already happening now 😕
We may be seeing the first part of the cycle but it remains to be seen whether the Brits pile in when the prices start rising
Richard
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@rt21 wrote:
@jonas wrote:
@rt21 wrote:
It will be interesting to see whether history repeats itself, with the Germans and the like buying at the bottom of the market and the Brits coming in when the prices start rising. 🙂
Richard
That is already happening now 😕
We may be seeing the first part of the cycle but it remains to be seen whether the Brits pile in when the prices start rising
Richard
I just can’t can’t see them making the same mistakes as before. Once bitten twice shy as they say. If prices start rising and they haven’t purchased, I think they will probably not bother. They either take the plunge with the rest of the europeans or they may well miss the boat 😕
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@brianc_li wrote:
Chris, I’ve always had a lot of time for you and your point of view. Indeed I’ve taken some of it aboard as is evidenced by my reference to the difference in the markets between prime and sub-prime areas in the first post on this thread.
Having said that, you standing by the comment you made “it actually is the bottom of the market” two years ago is frankly ridiculous. Your personal experience may be different but it it plainly obvious to anyone that “the market” had not bottomed two years ago. That it has fallen substantially since. You were wrong then, plain and simple and you should be man enough to take it on the chin.
I still value your input though. 😀
Have been away from my computer for a day or so, so came back to this earlier, and wrote a response, pressed submit and the thing just disappeared instead of postin, grrhh, I hate it when that happens, now I got to try and remember what I said a couple of hours ago, never mind two years back!
Will have another pop at it.
Few things:
1. I hope I can take it on the chin yes, have been ‘chinned’ by Charlie a couple of times and usually with some justification by Charlie, Angie and others.
2. I didn’t / still haven’t re read the whole post from Charlie, it was a long time ago and I don’t want to go into all the detail of a conversation back that far, but if I can be slightly defensive of my own position, I think this is all relative really. I have been posting on here, various stats on lead generation, viewing and buying trends from the inside of a real estate office for the past five years, hopefully this has been of interest. I also don’t go back too much over old ground because I try to follow in my sales life the maxim of: “if you never tell a lie, you don’t have to remember what you said” so I trust whatever it was I said was in good faith at the time.
3. Lets look at the time and what I think is the main tenet being that I said the market was at the bottom then, well I do stick by that, from my perspective, I go then and now by data on lead generation to viewing to clients buying from as far back as 1998. Our market didn’t peak as is often referred to in pricing terms here as 2007 it peaked finally at the end of first quarter of 2004 from that point it turned down in every respect right through the rest of 04-08 and lets remember that Feb 09 was four months after the crash. In the period Oct 08 – Jan 09 that would undoubtedly have been our lowest recorded lead generation period, lowest viewing client and buying client period – without doubt. For us it was the bottom of the market- without doubt.
4. Since March 09 we have seen a steady increase in all figures from the lowest point, and in fact while February last year was OK for us, this Jan / Feb has been @ 23% higher in terms of viewing clients so I quote from the perspective of leads, viewings and sales, and the bottom for us would have been back 2 years ago, and the start of the decline actually goes back 7 years from the peak. Is that fair enough comment to stand by? I don’t know, you decide I just make the point.
5. Also, when do we know and agree the bottom of the market? Who decides that and when, isn’t it usually a hindsight kind of thing, and what figures do we base it on, the Tinsa Index, the Portal Prices, Registry information, when all these things are subject to multiple issues which can distort the information, high valuations and low acceptance prices in the case of the first two, large volume sales of bank/ developer stock and the effect of under declarations or now perhaps more truly accurate?
6. Or, if I say that leads are up, viewings are up, sales are up, and there was a profit last year – after years and years of downturn, is that perhaps more accurate on a month to month basis, well of course not necessarily so, we might just be a freak of nature or ahead of the upturn, so I just say it as it is, for us. Again you decide.
I hope this input is also OK, I am not looking to win any argument here , and actually I am the last person who wants to talk the market up per se, brings back to much of the wrong kind of competition to my mind if I do that.
By the way, the commentators on the Germans, and the Scandi interest being not only on the increase but turning into buyers are entirely accurate, and there are English buyers too, and I wonder finally, if I was right that the bottom of the market was two years ago, who decides how long the bottom lasts? Could be two years could it not, could be a few more also. Could be that we in our business – have a double dip also – as I said I think earlier, I am a moment in time kind of person, not a financial analyst, I don’t necessarily think anyone is so right here or so wrong, or deserves to have “egg on their face” a year or two from now for what they say today.
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@logan wrote:
Then add to that the fact that so many expats want to leave Spain but cannot sell their properties. The picture is that of a market being hugely over supplied.
.Don’t like to pick holes in what people say, particularly you Logan but on this point, I think this is a generalisation and one often picked up by the media also, that has no real basis in fact right now. Or at least not in our market. We don’t have a million – 600,000 – 100,000 – 50,000 or anything like that sum as an over supply. Nor do we have bundles from escapees or expats.
Our enquiries from Vendors would be roughly down in proportion to how the number of buyers fell, it is not the case that we are inundated with people looking to sell and get out, in fact from peak period to trough, if the buyer enquiries fell by 90% so did the vendor position. We and all other agents had a heck of a lot more resale properties on our books back through 98 – 08 than we have today.
There are admittedly some projects out Manilva way that are overbuilt and will sit empty for a while but each time I arrive and de[part from the stunning new Malaga airport with its capacity for 20 million visitors and I think back to when it could only handle 4-5 million, and I think back to the last – over supply time – being rapidly taken up – post the period of bust – I don’t see that being so much of a problem for our CDS coast, not a problem at all, our problem now is delivering what people really want at the price they want to pay. It often isn’t available, and believe it or not they have to act quick of the right property comes to the market.
Our clients also don’t have a finance or banking issue. In some cases far from it, they have some amazing finance offers.
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“House hunters out and about all over the place” This was on another forum last year and I did ask the poster how they knew this and what nationality they were 😕
I lived in marbella during all the boom years and never noticed buyers all over the place let alone know their nationality.
So now the Germans are buying, well it’s a change from the Russians I suppose. 🙂 I know an Estate agent who is not British and sells almost exclusively to Germans and Scandinavians. They are keeping their heads above water by rentals and property management, scarcely sold anything in 2 years! They do have a lot of Germans wanting to sell though. This is in an area where there are as many German residents as Britsh.
It will be difficult to tell when the market bottoms out on the Costas. I guess it will be when individual buyers see a property they want and feel the price is reasonable. Many owners of decent property won’t reduce at all. I know a few who have properties on sale and will not reduce even if they have to wait years. Most of the reductions will come from blocks built way out in the sticks that no-one in their right mind would want.
One thing I do know, you won’t find real bargains by trawling the websites. You need to be on the spot and network or have someone there to do it for you…and I don’t mean those rip off property finders just a decent local agent who knows their stuff.
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I agree with a lot that Chris has to say. It is hard to find good quality properties in good locations in the Marbella area and for so called sellers that will not reduce their asking price, just tells me that they are not serious sellers. We all know of properties like this and that is why nobody bothers marketing them. Ridiculous asking prices just waste peoples time.
CDS is in a totally different position than in the last downturn, the size of the new Malaga airport, the number of cruise ships now stopping in Malaga, the AVR trains to Madrid and Barcelona, the toll road running from Malaga to Sotogrande – none of these were built. So just let the CDS pull off the Euro – Vegas development and property prices will go only one way – upwards.
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‘When the market bottoms out’ is often said, however there is no written law with property that it will always be a good investment, will the market just float along somewhere middling rather than ‘bottom’ or ‘top’?
Too many Brits/Irish etc had their fingers burnt in Spain and other so called ‘hot markets’, it’s doubtful whether the Brits will ever pile in again, lack of funds, remortgaging problems, exchange rate problems, plus again the extortionate buying costs. I’d be very surprised to see a real uplift in Spanish property until the 1,2, or 3 million unsold properties get sold off first. 🙄
If I wanted to buy again in Spain, it would not be as an investment, it would have to be because I’d prefer to live there, but then Italy or the South of France would be far nicer, more genteel, and less developed on their coasts, but that’s just my opinion and that of many canny Brits already there and cushioned more against huge falls in prices. 😉
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@angie wrote:
‘When the market bottoms out’ is often said, however there is no written law with property that it will always be a good investment, will the market just float along somewhere middling rather than ‘bottom’ or ‘top’?
