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I predicted on here a few years ago that much of the unsalable properties along the coasts would be converted into social housing. Now it’s becoming a reality.
I think it’s a laudable project but it’s bound to impact the existing owners who bought at the top of the market.
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The Spanish government has declared for some time that it would use some of the million empty homes, mostly owned by them as the developers have gone bust, for social housing. It makes perfect sense.
I still wouldn’t like to be one of the owners who have bought property on such developments, and there are many of them. If Spanish property values have gone down by some 40% anyway, what value can you put on the houses owned by the poor people on that Murcia golf course one?
I doubt if it matters, who on earth would buy one there?
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Murcia is the smallest and poorest autonomous region in Spain. You really can’t blame the local mayors for granting planning permission for just about anything, even airports, in order to help their poverty stricken local people with jobs.
Thinking about apportioning blame for such disasters as the luxury golf development posted by Logan, I can’t think of blaming anyone. But buying such a property should carry a health warning for gullible foreign buyers.
But there is a health warning on cigarette packets nowadays, they scream Smoking Kills at the buyer, and still they buy them.
And if you like a game of golf and you’re sitting in the rain-sodden UK looking at pretty websites of golf courses in the sun, then you could find yourself playing golf in the sun, on a course surrounded by ugly, graffiti-covered flats, and abandoned shopping trolleys on the scorched ‘greens’.
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Yes anyone buying now in these complexes needs to be very aware of the risk. If you were to go there today and ask about property they would palm you off with some spiel and try to convince you it was a five star development.
Any investment made will be all but lost, community fees will likely put you in penury and your neighbours will very likely drive you to distraction.
Just Google Corvera Golf and see the glossy photographs and Olly Olazabal who designed the course and read the bull shit.
In the article the local Mayor states that the local schools are full up and the medical services are over stretched. A sudden of influx of 150 dependent families without incomes will do wonders for the local amenities. 🙁
So if this forum saves just one potential buyer from going there we will have achieved something.
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There is nothing anyone can do to stop the kind of person who even remotely considers buying a property on a ‘luxury’ golf resort in Murcia. You would have to shoot them to stop their foolishness.
I watched about a dozen people going in and out of a local estate agents earlier today. Judging from the way they were dressed they appeared to be Brits, and for their sake I hope that they were only browsing British holidaymakers.
The local papers reported an increase in tourists from last year of 20%, and they got more for their pound last year.
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From what I’ve seen on the Spanish coasts it appears the Brits are quite likely the most naive of prospective property seekers and all too often trust the spiel from their countrymen/women in estate agents. Not only having to contend with poor exchange rate at present, but forgetting the 10-11% completion costs, which, added to future selling costs, would mean the property would have to rise 16% or more to break even one day. Ok if it’s for long term lifestyle, but not good as a quick investment return. 🙄
People have short memories and despite this website there will always be unfortunate victims. 🙄
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@angie wrote:
From what I’ve seen on the Spanish coasts it appears the Brits are quite likely the most naive of prospective property seekers and all too often trust the spiel from their countrymen/women in estate agents. Not only having to contend with poor exchange rate at present, but forgetting the 10-11% completion costs, which, added to future selling costs, would mean the property would have to rise 16% or more to break even one day. Ok if it’s for long term lifestyle, but not good as a quick investment return. 🙄
People have short memories and despite this website there will always be unfortunate victims. 🙄
I agree. By way of an explanation I’m friendly with a local Spanish newsagent selling all sorts of international newspapers, but concentrating on his most regular customers, British expats.
He stocks only a few Telegraphs, Guardians and Times, but has stacks of Daily Mails which fly off the shelves.
I can feel myself getting into trouble for writing this, but how else can I put it? The people I see queuing up at the local estate agents are often clutching a copy of the Daily Mail.
They’re not going to bother with forums like this well-informed one, they’re not going to bother with the extra 12% on top of the purchase price; if you believe what’s written in the Daily Mail you’re just as likely to believe what some jumped up British estate agent tells you.
You can’t save people from themselves.
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@Rocker wrote:
The local papers reported an increase in tourists from last year of 20%, and they got more for their pound last year.
Got a link to that 😕 Despite all the hype last year about the increase in tourists nationally it was minus 2% last year. Sounds a big jump!
Can’t believe any avid Daily mail readers ever buying a spanish property. Saw their feature yesterday
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@logan wrote:
@Rocker wrote:
You can’t save people from themselves.
Perhaps not but you can at least try. That’s my reason for being on here. I think the forum does a job like no other.
Noble thoughts, Logan, and I’m not being facetious.
