- This topic has 16 replies, 9 voices, and was last updated 18 years, 1 month ago by
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I am Spanish and lived in Britain for five years (went to college there). My advice:
DON´T, DON´T, DON´T BUY PROPERTY IN SPAIN!!!
We got a huge housing bubble here and it is about to burst. If you want to invest in property go to Croacia (nice weather and people), Turkey or anywhere else.
There is a huge housing problem in my country and things are going to get very nasty in the next years. If you buy a property in Spain you will be losing money and I suppose you don´t fancy that do you?
By the way, I bought a nice massionete in Southampton in 1999 for 52000 pounds. The same kind of property here cost about four times the price and it is built with the crappiest materials in the Earth (the guys who build the houses in Spain only care about making money quickly).
Buy yourself a house in my beautiful country and you regret having done it in less than two years. Prices are going down for sure. It can not be otherwise in a country where the average salary is 600 pounds (monthly) and a one bedroom flat can go easily for 250000 pounds.
Take my advice and put your money somewhere else.
A nice Spanish man,
Iván.
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😯 Thank you for your very useful advice. I was about to invest in 51 two bedroom apartments in Tolox and after reading your extremely well researched comment I am shooting off to Croacia and Turkey to buy there. Do you have any contacts in particular? However, and before I catch a flight let me tell you that the average salary in Spain happens to be 22.000 euros per annum, slightly more than your figure. Secondly, I bet that at least 20 million Spanish property owners have a different opinion than you have and I can therefore give some more weight to their choice than to your comments, and finally and whilst I do not dislike Turkey nor Croacia I would rather stay here, in the Costa del Sol, where investment has not been bad at all for me.
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Well Ivan, that’s a real in depth view of the current market! I think though there are many other factors that should be taken into consoderation before leaping to such conclusions. Not least that in the Resort areas where I suspect the large majority of people on this board will buy, many are second homes. These are usually bought by the more affluent Europeans and many for the long term. Hence you might end up with a somewhat two tier price structure. Secondly interest rates are still incredibly low, a mortgage rate of 3.5% makes money incredibly cheap especially to Brits and other Northern Europeans. Thirdly Spain in one of the fastest growing economies in Europe and it’s only a matter of time before wages become on par with house prices. Especially with the current market conditions.
So whilst some correction might occur and it is a very heatlthy thing if it does. I think scarmongering generalisations such as this are perhaps not the best way of explaining the finer details of a county’s housing market!
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@Economist wrote:
in the Resort areas where I suspect the large majority of people on this board will buy, many are second homes. These are usually bought by the more affluent Europeans and many for the long term. Hence you might end up with a somewhat two tier price structure.
I think that you will find that many people have been buying second homes as an investment having bought into the argument that “you can’t lose with property”. I’ve heard tell that some people are actually buying off plan with the intention of selling before completion and if they are unable to sell they will not have the money to buy their off plan properties. So, maybe in the past only the affluent were buying property on the coast but I think that may have changed.
@Economist wrote:
Secondly interest rates are still incredibly low, a mortgage rate of 3.5% makes money incredibly cheap especially to Brits and other Northern Europeans.
So they can borrow more, which means that they are in it for the long term because the capital will not be inflated away like it was in the past. So, I hope that these people have secure employment for the next 25 years or however their mortgages last.
@Economist wrote:
Thirdly Spain in one of the fastest growing economies in Europe and it’s only a matter of time before wages become on par with house prices. Especially with the current market conditions.
Do you think that will continue when the EU grants are taken away? I think this economy is in for a shock. And how much of the other growth is due to the construction industry?
@Economist wrote:
So whilst some correction might occur and it is a very heatlthy thing if it does. I think scarmongering generalisations such as this are perhaps not the best way of explaining the finer details of a county’s housing market!
When there is a correction Spanish property will not be seen as a good investment and so “investors” will put their money elsewhere. We’ve seen in the UK in the early 90s and in Japan. Did you know that if you bought a 2 bed apartment in Tokyo today and rented out the spare room that the rent you received would cover your mortgage payment? Very interesting.
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@ivanmax wrote:
Buy yourself a house in my beautiful country and you regret having done it in less than two years. Prices are going down for sure. It can not be otherwise in a country where the average salary is 600 pounds (monthly) and a one bedroom flat can go easily for 250000 pounds.
The average salary is more like £1,000 monthly, and a one bedroom flat is normally £100,000. The only places you’ll find a one bed for £250,000 are the best parts of Madrid, Barcelona and Marbella.
What is this man gibbering about? I mean, I recognise that there is a discrepancy between pricing and wages – but why is he trying to paint it as three times worse than it is?
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Given the reactions here how do readers react to forestfire’s recent post “Risk of house price fall ‘increasing’ warns Bank of Spain” ? The governor reported property was over valued by 25-34%.
I take Mark’s point in his reply to forestfire about regional variations but surely the limited coastal regions where Brits are buying are more likely to have experienced the largest price increases in recent years and presumably are more at risk.