Too many Brits/Irish etc had their fingers burnt in Spain and other so called ‘hot markets’, it’s doubtful whether the Brits will ever pile in again, lack of funds, remortgaging problems, exchange rate problems, plus again the extortionate buying costs. I’d be very surprised to see a real uplift in Spanish property until the 1,2, or 3 million unsold properties get sold off first. 🙄
If I wanted to buy again in Spain, it would not be as an investment, it would have to be because I’d prefer to live there, but then Italy or the South of France would be far nicer, more genteel, and less developed on their coasts, but that’s just my opinion and that of many canny Brits already there and cushioned more against huge falls in prices. 😉
I agree with what you say. The brits may never return in masses to buy properties in spain. I think this is the reason why spain is encouraging other europeans and further afield. The world is a big place, I don’t think Spain is relying on brits alone to help boost their economy. British buyers are a very small percentage on the scale of things. I don’t argue it would help Spain if Brits start buying again, but it is not the british who will make or break spain.
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Personally I don’t think anyone will return en-mass to buy anywhere for a while. After each property crash, the majority who got their fingers burned mostly decide to be sensible and so the market will have to wait for the next generation to jump on that particular bandwagon.
Spain will always be a popular place for proximity to the UK, and whilst many don’t like/agree with the red tape, laws etc, it is generally stable and all nationalities are tolerated. And of course the weather – 27 degrees today – helps.
In the mid 90s it was hard to even find a property to rent long term, now there is a huge oversupply, same for buyers, oversupply and until that is redressed, I fail to see how the market will be massively in demand. This is excepting the popular areas in Marbella etc who will always have a steady demand and consequently wont have much of a price drop.
There are many properties where the sellers don’t have to sell, like the majority of the Spanish, they just sit on them until they either get bored of trying to sell, or remove them.
The market is returning to normality as it was prior to the boom, properties are selling and to all sorts, interestingly though my colleague told me the cheaper properties he has haven’t invoked a lot of interest but he has had requests for villas in the 500k region!
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@katy wrote:
Spanish media are looking at the Chinese market as a possibility…plenty of Chinese restaurants for them. 😆
Heard on TV that the American market hasn’t bottomed yet.
If the Brits aren’t buying all the Brit estate agents might as well shut up shop as other nations won’t buy from them.
Apparently the Spanish government has given a 5 year business rates ‘holiday’ to all chinese owned businesses !
It came up on another forum & all the brit. business owners new about it & the Spaniards are fuming , & with good reason ! I ‘ve had a trawl around but cn’t find anything concrete. -
Inez wrote:The market is returning to normality as it was prior to the boom, properties are selling and to all sorts, interestingly though my colleague told me the cheaper properties he has haven’t invoked a lot of interest but he has had requests for villas in the 500k region!
It is easy to understand:
– the cheaper properties are bought by people who now worry about tomorrow.
– the 500K property are bought by rich people who are not worried about the future -
@mark wrote:
Looking for comparisons in the last crash, perhaps we are around 95/96, 3 years after the crunch of ’92. The market peaked around 10 years later. In which case the market will peak a decade from now. Just a hypothesis. Might be 15 years, who knows.
Maybe, unless you are looking at a double-dip recession.
http://www.thisismoney.co.uk/news/article.html?in_article_id=522114&in_page_id=2
Then by your hypothesis, it’s looking more like 2021. I know it’s only (UK) speculation, but I guess we are in a worldwide economy.
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In actual fact it’s entirely predictable to a certain extent when the Spanish property market will bottom and then recover.
It’s a market like anything else and markets recover when economies recover.
In Spain the property market in tourist areas is reliant on the economies in three principle countries. UK, Germany and Holland. Plus the domestic Spanish economy.
These countries need to have sustained annual growth percentages of at least 4%, low interest rates, unemployment and inflation which provides the population with high disposable incomes. Not easy to achieve or sustain but not impossible.
Once these factors are in place and the property backlog gets sold off the market will recover. Until then it will decline, ‘simple’ as the Meerkat ad says.
You can monitor these countries financial performance and when upticks appear in all these sectors the market will start to improve.
At the moment Europe and the US is some distance away.
Even the Spanish government has estimated the over supply is between 1 and 1.5 million unsold properties. That’s an effective fiscal drag on market performance which adds to the equation and extends market deflation. -
@logan wrote:
In actual fact it’s entirely predictable to a certain extent when the Spanish property market will bottom and then recover.
It’s a market like anything else and markets recover when economies recover.Well considered statement and fair enough, not going to argue with any of that overall, umbrella, generalised view, all looks sound enough to me.
Would you consider or accept the view that perhaps in pockets let’s say, that the – actual/real = “market’ for buying and selling property, in my case on the CDS, is much improved on where it was this time in 2009 and 2010?
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@Chris McCarthy wrote:
Would you consider or accept the view that perhaps in pockets let’s say, that the – actual/real = “market’ for buying and selling property, in my case on the CDS, is much improved on where it was this time in 2009 and 2010?
Yes, I don’t doubt there will be local rise and falls of interest and some actual buyers. That takes place in any market depressed or otherwise.
However personally as a potential investor I am really only interested in the macro picture. Other markets will recover quicker with more relevant returns. -
Hi Logan,
Am not trying to be clever here, but am aware it might look like it..
@logan wrote:
, I don’t doubt there will be local rise and falls of interest and some actual buyers. That takes place in any market depressed or otherwise.
Then the CDS property market looks like it hit the bottom sometime ago to me, and has been picking up / recovering for some time, this in terms of lead generation interest and buying interest and activity, although one would have to accept that certain Vendors may still have hard choices on price to make if they want to sell. That’s usually the case in a ‘buyers market’ however, but is good for Vendors to know that the market is recovering for the many that are holding for value to return.
And one would have to accept that other influences could forestall that recovery and bring it down again, although of course that can be said at any given time. But if most of what I have said can be trusted, I could be right that the market is a much better one than it was two and one year ago.
@logan wrote:
personally as a potential investor I am really only interested in the macro picture. Other markets will recover quicker with more relevant returns.
There was an interesting statement on a thread not long ago, if I recall by Blackberryway or some similar title, who said something akin to a lot of people’s interest in Spanish property was not to do with ‘investment potential’ or otherwise, they made their investments elsewhere and spent their returns on the benefits of a Spanish property. Thus I would think that your interests are very different than many who are looking at Spanish property, they are not looking for multiple unit deals from banks, they are not looking to buy to then sell on at a higher price within a specific timeframe and business model, influenced by macros et al.
What am saying is, you know what works for you, but does that work or resonate with the average person looking to buy a property in Spain.
I have recently been presented with a package scenario for the individual to buy on a project, that might be worth a bit of back and forward debate between us, me the real estate agent and you the confirmed pure investor, as to whether or not this represents for the individual an OK and interesting investment and use property, set against what the market was, is and may be in the future.
I actually would value your response to what seems like a ‘good deal’ to me, and how you might view it as an investor.
Well, that said I would be grateful if you would drop some of the wider financial analysis view of all the markets and not look solely at whether something is going to make money and returns, and perhaps take it from your side and mine, as a kind of John and Mary would like to own a home in Spain scenario – and just see whether we have some common ground on what might be a good deal for John and Mary.
You might not believe it, but I have never sold or presented property as a good investment or on the basis of its returns, I think I have said elsewhere that I complained a good number of times to the Advertising Standards Authority and the National Press in the UK about people promulgating returns of 20 – 40% per annum, and am really wary now of actually telling John and Mary that this package is a good investment, but you might help me understand if it truly is a great way to buy at this time, cos… well it just looks like it to me.
You up for that and I start a thread tomorrow about it?
Might help stop me making a fool of myself or getting to clever for my boots, and am interested to see whether it answers some of Angies concerns about the costs of buying a Spanish property, and to see whether it is the kind of package that will be around for very long.
I don’t want this to be a challenge debate, just a straight forward, what’s right or wrong with this scenario, and in the end do the pro’s outweigh the con’s.
As I said I would find the debate very valuable, win, lose or draw – although as I said it is not a challenge, and hopefully is at least a worthy and interesting exercise.
Please let me know.
Cheers
Chris
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the bottom of the market is when the price falls no more that has not happened yet.
its not when no one is looking,people are looking to see whats out there at what price and how much the market has fallen and if sellers are being realistic,just because more people are looking doesn’t mean the bottom has been reached it means the vulchers are begining to see so pickings -
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Chris, thank you for taking the time to write such a long and considered reply. I do understand where you are coming from but, as before, we’ll have to agree to disagree on this one.
I’m 100% with Logan on this. Until the European economies in general and the Spanish market in particular start to show significant recovery the market will remain in the doldrums.
Regardless wether potential purchasers follow the economy and financial markets or not, property markets are driven primarily by supply and sentiment. We all know there is over supply in the Costas market, although I’ll happily grant that there may be some segments where it is more limited. Sentiment will not pick up by any meaningful amount until we see unemployment dropping and real salaries rising.