I’ve spent the last five years trying to put people off from buying in Spain at this time. But at the same time I’ve advocated people renting in Spain to enjoy a lifestyle far removed from the drudgery of the UK, a relaxed life in the sun among some of the most foreigner friendly people on earth.
Of course it’s a personal thing, France is your chosen place and good luck to you, it wouldn’t be right to mention Cyprus at this stage but it was a place I seriously considered too, and Florida, and San Diego on the west coast of the US, even Malta when I wasn’t thinking straight.
And Gibraltar, until one of the apes nicked my ice-cream.
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@katy wrote:
@Rocker wrote:
The local papers reported an increase in tourists from last year of 20%, and they got more for their pound last year.
Got a link to that 😕 Despite all the hype last year about the increase in tourists nationally it was minus 2% last year. Sounds a big jump!
Can’t believe any avid Daily mail readers ever buying a spanish property. Saw their feature yesterday
Sorry, Katy, I read about the 20% increase in either the Round Town News or the Euro Weekly, the paper editions, and I don’t know whether it’s online, I don’t google anything I’ve read on paper.
I’ve driven past those disgusting plastic sheets covering a lot of the Almeria countryside many times, and no expat in their right mind would buy a place anywhere near there, not even a Daily Mail reader.
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The trouble is, when everyone agrees, there is no meaningful discussion. You need conflict to take things forward.
But I can’t think of anything controversional. Katy, Angie and Logan are purring pussycats, Marcos is missing, the nasty Hun is probably being nasty in Warsaw, and Chopera is asleep.
Please God somebody proves me wrong and brings us back to life.
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Mark wrote a piece about this golf resort back in 2010. The British buyers were suing the developer alleging breach of contract.
I guess it’s still going through the courts knowing the speed of Spanish justice if there is such a thing.Any updates please Mark?
I’m told you can buy an apartment there now for €30k. Hardly surprising given this latest news.
This project in Corvera, Murcia is only the tip of an iceberg. Read this link which allows you to download a pdf file which lists all the social housing projects created from repossessed property currently available in Spain. This is a serious development for any prospective buyer investing in Spanish property. You cannot guarantee the development you buy into now will not become a future social council estate with all the negativity that brings.
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This week’s paper edition of the Costa Blanca News contains an article about the Camposol urbanisation in Murcia, where the builders of numerous illegal homes, the MASA group, were fined a million Euros for their illegal building.
That particular group and many others have been doing it for years, selling thousands of such illegal homes to unsuspecting foreign buyers. They would typically obtain building permits for a hundred homes and promptly build a thousand, without anyone in authority noticing.
Without anyone in authority noticing? Of course they noticed. But when you’re driving past all those nice new homes in your nice new Mercedes, perhaps you lose the ability to count.
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On the face of it I suppose in this economic depression turning property over to social housing is a solution of sorts. Solution for the poorest in society, not in my view for the developer.
If these tenants don’t have sufficent means of support how will they pay the €150 a month rent and utilities?
The next question is what sort of lease will they be given? Letting laws in Spain favour the tenant and they could find themselves unable to evict the tenants for at least seven years. Add to that the legal protection given to tenants where they do not pay community charges or council tax. The owner is responsible. There will also be individual legal costs to make the lease water tight. Then taxation issues because the rental income will be taxed at around 40% if it’s declared. An income of €22.500 monthly would attract the higher rate, although there may be tax concessions due to providing the homeless with housing.
I’m guessing the owner intends to pay the community overheads from the rental fees but to me this has all the hallmarks of another disaster waiting to happen. He already owes that community €600k 😯
I have personally investigated and considered the buy to let market in Spain and came to that conclusion, even with drastically reduced property. You just cannot make it work no matter which way it’s approached.
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http://www.eyeonspain.com/forums/posts-long-17871.aspx
Interesting. We were hoping to get 200 euros per month plus the bills paid on our flat to help us a bit… but now wonder whether it’s just best to keep it as a place my sister in law can occasionally go to study when she’s back from Uni.
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The Spanish property market crashed, dramatically, in 2007, a year before Lehman’s brought down the rest of the world.
It’s foolish to even think about investing in Spanish property, and it has been for the past six, long years. Those long six years have been littered with developers bankruptcies, littered with foreigners and Spanish nationals losing their homes, littered with people losing faith in Spanish banks.
An expat friend, a solid guy who has lived in Spain for many years, came up to me yesterday and confided that his home was being repossessed in a week’s time. His mortgage far exceeds the current value of his home.
He’s got no choice but to go home to an uncertain future, a home he left 30 years ago. He actually seemed quite happy about the prospect.