Mike Grant
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I find nothing in your comments to support a strong housing market and would side with Ivan – Once you have factored in the high level of taxes and agents fees, you would have to be some sort of financial genius to make a profit on a property in Spain over the next five, possibly even ten years.
I would like to respond directly to the “economists” points.
Firstly, affluence goes in cycles, rich people do not stay rich forever and what is more, the sort of people who are likely to stay rich in the long term are those that cut bad investments.Interest rates are historically low, but the euribor futures market predicts a rate of 4% by the summer. After that I can’t tell you -historical probabilities could suggest that we go back to more normal higher rates. We know that the level of personal debts is at all time highs which must mean that rates do not have to rise significantly before people start defaulting on their mortgages. Home repossession orders in the UK increased by 66% last year.
I would like to see evidence that Spain has impressive growth rates. If it does then I would imagine that growth is limited to just a few sectors.
But much more importantly, being one of the faster growing economies in Europe is hardly impressive. Growth in China & India is something to boast about, as perhaps is the way that the USA always outperforms Europe.
“it’s only a matter of time before wages become on par with house prices.”
Evidence please!I think that it is an insult to the intelligence the way that salemen always tell us that the market is due for a gentle correction. A price crash is just as likely a scenario, though obviously not one that the government or the estate agents or banks generally dare consider.
Having said that, the governor of the bank of Spain did say recently that Spanish property is 25-34% overpriced -now that’s SOME correction we have to look forward to.Also lets consider that the White Whales 1&2 have not been played out in full. (Remember in White Whale 1, the police seized E250m of assets, mostly houses, and they said that had touched the tip of the iceberg).
The CDS is awash with drug money (police are regularly seizing big quantities of drugs and the assets they buy) and there is Gibraltar just down the road to make the whole process easier for the crooks.
Politicians have been bought by either the mob or the housing developers, a case in point is the mayor of manilva who was recently arrested when E770k was found in plastic bags in his house. He had no explanation as to where the money came form.
Which leads me to the obvious question for the economist-
WHAT IS HEALTHY ABOUT THE PROPERTY MARKET IN SPAIN? -
Just two links that I have just seen
http://www.straitsnews.com/page.php?domain_name=straitsnews.com&viewpage=news
this link suggests that Ivan wasn’t far off in his estimates of spanish wages. EU average is 22k, Spain is well below that average according to the articlemore politicians on the take, they cannot help themselves…
http://www.surinenglish.com/noticias.php?Noticia=7727
It seems that Jesus Gil is still a role model.
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Well, well If it isn’t my old friend Ivanmax trying to guise himself once more as a Spaniard (which he ain’t). 🙄
This email happens to be identical to this other one from 29th September 2005 (post number 39):
http://www.housepricecrash.co.uk/forum/index.php?showtopic=6846&st=20
Which in turn I replied aggressively:
http://www.housepricecrash.co.uk/forum/index.php?showtopic=6846&st=40
Look Iván, Turkey has been hit with the bird flu so expect property prices to fall.
As for Croatia it’s promising but not as politically stable as Spain and on the long run I place my bets on Spain and the CDS.
If you want people to invest in Croatia or Turkey just say so, but don’t try to pass yourself as a fellow countryman which extremely annoys me. And btw try to at least change your email in all the different English-speaking property websites instead of just pasting this same email every now and then, please.
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According to todays sunday times all is not well with the Dubai property market. Even if there is a slow down in Spain it is still a good long term investment. Many even move from South Africa to Spain,Scandinavian countries etc. its still a good place to bring up your children, they aren’t just dependent on the UK market.
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Forestfire,
Fine, but all of your speculation is as relevant/irrelevant as mine. The truth of the matter is no body knows for sure.
I remember about 18 months ago it was all doom and gloom about the UK property market with similar 25-30% overpriced scenario, crash looming balh blah blah & we are still waiting for it!!
All I can say is that Spain is pretty special place and whilst I do agree that houseprices are overvalued, I think the likleyhood of a crash is unlikely. I have seen houseprices level out in Spain over the last 12 months and I think this trend will contiue until earnings/buyers have caught up with the market.
The main point I was trying to make though was that Ivanmax’s generalistic views are scaremongering and I would far rather a reasoned argument looking at all the factors than some nutcase spouting nonsense.
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@Drakan wrote:
Well, well If it isn’t my old friend Ivanmax trying to guise himself once more as a Spaniard (which he ain’t). 🙄
This email happens to be identical to this other one from 29th September 2005 (post number 39):
http://www.housepricecrash.co.uk/forum/index.php?showtopic=6846&st=20
Yes well said Drakan.
I think the usual terminology is ‘troll’.
MikeyP
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Shiller was speaking on cnbc this afternoon about the global housing bubble. He was one of the few that predicted the tech stock bubble in 2000. Below are a few links to interviews in which he explains his views. Something I imagine “The Economist” may be interested in reading.
One comment he made on tv was that those predicting a minor correction inevitably had vested interests.http://money.cnn.com/2005/01/25/real_estate/realestate_shiller2_0502/
http://www.msnbc.msn.com/id/6877691/site/newsweek/
http://www.econ.yale.edu/~shiller/ -
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