What I’m seeing in my regular trawls round the web and semi-regular inspection trips is that prices are still falling. As I have said earlier, I expect that general trend to continue for some time yet.
One other point whit I’m at it. Mark, along with others previously, has made a comparison with the early 90’s downturn. I honestly don’t think that is a good comparison. This is by some way the worst downturn since the 30s. Full recovery is going to take a lot longer than it did two decades ago.
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@logan wrote:
Chris McCarthy.
I take part on this forum seeking intelligence and original ideas. Let me know what you have.Haha!
I don’t have much of the former and none of the latter, so am probably not that much use to you, but hey for myself I am here to listen and learn and maybe develop some of the former and get one of the latter, will start a thread shortly titled: Deal or No Deal.
Thanks
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@brianc_li wrote:
Chris, thank you for taking the time to write such a long and considered reply. I do understand where you are coming from but, as before, we’ll have to agree to disagree on this one.
Am good with that, thanks for looking at my view
@brianc_li wrote:
I’m 100% with Logan on this. Until the European economies in general and the Spanish market in particular start to show significant recovery the market will remain in the doldrums.
Can we just clarify as you make the point about the worst downturn since the 30’s, the Spanish property market is not alone in being in the doldrums, there is this big picture out there where countless markets and businesses are in the doldrums, this is not an isolated thing – it applies to almost everything.
@brianc_li wrote:
wether potential purchasers follow the economy and financial markets or not, property markets are driven primarily by supply and sentiment. We all know there is over supply in the Costas market, although I’ll happily grant that there may be some segments where it is more limited. Sentiment will not pick up by any meaningful amount until we see unemployment dropping and real salaries rising.
What I’m seeing in my regular trawls round the web and semi-regular inspection trips is that prices are still falling. As I have said earlier, I expect that general trend to continue for some time yet.So when is the time to buy? When the economy is doing well, when employment is high, when a lot of the over supply has been dealt with? So pay more in the future and defer one’s primary goal of having a home in Spain until that time? Am OK with that, I think that is right for some, but others will see a different time to buy – they being the one’s who will take up the over supply to help create your own ideal conditions.
@brianc_li wrote:
One other point whit I’m at it. Mark, along with others previously, has made a comparison with the early 90’s downturn. I honestly don’t think that is a good comparison. This is by some way the worst downturn since the 30s. Full recovery is going to take a lot longer than it did two decades ago.
Am with you on that, back in the day we were talking about a property market collapse, today we almost saw the entire economy collapse, and still from High Street Retailers to the Car Industry the effects are massive across the board – how many of us are working in a business or market environment that could be said to be doing really well? Maybe if you working for Asda and Sainsbury’s but who else.
Which was my earlier point, the Spanish property market is not alone here, so we not arguing about buying these days, it is just when to buy, and how to judge that, and am sure the debate will go on, and on. Still think this was an excellent thread though, even if I did get chinned by Charlie in the middle of it.
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Often a post on here can be useful especially with links you would not otherwise be able to find with spending hours trawling the web. Primary sources from people on the ground likewise. Agents or their like in disguise simply selling are not.
I am sure Chris you have an abundance of original thought and ideas which I look forward to reading. 🙂
Another factor in prolonging the current recession is the surge in commodity prices across the globe, especially oil. Weaken economies will struggle to handle these issues and property will likely be the last thing on the mind of anyone. -
Can we just clarify as you make the point about the worst downturn since the 30’s….. it applies to almost everything.
Indeed Chris and that is a good part of the reason that this will be a prolonged, nasty downturn. If it was just Spain in the poo and the rest of Europe was hunky dory then expat buyers would buoy up the property market, particularly on the costas. The rest of Europe, with possible exception of Scandinavia, is struggling and will continue to do so for quite some time. In addition to which, Spain can’t now, as in previous downturns, devalue its way out of trouble.
So when is the time to buy?
The million dollar question indeed. All I can honestly say is that in my case, with cash in the bank, about ten years to go until I retire (after which I will spend winters in Spain) and a market that looks set, to me and most objective observers, to continue falling for some time. It certainly isn’t now.
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@katy wrote:
The point is Spain’s property market stalled a long time before the credit crunch. Mortgages were still plentiful, so there are other factors to consider.
IMO Interest rates will have a large impact on a market when people are over-leveraged with debt – as they are in the Spanish market… No one wants to buy when they are heading upwards, as for one you dont know where they will stop and two, most want to buy the max they can afford and dont want to leave a buffer for rate rises.
Rates peaked in the second half of 2007.
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@DITTER wrote:
I am rather concerned about the present talk of the “Bottom of the Market” as if it was a goal in itself , once it had been found all would be well again in the property world. Markets do not act like that, after the bottom is reached we may still be standing on it years later.
Dit
Very good point.
And I feel like I been standing on it a long old time already, and others feel they haven’t got there yet. But should be so fixated on it? No.
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@DITTER wrote:
I am rather concerned about the present talk of the “Bottom of the Market” as if it was a goal in itself , once it had been found all would be well again in the property world. Markets do not act like that, after the bottom is reached we may still be standing on it years later.
Dit
Very good point.
And I feel like I been standing on it a long old time already, and others feel they haven’t got there yet. But should be so fixated on it? No.
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@Chris McCarthy wrote:
@DITTER wrote:
I am rather concerned about the present talk of the “Bottom of the Market” as if it was a goal in itself , once it had been found all would be well again in the property world. Markets do not act like that, after the bottom is reached we may still be standing on it years later.
Dit
Very good point.
And I feel like I been standing on it a long old time already, and others feel they haven’t got there yet. But should be so fixated on it? No.
I just think that Spanish/Mediterranean Europe property is a toxic asset class to invest in (or speculate on) and for retirees especially so as it exposes the investor to many extra risks they dont need — excess tax residency risk, lack of rule of law risk, market transparency risk and capital risk (the greatest).
Until people realise what the game is, they will lose their life’s savings based on outdated and old fashioned mind set ideas about property and its relationship to money.
Eventually people will wise up but unfortunately it will take a generation.
— Munky
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@Chris McCarthy wrote:
@DITTER wrote:
I am rather concerned about the present talk of the “Bottom of the Market” as if it was a goal in itself , once it had been found all would be well again in the property world. Markets do not act like that, after the bottom is reached we may still be standing on it years later.
Dit
Very good point.
And I feel like I been standing on it a long old time already, and others feel they haven’t got there yet. But should be so fixated on it? No.
I just think that Spanish/Mediterranean Europe property is a toxic asset class to invest in (or speculate on) and for retirees especially so as it exposes the investor to many extra risks they dont need — excess tax residency risk, lack of rule of law risk, market transparency risk and capital risk (the greatest).
Until people realise what the game is, they will lose their life’s savings based on outdated and old fashioned mind set ideas about property and its relationship to money.
Eventually people will wise up but unfortunately it will take a generation.
— Munky
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@ozmunky wrote:
@Chris McCarthy wrote:
@DITTER wrote:
I am rather concerned about the present talk of the “Bottom of the Market” as if it was a goal in itself , once it had been found all would be well again in the property world. Markets do not act like that, after the bottom is reached we may still be standing on it years later.
Dit
Very good point.
And I feel like I been standing on it a long old time already, and others feel they haven’t got there yet. But should be so fixated on it? No.
I just think that Spanish/Mediterranean Europe property is a toxic asset class to invest in (or speculate on) and for retirees especially so as it exposes the investor to many extra risks they dont need — excess tax residency risk, lack of rule of law risk, market transparency risk and capital risk (the greatest).
Until people realise what the game is, they will lose their life’s savings based on outdated and old fashioned mind set ideas about property and its relationship to money.
Eventually people will wise up but unfortunately it will take a generation.
— Munky
and the generation after that will have forgotten all about it or not known about it and make the same mistakes or worse just like when this generation voted the labour party back in just so they could make the same mistakes again
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@ozmunky wrote:
@Chris McCarthy wrote:
@DITTER wrote:
I am rather concerned about the present talk of the “Bottom of the Market” as if it was a goal in itself , once it had been found all would be well again in the property world. Markets do not act like that, after the bottom is reached we may still be standing on it years later.
Dit
Very good point.
And I feel like I been standing on it a long old time already, and others feel they haven’t got there yet. But should be so fixated on it? No.
I just think that Spanish/Mediterranean Europe property is a toxic asset class to invest in (or speculate on) and for retirees especially so as it exposes the investor to many extra risks they dont need — excess tax residency risk, lack of rule of law risk, market transparency risk and capital risk (the greatest).