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An expat friend, a solid guy who has lived in Spain for many years, came up to me yesterday and confided that his home was being repossessed in a week’s time. His mortgage far exceeds the current value of his home.
He’s got no choice but to go home to an uncertain future, a home he left 30 years ago. He actually seemed quite happy about the prospect.
A mortgage that ‘far exceeds the current value’ of a home does not change the monthly payments. Unless there has been a change in your friend’s monthly income, or there is more to this story, your friend is being irresponsible.
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@GarySFBCN wrote:
An expat friend, a solid guy who has lived in Spain for many years, came up to me yesterday and confided that his home was being repossessed in a week’s time. His mortgage far exceeds the current value of his home.
He’s got no choice but to go home to an uncertain future, a home he left 30 years ago. He actually seemed quite happy about the prospect.
A mortgage that ‘far exceeds the current value’ of a home does not change the monthly payments. Unless there has been a change in your friend’s monthly income, or there is more to this story, your friend is being irresponsible.
I’m quite happy to elaborate on my friend’s circumstances in case it helps others. He bought a house around seven to eight years ago for 300K, put down 100K of his own money and borrowed 200K from a Spanish bank.
His business failed around two years ago and he stopped paying his mortgage, explaining that it was only throwing money down a black hole, the house’s value having fallen from the 300K he paid for it to around 150K.
His mortgage repayments were around 1,000 Euros a month, which he put into a safe UK account to stop the Spanish bank from getting it, and two years on he has some money left to set him up back in the UK.
If you live in dreamland, you would think that the guy was morally irreprehensible, you would sing the praises of the honest Spanish banks, fill in your modelo 720, and think that Hacienda was your friend.
I’m on my friend’s side.
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If you live in dreamland, you would think that the guy was morally irreprehensible, you would sing the praises of the honest Spanish banks, fill in your modelo 720, and think that Hacienda was your friend.
I have the gift of cerebral capacity that you seem to be lacking: I think that your friend is being irresponsible AND I think that most Spanish banks are reprehensible. Your friend signed a contract. Unless there was anything underhanded about the sale of the property, he is morally and legally wrong in breaking the contract and will eventually pay his due.
And while Spanish banks can be reprehensible, you wrote nothing to suggest they did anything wrong, other than to trust your friend.
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I’m with Gary on this one. Walking away from responsibility will not solve your friends problems. He still owes the original debt and will be liable for it wherever he goes. The banks will have the ability to take out a charging order on any UK assets if they so choose.
Your friend obviously had the financial ability to service his debt but decided to hide the money instead. Reprehensible in my view.
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Reality in life sometimes gets in the way of your dreams, unfortunately. The example I have quoted is replicated all over expat Spain, tens of thousands of people are caught in the trap of negative equity, far worse than anything that happened in previous recessions.
An organisation I belong to tries to help those people, we don’t lecture or condemn them, nor do we advise them to do anything illegal, we try and help them.
In most cases they will already have lost everything and their only recourse is a return to an uncertain future in the UK. In more heartbreaking cases they don’t even have the return fare, having paid their mortgages right up to the bitter end.
I’m not blaming Spanish banks, I’m not blaming anyone or anything, but I do object to silly people rattling on about a ‘breach of contract’ for the unfortunate victims of the greatest recession the world has known since the thirties.
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Rocker. The example of your friend squirreling away money he was morally obliged to pay to service his debts is not the same thing as the suffering of the people you try to help. There is a clear distinction.
I do agree so many people are suffering through no fault of their own. They are the deserving cases, your friend is not.
I have no axes to grind for Spanish banks they in my view share the burden of blame and so does the government. If a bank takes possession of a property there the debt should end.
However that’s not the legal case in Spain and your friend must know full well the consequences of his action.
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Have to say that in this case I agree with Logan and Gary. The example given was of someone choosing to divert his money from paying the mortgage in Spain, to an escape fund in the UK. In this case he should honour his contract – he borrowed the money on the understanding he’d pay it back. And who knows, maybe in 10 years time the value of the house will have increased back again – these things go in circles.
Totally different case to those who don’t have money at all to pay the mortgage. -
I acknowledge that each case is different and there is no shortage of crooked people in the world.
What we normally come across are ordinary people who have bought properties within the last six years and mortgaged them at around 70% of the purchase value. Those properties are now worth much less than they were six years ago and the people are stuck with serious negative equity.
There are various reasons why people can no longer pay their mortgages, losing a business or job is typical, illness often plays a part, and marriage break-ups are more common than ever nowadays.
