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Someone once told me that good properties never lose value, which means that they never go down in price, but is this really true? A well built property in a great location may not necessarily guarantee that the property does not fall in value. One argument for prices of good properties not falling is that good properties in a good location are in relatively short supply and it is this shortage that will support the prices of such properties.
However, with the Spanish economy getting worse by the day it is inconcievable that even the best properties will not have their value adversely affected by the economic downturn. Properties costing over one million euros have almost certainly dropped in value by 50% since the boom and properties worth around half a million euros have dropped in price by 60% and those properties between 150,000 and 200,000 euros have dropped by 65% to 70% and for properties priced below 150,000 euros there is absolute carnage with drops of around 75% to 80%.
Property prices are driven by sentiment and right now sentiment about property is negative. I can see the day when a million euro property will end up being worth just 250,000 euros, a price drop of 75%.
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probably true. The trouble is too many people believe that they ‘have’ a million euro property just because the bank valued it at that price. Now they are finding that they are advertising at your 250k mark and still not finding buyers.
It’s a case that just proves that the bubble was so fake and we were 99% taken for a ride on the wave of the property boom.
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@itsme wrote:
probably true. The trouble is too many people believe that they ‘have’ a million euro property just because the bank valued it at that price. Now they are finding that they are advertising at your 250k mark and still not finding buyers.
It’s a case that just proves that the bubble was so fake and we were 99% taken for a ride on the wave of the property boom.
What is preventing house prices from falling even further is artifically very low interest rates of nearly zero percent. Low interest rates means that people who are struggling can still afford to keep up the mortgage payments on their Spanish properties even though the properties may have have lost 50% of their value. Just wait until interest rates start to rise, this will help to clear the mist and show in crystal clarity the housing market for what it is, with many people unable to cope with rising interest rates they will be forced to sell their Spanish properties resulting in an even greater supply of properties on sale.
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So tell me how we can sell our property then?
Three bedroom apartment in the historical part of town. Block of 20 flats, 8 Spanish owners, 4 who have not lived in their flats for ten years. The rest are bank repos or soon to be.
We have a 108k mortgage and my father in law, who is just retired with his own 70k mortgage to pay and has ill health, as a guarantor.
How do we sell our flat when the repos are advertised for 23k. We can’t be forced to sell our property as the bank wouldn’t let us have an enormous loan without the back up of the property. We can’t hand our keys back due to having the guarantor as they’d take our flat, bankrupt my husband for life and then take his Dad’s property and bankrupt him in his last years of life.
What do you suggest we, and many others like us, do then? How do you suggest we sell our property?
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@itsme wrote:
So tell me how we can sell our property then?
Three bedroom apartment in the historical part of town. Block of 20 flats, 8 Spanish owners, 4 who have not lived in their flats for ten years. The rest are bank repos or soon to be.
We have a 108k mortgage and my father in law, who is just retired with his own 70k mortgage to pay and has ill health, as a guarantor.
How do we sell our flat when the repos are advertised for 23k. We can’t be forced to sell our property as the bank wouldn’t let us have an enormous loan without the back up of the property. We can’t hand our keys back due to having the guarantor as they’d take our flat, bankrupt my husband for life and then take his Dad’s property and bankrupt him in his last years of life.
What do you suggest we, and many others like us, do then? How do you suggest we sell our property?
I genuinely feel sorry at your plight and I apologise if my postings seem to give the impression that I am deliberately trying to spread news of doom and gloom just so that I can buy a cheap property in Spain. All I am trying to do is give my own view of the Spanish housing market to give some balance to the debate about where the Spanish property market is heading based on my own experience and my understanding of economics and the way property markets work.
If you keep up with the mortgage payments then you should just try to enjoy living in the property, particularly as it is in a historical part of the town of Cuevas del Almanzora. So far it is only a paper loss that you have on your property unless you sell your property. Your property is well worth holding onto as long as you enjoy living in it regardless of what price the property is now worth.
There is no need to sell your property unless you cannot keep up your mortgage payments. I am really surprised that similar three bedroom flats that have been repossessed in your block are up for sale for just 23K, particularly as they consist of three bedrooms and are in a good location. 23K sounds way too cheap to me for a three bedroom apartment. Usually you would be lucky to find a rather dodgy studio flat for sale at that price but then again it is in a cave house so maybe that explains the price but paying 108k for an apartment in a cave house might have been a mistake in the first place because it was always going to be difficult to sell such a property in the future regardless of the state of the property market.
You need to ask several local estate agents at what price they would value your property at rather than relying on the repossession price of an adjacent property as a guide since the repossession price is bound to be lower than the price you can sell your property for at an estate agent.
Spain is a lovely country to live in and I would rather be there than in the UK. Many people say that they bought a property because they enjoy living in it and are not bothered what the property is worth. I know that it is easy to say but try to enjoy living in Spain and try to keep hold of your property and enjoy living in it…but a cave house…Jesus, even the dogs in the street know that you shouldn’t go anywhere near one of those, its a bit like buying a mobile home, they are valueless as well.
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Thanks for the comments. Bit confused about the in a cave house bit?? Cuevas del Almanzora is the town which does mean ‘caves’ but the apartment is a standard construction and not in a mountain at all. There are obviously caves in the town, some are really lovely actually (my father in law has one with ten rooms and I know where i’d be in this heat if we were over there). Have you been in a real cave house? They aren’t what you would probably expect. Some also do actually have deeds (as yes others are just the land they are on). I’ll have a look later to see if I can find some pictures of one as an example to show everyone.
Here is the town video: http://www.youtube.com/watch?v=GFwsFHqlRQ0
The 23k prices are what they are, nothing is selling and the bank repos are the cheapest things out there from what I can see.
We are not currently living in the flat, friends are popping in to keep an eye on it. There is no work so we can’t afford to sit around in Spain waiting for things to get better. We’ve made a positive move and are living with my Dad. It’s hard but we need to just ride this crisis out I guess.
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Here’s a video of some caves. http://youtu.be/1cry1zDxjlE
http://www.youtube.com/watch?v=1cry1zDxjlE&feature=relmfu
Anyone can check them out and all I would say is that I would trust one built by a Spaniard who is trustworthy in a mountain which is viable for a cave. Cuevas is called Cuevas because the mountains are made of the right material. Baza and other areas which are famous for caves are the same. You can’t just go into any old town and dig out a cave. It takes a special type of plaster as well. Those who dig out a cave when they don’t ask for professional advice are asking for trouble.
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