Until people realise what the game is, they will lose their life’s savings based on outdated and old fashioned mind set ideas about property and its relationship to money.
Eventually people will wise up but unfortunately it will take a generation.
— Munky
and the generation after that will have forgotten all about it or not known about it and make the same mistakes or worse just like when this generation voted the labour party back in just so they could make the same mistakes again
-
Hello.
New member – so “Hi”.
I have read this and other threads with interest since I have been contemplating a purchase myself.
I’d just like to ask if the general thoughts of places still having room to slide includes the cheaper village properties in areas like Lecrin, Otivar, Molvizar, Los Guajares? And when I say cheaper I mean below 75K euro.
I am from a land far south (SA) where the currency is ALWAYS disadvantaged to some or another degree so fluctuations between euro and pound mean nothing to me. Still if there is room for reduction on these prices I’d like to know so if I’m considering offers I keep that in mind!
Thanks in advance to all the vastly knowledgeable people here for all your input!! -
@divv wrote:
Hello.
New member – so “Hi”.
I have read this and other threads with interest since I have been contemplating a purchase myself.
I’d just like to ask if the general thoughts of places still having room to slide includes the cheaper village properties in areas like Lecrin, Otivar, Molvizar, Los Guajares? And when I say cheaper I mean below 75K euro.
I am from a land far south (SA) where the currency is ALWAYS disadvantaged to some or another degree so fluctuations between euro and pound mean nothing to me. Still if there is room for reduction on these prices I’d like to know so if I’m considering offers I keep that in mind!
Thanks in advance to all the vastly knowledgeable people here for all your input!!Hi, I don’t know much about the areas you are looking in but generally speaking if these areas are dumps then the answer is, probably yes, the prices will drop further.
However if the properties you are looking in are in good locations then I would say most prices in good areas have gone as low as they are going to go. The only way for you to find out for definite is put in an offer and see how it goes. But putting in an offer of around 50% below the price it is on the market for, will almost definetely get you a no for an answer as most owners have their properties heavily reduced already. But you could try to put in an offer of around 30% below asking price as a starting point and go from there.
A lot of buyers on here will heavily disagree and say you should wait another 2 to 3 years (mostly buyers who want the prices to drop further because they still can’t afford the prices on offer, so in a way are giving out slightly misleading views) but that really depends on the location you are looking at. If the location is good I would look towards the back end of this year, beginning of 2012 as in my view this is when things will start moving as they already are in certain places.
Spanish are on the lookout for the bargains in the better locations and will almost definetely purchase them before the foreigners get a look in, so you really have to be there to keep your eyes open.
However, there is definetely room for lowering of prices in run down locations with poor ammenities where no one really wants to buy in. Good luck with your property hunt! 🙂 -
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Here I have to say I disagree with Jonas. If prices are to continue falling, which most independent observers believe they are, they will fall in pretty well all areas.
Granted the falls will not be as great in prime locations as in other less desirable areas but there will be falls. As the last few years have shown. No area is totally isolated from what is happening in the general market.
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My aim is certainly not to buy in “dumps” but then perhaps one person’s dump is another’s delight!
And I certainly do NOT want an illegal build which is why I am largely staying away from the cortijos and fincas and instead looking within towns, at older townhouses which have been to greater or lesser degree fixed up…
However perhaps my choice of areas just shows my ignorance and maybe instead of just being small non-touristy towns they are dumps!
All I am going on is what I have been able to glean so far from tourist-type websites and I acknowledge that just like estate agent’s these are not exactly the most unbiased sources of information…. -
@jonas wrote:
However if the properties you are looking in are in good locations then I would say most prices in good areas have gone as low as they are going to go. )
Based on what?
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@divv wrote:
properties in areas like Lecrin, Otivar, Molvizar, Los Guajares? And when I say cheaper I mean below 75K euro.
!Why don’t you fly to Malaga/Granada ansd then stay for 2-3 weeks and visit all those villages? I am sure they have good areas and not so good areas. Bargain hard and somebody will budge and offer you a property at an acceptable price. But an acceptable price in March 2011 might be way overvalued in one year time.
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@flosmichael wrote:
@divv wrote:
properties in areas like Lecrin, Otivar, Molvizar, Los Guajares? And when I say cheaper I mean below 75K euro.
!Why don’t you fly to Malaga/Granada ansd then stay for 2-3 weeks and visit all those villages? I am sure they have good areas and not so good areas. Bargain hard and somebody will budge and offer you a property at an acceptable price. But an acceptable price in March 2011 might be way overvalued in one year time.
I certainly will fly out – just want to have done as much homework in advance as I can… But evidently you think the prices still have room to drop if I read your comment correctly …
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@divv wrote:
@flosmichael wrote:
@divv wrote:
properties in areas like Lecrin, Otivar, Molvizar, Los Guajares? And when I say cheaper I mean below 75K euro.
!Why don’t you fly to Malaga/Granada ansd then stay for 2-3 weeks and visit all those villages? I am sure they have good areas and not so good areas. Bargain hard and somebody will budge and offer you a property at an acceptable price. But an acceptable price in March 2011 might be way overvalued in one year time.
I certainly will fly out – just want to have done as much homework in advance as I can… But evidently you think the prices still have room to drop if I read your comment correctly …
I do not see people flocking to Lecrin Valley or Alpujarras. They will first buy in Costa Tropical and then look at the hill/mountain area.
if I were to buy, I would prefer the mountain area. -
@flosmichael wrote:
@divv wrote:
properties in areas like Lecrin, Otivar, Molvizar, Los Guajares? And when I say cheaper I mean below 75K euro.
I do not see people flocking to Lecrin Valley or Alpujarras. They will first buy in Costa Tropical and then look at the hill/mountain area.
if I were to buy, I would prefer the mountain area.Which is exactly where these places are.. 🙂
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@divv wrote:
@flosmichael wrote:
@divv wrote:
properties in areas like Lecrin, Otivar, Molvizar, Los Guajares? And when I say cheaper I mean below 75K euro.
I do not see people flocking to Lecrin Valley or Alpujarras. They will first buy in Costa Tropical and then look at the hill/mountain area.
if I were to buy, I would prefer the mountain area.Which is exactly where these places are.. 🙂
Do you want to buy house or apartment?
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@divv wrote:
@flosmichael wrote:
@divv wrote:
properties in areas like Lecrin, Otivar, Molvizar, Los Guajares? And when I say cheaper I mean below 75K euro.
!Why don’t you fly to Malaga/Granada ansd then stay for 2-3 weeks and visit all those villages? I am sure they have good areas and not so good areas. Bargain hard and somebody will budge and offer you a property at an acceptable price. But an acceptable price in March 2011 might be way overvalued in one year time.
I certainly will fly out – just want to have done as much homework in advance as I can… But evidently you think the prices still have room to drop if I read your comment correctly …
Anyone buying now and for the next 3-5 years without a proper reason — ie buy to let, speculators, topping up the pension etc — has rocks in their heads and absolutely deserves what is waiting for them.
The only excuse for buying in Spain is security of tenure for the medium to long term (which I say is dangerous due to tax residency reasons, lawyers etc..) and the ability to change things to how you like it — all other reasons are fluff.
If the stress and nonsense about property issues was removed or minimised in retirement, just imagine how much better retiring in Spain would be.
This should be the official advice of the British foreign office to all British buyers in Spain.
Its time to say the un-sayable and that time is now.
Sorry, but thats the way it is.
— Munky
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@ozmunky wrote:
Anyone buying now and for the next 3-5 years without a proper reason — ie buy to let, speculators, topping up the pension etc — has rocks in their heads and absolutely deserves what is waiting for them.
The only excuse for buying in Spain is security of tenure for the medium to long term (which I say is dangerous due to tax residency reasons, lawyers etc..) and the ability to change things to how you like it — all other reasons are fluff.
If the stress and nonsense about property issues was removed or minimised in retirement, just imagine how much better retiring in Spain would be.
This should be the official advice of the British foreign office to all British buyers in Spain.
Its time to say the un-sayable and that time is now.
Sorry, but thats the way it is.
— Munky
Spains property market will not pick up thanks to British buyers. It will take years for British to regain their confidence in the Spanish market. It will be other foreigners and spanish themselves who will start to purchase, or who already are starting to purchase. (This will probably kick in by mid 2012, so I don’t mean now)
The problem is that by the time the British want to start purchasing in Spain again, the bottom will be on its way up and it will be history repeating itself all over again… British paying ludicrous prices for properties in unwanted locations. Between the back end of this year and into 2012 will be the time you will see the best bargains out there and from reading lots of other forums and headlines it is reaching a bottom if it hasn’t already.