We sit them down with a calculator and work out whether they can still pay their mortgages and have enough money left over for food. If possible, we advise them to try and renegotiate their loan deal with the banks.
Selling their property is seldom an option, the negative equity is simply too high.
When all else fails, we advise them on the various benefits they are entitled to back in the UK.
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From someone with experience of this I can say that I don’t agree with what your friend has done Rocker, but he’s a lucky guy to have been able to do it.
He should have paid SOMETHING to the bank each month, to try to pay back his debt. Stopping paying years ago is what too many people did and it’s caused so much damage to the rest of us. We pay our bank a minimum of 500 euros per month even if it means we eat toast and cereal so that our children get decent food to eat. I know another friend who does this. We are the ones who are strong!
I know that Spanish bankers are the lowest scum of the low….they haven’t an ounce of common sense. Renegotiating a mortgage just means a few years of cheaper payments before they’ll hit you with all the extras added on in a few years. We refuse to remortgage again….why would we lower ourselves into debt for a few less euros to pay each month?
BUT this guy and many others just run away and therefore the Spanish banks hit down harder on those who can’t run away, like my Spanish husband.
Helping expats is great, but helping them to run away just like all the ecudorians, morocans, africans and other immigrants whilst the Spanish are dumped in it for life isn’t right.
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@itsme wrote:
http://www.eyeonspain.com/forums/posts-long-17871.aspx
Interesting. We were hoping to get 200 euros per month plus the bills paid on our flat to help us a bit… but now wonder whether it’s just best to keep it as a place my sister in law can occasionally go to study when she’s back from Uni.
Thats probably illegal under EU law, not that Spain would care of course. Its an old law, has it been passed?
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Just in case I left the wrong impression, I understand that:
- * Banks can be dishonest,
- * Real estate agents and property owners can be dishonest, and
- * people’s ability to pay a mortgage can change.
If the situation with Rocker’s friend was the result of any of the above, while skipping-out on a mortgage is still illegal, it may or may not have been irresponsible.
But the situation as presented is that for years Rocker’s friend chose to stash the 1,000 euro monthly mortgage payment into a UK bank account, instead of paying his mortgage. And there is no indication that the bank did anything dishonest, that the property was misrepresented or that Rocker’s friend’s ability to pay the mortgage changed.
I am not a hard-line disciplinarian. But this situation highlights what is wrong with the financial world: Attitudes persist that it is always someone else’s responsibility to pay their bills, their due.
The other issue I have is that there seems to be a commonly-held view that the real estate market will never recover. While I know that there are issues that indicate that this problem is with us for the next few years, I have seen many economies sink into the toilet and then surprise everyone by recovering when nobody expected it.
I would be hard-pressed to walk-away from a 100k investment without waiting to see what is going to happen, especially since walking-away from the debt may be temporary and actually create a worse situation, having to pay the entire mortgage and losing the property.
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Therein lies the rub. Will the Spanish property market recover sufficiently to wipe out the negative equity of the mortgage holders who have bought in Spain since the crash six years ago?
I confess to not knowing the answer, but fervently hope that it will, though all the indicators over recent years have not been encouraging.
The Cyprus debacle has dampened my earlier optimism.I quoted one expat’s example and it seems to have caused some disagreement, I could have quoted many more and many times more harrowing.
My own knowledge is only of a tiny part of expat Spain where they have got together to help each other through difficult times. I can walk to three charity shops and two separate advice centres. The volunteers have never been so busy. Ten years ago the charity shops and advice centres didn’t even exist.
(Well, the locations existed, they were all bars).
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Gary makes some valid points and especially the question of will the economic crisis end or not.
The answer is of course it will one day. All crisis like most things in life have a beginning, a middle and and ending.The cautionary tale however is this crisis is in part of long standing because of the inabilities of countries like Spain to charter their own course through this turbulence. They are reliant on others and that is never a good place to be.
The Eurozone is an unknown quantity. It worked in the good times but in bad it has shown itself hopelessly inept in dealing with disaster.
I really feel that we could be facing years of the same situation constantly lurching from half baked solutions to total despair.
Until that is the entire edifice cracks and collapses.
Right now it looks as bleak as it ever has. Greece will need further financial aid very soon, Portugal is in trouble, Italy does not even have a government, Spain is tottering on the edge of collapse. Cyprus is a basket case having lost it’s means of earning a living. Slovenia’s banks are struggling and likely to need aid soon.
Going back to to the beginning, middle and end scenario. I think we are at the start of the middle bit or at the end of the beginning. The final ending is a very long way off.
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