I don’t think British will be buying much in Spain in the next few years to be honest. But other europeans and spanish themselves will. -
The spanish will not be buying much on the costas which is where most people on the forum are interested. 33% unemployment in andalucía and low wages. How will they get mortgages on 15,000 to 20,000 pa. and the majority on 6 month contracts. The authorities announced the demolition order of another 15 houses in Cartama today…mainly owned by foreigners, que sopresa! 🙄
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Yet more misleading comments from the Junta in Andalucia yesterday, confusing the picture even more as to their intentions re. the 500,000 ‘illegal’ homes in the region.
Does the right hand know what…..etc.?
http://www.typicallyspanish.com/news/publish/article_29707.shtml -
We were talking to some friends over the week-end who have lived in Frigiliana for the last 8 years. He told us that those that can sell their properties are selling and moving back to the UK. He said it has been quite tough over the last couple of years especially with the poor exchange rate. He has not played golf for 2 years in order to economise!
He reckoned that at best he could make around £5,000 on their place or break even, which he thinks more likely. They intend to stay in Spain though.
We are visiting Spain for the first time in 3 years this summer to stay with friends who live in the Alicante region and then driving to Frigiliana. I’m looking forward to seeing if/how life has changed there.
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I shall pay £690 for 3 weeks in Salobrena during July – August 2010 (2 bed/2 bath apartment, I got 50% discount from desperate owners because I stay 3 weeks) and £350 for 2 weeks in Nerja (2 bed/2 bath apartment, I got 50% discount from desperate owners because I stay 2 weeks) around Christmas-New Year’s Eve. Both have good location.
So £1000 covers 5 weeks in Spain during the high season, with no strings attached.
On the market, those type of apartments sell for at least 180K Euros. Would anybody be crazy enough to pay that money (and 100+ Euros
monthly community fee and other taxes and utilities)? -
Claire, good to see you back 8)
We know several British couples and a few individuals whose properties have either been on the market in Spain for several years, or who have given up marketing them. Most want to move back to UK, some to France.
Property in places like Los Monterros (luxury apartment) no interest in it, inland Spain Alhaurin areas, Almeria region, mountain area behind Malaga, Cabopino etc Basically all stuck with property they overpaid for, some worth 50% less than they paid. It’s hard to see they will ever get their money back.
As for the ‘bottom’ of the market being reached, well, some bottoms sag irreversibly, as All the million plus unsold concrete urbanisations will and impact on the state of Spain’s property market for years.
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@Claire wrote:
We were talking to some friends over the week-end who have lived in Frigiliana for the last 8 years. He told us that those that can sell their properties are selling and moving back to the UK. He said it has been quite tough over the last couple of years especially with the poor exchange rate. He has not played golf for 2 years in order to economise!
We hadn’t got to the stage where we had to cancel the golf but losing about a third of our income was one of the deciding factors in selling up in Spain. I think if we had been enjoying life there like we did a few years ago we would have decided to grin and bear it but we were disillusioned anyway. When I looked at the extra we had spent just because of the exchange rate it would have paid for a couple of luxury holidays per year. It is ok. spending an arm and a leg eating out in mediocre (or even worse) rip off restaurants on holiday but when you are doing it every week 😡 We also needed a new central heating system and we had been quoted around 24,000 plus a few other improvements which would have totalled cerca 50,000…just not worth it in a falling market and a place where we didn’t particularly want to be. I am sure that many other ex-pats will be thinking the same. I too know many people from a wide range of areas/properties who want to sell, and have been trying for years.
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@flosmichael wrote:
I shall pay £690 for 3 weeks in Salobrena during July – August 2010 (2 bed/2 bath apartment, I got 50% discount from desperate owners because I stay 3 weeks) and £350 for 2 weeks in Nerja (2 bed/2 bath apartment, I got 50% discount from desperate owners because I stay 2 weeks) around Christmas-New Year’s Eve. Both have good location.
So £1000 covers 5 weeks in Spain during the high season, with no strings attached.
On the market, those type of apartments sell for at least 180K Euros. Would anybody be crazy enough to pay that money (and 100+ Euros
monthly community fee and other taxes and utilities)?Hard to argue with that!
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They are compelling figures indeed Mark.
Five weeks in peak season is probably what I’d use a place for If I bought one. Community fees, maintenance, etc alone would almost certainly cost me in excess of £1000 p.a. Add to this the cost of purchasing and the figures look quite stark.
With no capital gains in sight, indeed most likely further depreciation in values, I simply can’t see how some people are still arguing that now is a good time to buy.
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The thing is, those apartments probably don’t sell for 180k, that’s just what vendors are asking. Without knowing any else about them, I’ll wager they would sell for considerably less.
The argument goes like this: It’s the best time in years to buy, IF you have a good reason to buy and can afford it. It’s a personal choice and boils down to personal value judgements. Who am I to judge what is good value for another?
None of which guarantees that prices won’t keep going down. I think they will on average. That said, I doubt the really good stuff will go down much more. It’s always scarce and in demand. Fact of life.
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@mark wrote:
The thing is, those apartments probably don’t sell for 180k, that’s just what vendors are asking. Without knowing any else about them, I’ll wager they would sell for considerably less.
The argument goes like this: It’s the best time in years to buy, IF you have a good reason to buy and can afford it. It’s a personal choice and boils down to personal value judgements. Who am I to judge what is good value for another?
None of which guarantees that prices won’t keep going down. I think they will on average. That said, I doubt the really good stuff will go down much more. It’s always scarce and in demand. Fact of life.
The Nerja place is something like this:
http://www.kyero.com/property/1022696-apartment-for-sale-nerja
http://www.kyero.com/property/1311898-apartment-for-sale-nerjaSalobrena place is something like this:
http://www.kyero.com/property/998336-apartment-for-sale-salobrena
I have no idea is these are good prices or not…
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@mark wrote:
The argument goes like this: It’s the best time in years to buy, IF you have a good reason to buy and can afford it. It’s a personal choice and boils down to personal value judgements. Who am I to judge what is good value for another?
.
Mark, you are among the best judges of Spanish property prices.
We are just observers. My point is that I still do not see any reason to buy instead of renting.
Last year I spend 3 beautiful weeks in Peniscola (Castellon), this year I am trying Costa Tropical over the Summer and then Neja over the winter (to see if indeed the climate is as mild as the brochure claim…).
When/if prices go low enough and I get fed up of searching holidaylettings, I might buy something.
I have a question: some people bought apartments for say 25000 Euros in say 1992. The price went to 200K in the crazy years 2005-2006. If they want to go back to UK, why aren’t they happy to sell now for say 50000 and get two times as much as they paid?
I understand that people that paid 200K aren’t able to drastically reduce the prices, but what about those who bought at the right moment, enjoyed 20 beatiful years in their propetrties but now do not like it anymore?
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You have a point there. I know an Irish couple who did just that. Bought a nice apartment in marbella for around 27,000 in 90’s. Rented successfully for years and paid for all their expenses and spending around 2 months there every year. They have now retired and are into far away exotic holidays and fed up with Spain, plus rentals are almost non-existant. Two years ago they put it on the market for 250,000, now reduced to 200,000 🙄 If I were in their position I would put it up for any sensible offer and bugger off for a long holiday to somewhere a little less unspoilt 😀
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@katy wrote:
You have a point there. I know an Irish couple who did just that. Bought a nice apartment in marbella for around 27,000 in 90’s. Rented successfully for years and paid for all their expenses and spending around 2 months there every year. They have now retired and are into far away exotic holidays and fed up with Spain, plus rentals are almost non-existant. Two years ago they put it on the market for 250,000, now reduced to 200,000 🙄 If I were in their position I would put it up for any sensible offer and bugger off for a long holiday to somewhere a little less unspoilt 😀
This is a good example. The normal price for that house should not be more than triple, if in good shape. Instead of asking for 81K Euros, they ask 200K.
A 50% reduction would not even make the price attractive enough.
As I said before, whoever bought for 250K in 2006 will not be able to reduce the price to 81K but who bought for 27K in 1995 could easily reduce the price to 81K. It is amuzing when one sees adds put by these people as selling below market value… Below market value for them means below 5 times the price they originally paid…
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As it happens Flosmichael, Nerja is one of the areas I know particularly well. It’s one of the towns where I have particularly been looking at property. Having been there many times in winter, usually over Christmas and New Year, I can tell you that it can be anything from sunny and mild with temperatures in the 20s to cold and wet. On my last trip there in Dec/Jan 09-10 we had an incredible amount of rain. A total of nine inches fell in one ten day period.
The two properties you link to are in Capistrano which as you are no doubt aware is on the edge of town thus a bit less desirable than those closer to the center or beaches. The asking prices seem to be ballpark. My guess is that they’d probably actually sell at a 20k discount or so from those prices.
To be honest I wouldn’t touch Salobrena, certainly the newer area by the sea which that place appears to be, with a very large barge pole. On my last trip to Nerja I drove there. My guess is that there are a total of some 15k or so apartments in that development. No more than a couple of hundred were occupied. I didn’t see a single shop, restaurant or bar open. It was a ghost town and a miserable one at that. Now it may get better in the summer and could well look a happier place when it is not blanketed by torrential rain as was the case during my visit. I took away the impression that it will either fall into decay and be overrun by vandals or be could well be one of those places that is taken into public ownership and used for social housing.
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I have never stayed there but I’ve always thought of Capistrano as quite a pleasant area. I’m however aware of two structural problems. There may well be more.
– They built right to the edge of the national park so didn’t leave enough room for the road which was supposed to serve the properties higher up the hill. One of the places I visited was a beautiful apartment, which I would have considered buying, were it not for the steps I had to climb to reach it. This was probably the equivalent of having to climb six floors of an apartment block before you got to the front door.
– Many of the houses were built into the side of a quite steep hill. There have been some reports of slippage, cracks appearing in walls, etc.
The only community issue I have ever heard of was on the Tripadvisor Nerja forum. A few years ago people were complaining about the number of stray, sometimes vicious, dogs that were roaming the streets. I haven’t seen anything recently.
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@katy wrote:
[quote=”Claire” We also needed a new central heating system and we had been quoted around 24,000 plus a few other improvements which would have totalled cerca 50,000…
24,000 thats some central heating system i had my 4 bed semi done and didn’t come any where near half that, sounds like its not only the resturaunts that were ripping you off
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@katy wrote:
You have a point there. I know an Irish couple who did just that. Bought a nice apartment in marbella for around 27,000 in 90’s. Rented successfully for years and paid for all their expenses and spending around 2 months there every year. They have now retired and are into far away exotic holidays and fed up with Spain, plus rentals are almost non-existant. Two years ago they put it on the market for 250,000, now reduced to 200,000 🙄 If I were in their position I would put it up for any sensible offer and bugger off for a long holiday to somewhere a little less unspoilt 😀
Agree absolutely.
Either 1 of 3 things :
(i) greedy (ii) retarded or (iii) badly advised.
No excuse for this whatsoever.
Mentality for commercial decisions has gone out the window, utter idiots.
Speculative lesson in the making. Have no sympathy for these fools whatsoever.
— Munky
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@ozmunky wrote:
Mentality for commercial decisions has gone out the window, utter idiots.
Speculative lesson in the making. Have no sympathy for these fools whatsoever.
— MunkyMmmm almost had a sort of UBEDA moment coming on…
YAWN 🙄 🙄 🙄 🙄 🙄 🙄 !!!!!!!!
But that would be unfair I suppose.
This is however Spanish Property Insight and not Spanish Property INVESTMENT
I feel sorry for you; that you continue ad infinitum to only look at Spanish home ownership, along with any number of the other ‘analyticals’ here, as purely a commercial decision.
Buying property, not only in Spain but in the UK, has always been a relatively poor commercial or purely investment decision, that is the great mistake that so many British people have made in the past what 20 years or so, almost no market or group of people look at property in the same way as the British / Irish do. I would suggest given the evidence of recent times, to talk purely in terms of commercial decisions and financial investment with respect to property is to put it bluntly – retarded.
Mark was right as it happens, there is of course a very solid argument (that I think that you might be a candidate for the ‘utter idiot’ badge if you ignore) that for many… there has never been a better time to buy! And I raise my hat to the many who have been on here countless times, most only posting once or twice, who advise us regularly that… they are not buying or investing commercially – they are buying with funds that they have earned either commercially or from their investments – they want to enjoy their life, and spend some of their earned income.
And I am sorry, but to also argue that someone who bought in the 70’s – 90’s should now just sell their home for the price they paid for it 20 plus years ago, or for just a few bob more – how ludicrous can you get really? Even it were on offer though the ‘analyticals’ on here would advise against the purchase today- because its value may still fall by 50%.
Sad really, that the argument is so full of certainty by some misguided souls… That simply refuse to listen to some of the wider aspects.
I get that some people would like to and indeed should rent, i get that some want to holiday further afield and for whom that would make more sense, not just financially but more importantly emotionally, each to his own. I get that actually PENSIONS, BONDS, STOCKS, SHARES – PORK BELLIES and any number of other futures or investments may return a far greater yield. I think we all get that. However as was also said… Who are you to judge exactly?
Think about it, for more than 40 years people have been buying homes on the Costa del Sol, and there are reportedly 1 million Brits who have done so across Spain, and guess what… there will be another million to follow – all of them undoubtedly utter idiots. Pah!
You just don’t seem to get it really, and as I head back to the Costa this weekend, looking forward to my round of golf in baking sun, on rolling fairways, with a Swede, a German and an Italian making up my fourball and afterwards with a sundowner on the terrace, well I will almost feel sorry for you, you wrapped up wherever you are, holding onto your Ovaltine as the rain lashes down and another grey day looms ahead, where you become a slave to mamon having probaby just checked every agents latest listing in the local Friday paper to find out whether your two up two down invesments have gone up or down in price in the past 24 hours.
Heaven forbid you should sell them and get a bit of real pleasure out of life hey!
Perhaps you should meet up with Adiep on any UK High Street where you will see a lot more football shirt wearing types than you will in the lovely port of Duquesa, and talk about how you can now buy plots of undeveloped land in strips only, in the lovely UK and simply over the phone, that will commercially go up on value by 1,000% in the next year alone. Seems it is entirely legal to buy that stuff in the UK.
Meantime, let Angie, Claire, and the likes continue to warn, advise, explain, argue the case for many poor souls who made unfortunate decisions on buying in the past, and let’s let the Insight be balanced and fair to all sides of the argument which Brianc_li allows as a future purchaser and avid market watcher, that helps people make wiser and more informed decisions, rather than denouncing places as ‘dumps’ or making out people are ‘idiots’ when you patently don’t have a clue.
As for me, well don’t worry, I will get my share of grief for not having a clue either… I always have Charlie 😀 😀 who will come and give me a few good quick kicks in the shins or dig up some of my long dead posts from the past to toss at me for being a pompous, overblown, two faced, double dealing charlatan. And quite rightly so its about balance, which is something you rarely get from you types who are so CERTAIN of yourselves.
Mmmm, not quite a rant I hope. Going to go watch a bit of telly now.
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what a lovely post Mr M ……….. also, just seen your latest magazine “your VIVA” in my local “cafe”; well, it’s just fantastic – what a great read; fun, interesting and optimistic; and well, also, quite a few “sexy” properties…………
there are those that can and do; and those that…….well, you know just complain, moan etc and don’t have kids that are proud of them!!!
😉 😉 😉 -
….as I head back to the Costa this weekend, looking forward to my round of golf in baking sun, on rolling fairways, with a Swede, a German and an Italian making up my fourball and afterwards with a sundowner on the terrace,
My! What a charmed life (you lead us to believe) you have ,Chris! 😉 As for the UK, well, we in the South and I believe in much of the rest of the country, have enjoyed some beautiful weather. From looking at the Mediterranean countries weather, we are fairing just as well they are. It was truly spectacular walking around the RHS garden at Wisley this week, in the sunshine, seeing the massive swathes of many different varieties of daffodils. Much better than walking around, hitting a little white ball around the grass trying to get it into a hole in the ground! 😆
Meantime, let Angie, Claire, and the likes continue to warn, advise, explain, argue the case for many poor souls who made unfortunate decisions on buying in the past,
I’ve retired!
Enjoy your golf and I have to say your posts are mostly quite entertaining. 🙂
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@Chris McCarthy wrote:
… I always have Charlie 😀 😀 who will come and give me a few good quick kicks in the shins or dig up some of my long dead posts from the past to toss at me for being a pompous, overblown, two faced, double dealing charlatan.
CHRISTOPHER!! ….. I would never use those words, they would be far too generous. 😆
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I was in marbella 2 weeks ago tying up a few things. Rained all the time, some roads closed by landslips and the beaches looked as if a mini tsunami had struck! 😆 It’s not Camelot…July and August are too hot.
UBEDA the way you are brown nosing Chris you must be after a job now they are selling lots of properties
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@katy wrote:
UBEDA the way you are brown nosing Chris …..
Which brings us nicely back to topic: When will this market bottom?
Well done Katy!Though after eight pages of discussion, I don’t think we’re any closer to finding the answer. 🙁
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@Chris McCarthy wrote:
This is however Spanish Property Insight and not Spanish Property INVESTMENT
I feel sorry for you; that you continue ad infinitum to only look at Spanish home ownership, along with any number of the other ‘analyticals’ here, as purely a commercial decision.
Buying property, not only in Spain but in the UK, has always been a relatively poor commercial or purely investment decision,
According to that, buying property is a lousy investment. So why, buy? even you cannot offer a decent argument. Suggesting that spending hundreds of thousands of euro’s is not a investment decision is ridiculous. There is no reason why anyone needs to buy property in Spain when renting is half or less the cost and removes massive potential liabilities.
Good luck with finding people who don’t care about money and want to throw it away, it must be an estate agents dream.
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Hi (first post here)
Very interesting thread (made me register 😉 )
I’m not familiar at all with the various markets around the costas, but I really get the feeling that the markets where the Brits tend to buy is almost entirely dependent on exchange rates. Simple as that. I don’t have much data (does anyone when it comes to Spanish house prices?) but I suspect house prices in the Brit enclaves have pretty much mirrored the value of the pound for many years now.
The fact that renting is better value than buying will obviously have an affect on areas with large permanent populations, but not so much in areas where most purchases are buy-to-lets.
Here in Madrid it makes far more financial sense to rent than buy, especially now the government has removed the fiscal incentives to own property, but I think many young Spaniards still take up “pisos de protección oficial” if they get the chance. The Spanish definitely consider home ownership as something vital (moreso even than the Brits I suspect) and with mortgages typically lasting 30 years, many feel inclined to buy sooner rather than later. My feeling is that many Spanish have been encouraged (or forced) into home/land ownership over many generations by a combination of a weak currency and government incentives. It’ll take a while for the attitude to change but, if they manage to stay within the eurozone, I suspect they might discover that those incentives are no longer and they may end up being more teutonic in their attitudes towards house buying.
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Renting is far more sensible for now as peterhun says, as some American idiot said once ‘there are known knowns, and known unknowns, and unknown unknowns’ or something like that but Spanish property seems to fit all of that. It seems pretty risky to me for Brits, with current exchange rates, high completion costs, Spain’s financial problems (and Portugal’s next door) as well as all the other problems, unless you negotiate something like a 50% discount that’s genuine.
Enjoying some lovely golf in the South of England at very reasonable prices (unlike Spain’s) several times this week in sunny warm weather for a change, not too hot either! 8)
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@angie wrote:
……. unless you negotiate something like a 50% discount that’s genuine.
And Angie therein lies the conundrum…. there are some great deals out there for the RIGHT person, and at the RIGHT price, that make renting a nonsense and buying to be the perfect moment. There are indeed different markets and different options for different folk.
And people are negotiating deals with us every day – Poland Pete or no – people are buying every day, for their own RIGHT reasons.
And UBEDA thank you for your kind comments about our most recent magazine, I thought it was a nice thing to say as it happens, given that it has had something of an overhaul which is probably led you to comment, so your nose was then rubbed unfairly somewhere it hadn’t been in the first place 😀
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@Chris McCarthy wrote:
@angie wrote:
……. unless you negotiate something like a 50% discount that’s genuine.
And Angie therein lies the conundrum…. there are some great deals out there for the RIGHT person, and at the RIGHT price, that make renting a nonsense and buying to be the perfect moment. There are indeed different markets and different options for different folk.
Some people present relevant figures, others just behave like toddlers and keep on repeating the same broken records… “renting is nonsense”, “perfect moment for buying”…
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Just to illusrtate the point that it all depends on relative value and wealth, think about it from a Swiss person’s point of view (this connects to the other thread going on about exchange rates).
I have seen plenty of examples of 50% reductions for holiday homes in Spain, not all of it rubbish. The Swiss Franc is 20% stronger against the Euro than it was 2 years ago. So a Swiss person with CHF in cash can now buy a nice holiday home on the Spanish coast for 70% less than a couple of years ago. Meanwhile, Swiss house prices keep rising, making them feel wealthier. Makes sense for them to take advantage of this situation, doesn’t it? Especially considering that money in the bank earns you nothing whilst being eaten away by inflation.
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@mark wrote:
Just to illusrtate the point that it all depends on relative value and wealth, think about it from a Swiss person’s point of view (this connects to the other thread going on about exchange rates).
I have seen plenty of examples of 50% reductions for holiday homes in Spain, not all of it rubbish. The Swiss Franc is 20% stronger against the Euro than it was 2 years ago. So a Swiss person with CHF in cash can now buy a nice holiday home on the Spanish coast for 70% less than a couple of years ago. Meanwhile, Swiss house prices keep rising, making them feel wealthier. Makes sense for them to take advantage of this situation, doesn’t it? Especially considering that money in the bank earns you nothing whilst being eaten away by inflation.
What would Swiss people do in Spain for more than 2 weeks/year? They enjoy skiing so coming between December-April is not considered. The weather is Swizerland is quite good over the Summer. Besides, 2/3 of Swiss people speak either French of Italian so they would prefer going to beaches in countries where they could use their native language.
Life in Swizerland is expensive and (non-banking) salaries are not extremely high…
If UK had the most beautiful regions of the Alps (as Swizerland has) and a much better Summer weather (as Swizwerland has) , I doubt that people would be inclined to spend all their holidays abroad.
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@flosmichael wrote:
Some people present relevant figures, others just behave like toddlers and keep on repeating the same broken records… “renting is nonsense”, “perfect moment for buying”…
Oh c’mon Floshmichael you can do better than that….
Or perhaps just read the Moderators post… he is also talking about the right people, right price, right time…. get over it, it happens. People buy, lots of them, always have, always will, the flow is something that we discussing right now.
Am just real sorry if it spoils your perfect, yet to me – wrong headed certainty -of what comes across to me, as your rather train-spotting anorak view and approach to the subject. Though I find your various notes on our various coasts and your quite fulsome research on your trips, really quite interesting so keep those coming, but take a better shot at my argument than the one above.
Got to toddle off now only popped in by accident…
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@flosmichael wrote:
What would Swiss people do in Spain for more than 2 weeks/year? They enjoy skiing so coming between December-April is not considered. The weather is Swizerland is quite good over the Summer. Besides, 2/3 of Swiss people speak either French of Italian so they would prefer going to beaches in countries where they could use their native language.
Life in Swizerland is expensive and (non-banking) salaries are not extremely high…
If UK had the most beautiful regions of the Alps (as Swizerland has) and a much better Summer weather (as Swizwerland has) , I doubt that people would be inclined to spend all their holidays abroad.Heaven help us really…..
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@Chris McCarthy wrote:
@flosmichael wrote:
What would Swiss people do in Spain for more than 2 weeks/year? They enjoy skiing so coming between December-April is not considered. The weather is Swizerland is quite good over the Summer. Besides, 2/3 of Swiss people speak either French of Italian so they would prefer going to beaches in countries where they could use their native language.
Life in Swizerland is expensive and (non-banking) salaries are not extremely high…
If UK had the most beautiful regions of the Alps (as Swizerland has) and a much better Summer weather (as Swizwerland has) , I doubt that people would be inclined to spend all their holidays abroad.Heaven help us really…..
I was replying to Mark, who is a smart person.
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@Chris McCarthy wrote:
but take a better shot at my argument than the one above.
Got to toddle off now only popped in by accident…
Do you consider that to be an argument??? (Some )real estate agents think that, if they repeat some non-sense 1000 times, then people will believe them…
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I don’t see why the Swiss would buy just because they can 😕 Doesn’t sound logical! We could all probably buy in a few places but don’t want to. As I said I lived there, summers were mainly nice. Picnics and concerts on the lake, medieval (unspoilt) villages and clean air. Our friends who were born in Versoix can pop into France in 15 mins (spa and casino and elegant hotels) and if they want sand and sea it’s not too far from Nice or some of the Italian resorts.
Winters around Geneva are usually mild, although it was bad this year but during the two years we lived there we didn’t get any.
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I think the example of a Swiss person possibly being interested in buying in Spain was made solely in terms of exchange rates rather than any personal/cultural reasons for them to buy. I think it’s a relevant point – many London EAs claim that London prices have been propped up during the UK recession because the devalued pound attracted lots of foreign buyers. If the Spanish currency were to devalue by say 30% then it follows that there’d be more foreign interest, especially in prime areas that tend to be immune to the state of the local economy.
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Most of my argument against buying in Spain now is and has always been aimed at Brits because of exchange rate problems, and renting for them is a safer option, unless as I said, a 50% reduction can be had, so buying then does make sense even for Brits.
I’ve no reason to dispute Chris’s figures are generally up on previous years as for Eurozone members, and countries whose currencies have risen against the Euro it may also make sense to buy in Spain now. Don’t forget, only pro-active and more transparent agents are making stronger sales, we don’t want the previous types back who lied through their teeth whilst earning huge commissions.
Spain also needs to reduce completion costs on purchase to ease it’s property problems. 🙄
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Although purely based on economic facts one would conclude that prices still have a long way to fall, I personally have grave doubts that we will see falls of up to 50%.
I think that would only happen if the property market took fright and there was a firesale of property on a large scale. The banks who perhaps are one of the biggest holders of property have so far taken a measured approach to the sale of their portfolio and a great deal depends upon how long they are prepared/able to sustain this.
In their position it doesn’t make sense to flood the market with property particularly in the current economic cycle. That would just add more instability to an already fragile economic situation.
When will this market bottom out ? Well I admit I haven’t a clue. Apart from having no micro knowledge of the market there are too many variables for my liking to be able to predict with any confidence. Yes prices could still fall significantly but on the other hand I could also see a situation where prices fall very little and bump along as they are for many years until they eventually reach their natural equilibrium rate.
Other issues that complicate the situation are the diversity of the market and the scale of illegal builds. The latter will undoubtedly have a real drag on existing and future demand until it is resolved.
As with the arguments about whether the euro will collapse this year or next year, I shall continue to read with interest the posts from those who appear to have a fairly confident grasp of where the property market will be in the short to medium term.
Richard
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My trip to Spain was cancelled this week, I picked up a really nasty bronchial and chest infection which knocked me sideways, so looks like I am staying in blighty for the rest of the week and having had Legionnaires Disease back in October or so, well best place for me! So much for the aforementioned relaxing round of golf!
However, just thought I would let you know… the office in Spain has 6 clients out viewing properties today, 5 of them on a first viewing, apparently the office looked like a busy coffee shop first thing and both clients and staff all pumped up to be getting out and looking at what is available.
Just thought I would let you know…
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I think all discussions on prices, bottoming out, rebound etc can be summed up in the article by Gonzalo Bernados!
He starts of by stating the price bottom was LAST YEAR and then one of the top points in your next move on buying, goes on to say negotiate for 15% – 20% discount.. Hummmm, did I miss something. This is not my first rodeo, but if we are fairly priced and we cannot expect the price to drop, normally you would go for a feel good discount of the Realtor Fees or initiation of the contract fees, etc, that comes to about 3%-5% so that the buyer and seller feel good. Chris, you could probably speak to this!
20% discount, even if not hit and we got half of it, would say prices will drop about 10% for the year of 2011 and that would show up in anyones figures.. With so much confusion where are we plebes meant to come in 🙂
(In my organization with research reviews done by independent analysts, they would get a rocket for a call like that and probably not another contract for research seeing they are pandering to all sides)
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I hadn’t read that article until you mentioned it kgpoc:
Have to say I have mixed feelings about it.
Prices are actually down “almost as much as the US or Ireland”
With the odd exception, this is simply not true. Asking prices are currently running around 25-30% lower than at the peak. This is what Tinsa reflects. In Ireland they have fallen – as has the market – by almost 50%.
Prices in middle-class districts of the main cities “will not fall anymore”
This I actually agree with, although I’d expect stagnant prices and inflation to eat away at even the value of these places for a few years.
Though he believes 2010 will turn out to be the bottom of the cycle for housing starts, he expects prices to continue falling everywhere but the best locations, especially in coastal areas with lots of holiday-homes, municipalities with small populations, and subprime areas with high stocks.
This strikes me as plausible. I broadly agree with it.
Go for a holiday-home in one of the best areas, where the best discounts are to be found.
An oxymoron if ever there was one. The best discounts are not to be found in the best areas.
By the very nature of this forum we tend to be more focused on the expat/Costas market where the boom was greatest and where the falls will also be. By doing so we can forget that in the big cities, particularly Madrid and Barcelona, there is a very different market.
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@brianc_li wrote:
Prices are actually down “almost as much as the US or Ireland”
With the odd exception, this is simply not true. Asking prices are currently running around 25-30% lower than at the peak. This is what Tinsa reflects. In Ireland they have fallen – as has the market – by almost 50%.
Around the Torrevieja area prices are down around 40-55% depeding on area. That is if you factor in the haggling. Asking prices are irrelevant if you ask me.
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http://www.theolivepress.es/spain-news/2012/03 … rice-fall/
There’s an article discussing Spain’s biggest house price fall!
Then we hear today that UK APD (Air Passenger Duty) increases from today, though small increase for short haul flights but by 2016 will be increasing by almost 50% on today’s tax. This so called Green tax does not contribute to any Green measures, a total con by UK Gov’t but one that damages tourism and property purchase abroad 😡
None of which will help those (especially a family of 4 plus) wishing to buy property abroad especially holiday homes. 🙄
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@angie wrote:
This so called Green tax does not contribute to any Green measures, a total con by UK Gov’t but one that damages tourism and property purchase abroad 😡
None of which will help those (especially a family of 4 plus) wishing to buy property abroad especially holiday homes. 🙄
I’m afraid thats how green taxes work – they discourage unnecessary travel.
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I don’t like taxes but since airplane fuel has much lesser tax then normal fuel the airfare industry has actually benefitted a lot the last 20 years. If you want to tax things do it objectively and don’t let lobbying groups twist your arms. Travelling by train would actually become a much more viable option without this.
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Short haul air travel has to be rained back both on environmental grounds and fossil fuel shortages which are surely just around the corner.
Many coastal developments in Spain were created in the last decade alongside the boom in cheap air travel. If as is likely air travel returns to higher cost these developments will become obsolete for foreigners but will benefit the poorer Spanish who can then rent them cheaply long term. It’s already starting to happen as owners walk away from the increasing costs and banks repossess.
It’s an ill wind indeed that blows no one any good. 🙂 -
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Bigger falls to come according to this San Fran Chronicle article:
25% of home owners to be in negative equity is quite a scary figure.
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Negative equity of these levels is a tipping point. It will cause property values to fall off a cliff because people in that position are far better served just walking away and handing the property back to the bank. The debt is none recoverable.
I know that’s not such an easy thing to do in Spain but in fact it would in the long term serve the market well. Values could return to a more realistic pre boom level of the mid nineties and give the market chance to stablise.
Banks in this scenario would lose but they will eventually have to be recapitalized anyway if the government is serious about restarting the housing market. -
@peterhun wrote:
That the banks will now start writing off their losses (because they can afford to, more than individuals) is very significant. Up to 60% off.
Negative equity to rise from 8% in 2010 to 25% this year.
The prices will fall till 10-15K Euros will buy a decent apartment in less disarable areas and 50K will buy a decent apartment in some desirable area. Same as in USA.
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@logan wrote:
Negative equity of these levels is a tipping point. It will cause property values to fall off a cliff because people in that position are far better served just walking away and handing the property back to the bank. The debt is none recoverable.
I know that’s not such an easy thing to do in Spain but in fact it would in the long term serve the market well. Values .There are[plenty of romanians who bought during the boom, now lost the jobs and moving back to Romania and handing keys to the banks. Good luck following them and retrieving money form them. 😀
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As per this article on Seseña, we’ll see more sales carried out by the banks. It will mean cheaper prices for buyers (and the Seseña example shows there’ll be plenty around to take advantage in certain locations) but those who bought towards the peak of the boom can lose a lot, assuming they can manage to sell.
http://www.reuters.com/article/2012/04/02/us-spain-housing-idUSBRE83103P20120402
When Jose Morales travelled up from Granada in southern Spain in February to look at a new apartment in the Madrid satellite town of Sesena, he was greeted by long queues of mostly young people outside the sales office.
“When the door opened, there was a stampede to get in, like a department store sale, and some were even injured in the dash,” said Morales.
The apartments were selling so fast, unseen by the buyers in many cases, that he missed out on the one he wanted.
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@DBMarcos99 wrote:
hope the last post sticks, the forum appears to lose posts at the moment?
There was a server crash today. Should now all be working fine, which is more than can be said about the Spanish economy 😉
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When Jose Morales travelled up from Granada in southern Spain in February to look at a new apartment in the Madrid satellite town of Sesena, he was greeted by long queues of mostly young people outside the sales office.
“When the door opened, there was a stampede to get in, like a department store sale, and some were even injured in the dash,” said Morales.
The apartments were selling so fast, unseen by the buyers in many cases, that he missed out on the one he wanted
😆 😆 😆
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- The forum ‘Spanish Real Estate Chatter’ is closed to new topics and replies.
