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http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/05/16/cnspain16.xml
Forget Euro zone interest rates, overbuilding, and all the illegal/scam problems effecting sentiment/prices on the Costa’s for the forseeable future . Spain has real structural problems with its economy. In my opinion a crash in Spanish property prices across the whole market is inevitable over the next few years. Obviously some properties will be effected worse than others but anyone who still thinks this is a blip is deluding themselves.
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@Pablo Silver or Lead? wrote:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/05/16/cnspain16.xml
Spain has real structural problems with its economy. In my opinion a crash in Spanish property prices across the whole market is inevitable over the next few years. Obviously some properties will be effected worse than others but anyone who still thinks this is a blip is deluding themselves.
A jaw dropping article
The Banco de España refused to comment on the sales, leaving it unclear why reserves have fallen so low, or where the money has gone.
So that is where the developers who have moved onto the next thing are working!! And still using the same customer care techniques
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Charlie This is what the article may be refering to?
http://news.bbc.co.uk/1/hi/business/6646865.stm
Its always preferable to of not had the investment growth (property price inflation and the debt associated with it), than to deal with the consequenses.
Once people have paper equity increases in their first property and borrow too much against it to buy another in the mistaken belief that prices don’t fall, and that drive property prices higher and higher from fundimentals, you have a recipe for disaster.
US Spain Ireland are all clasic bubbles. The Uk will not be immune, with the price escalations in the North (that didnt happen last time) and many streched BTL’s…. it’s only a matter of time.
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Charlie,
New law referred to is the ‘ley de suelo’, or land law, coming into force 1 July (I think). It forces promoters to dedicate 30% of land to social housing, and aims to clear up corruption by making land deals more transparent. Some say it will just cause more problems.
I have a lot of time for the author of the DT article – Ambrose Evans-Pritchard – I think he talks a lot of sense. I agree that there are some serious imbalances in the Spanish economy, and that there is likely to be some pain as they unwind, as they must do one day. But right now the economy is fizzing, with growth at 4%, unemployment is falling, and Spaniards are getting richer. I can’t see this changing overnight. It’s a confusing situation.
But one thing I will say…again. Even if there is a construction-lead recession in Spain this year or next year, good quality property in good locations will hold it’s value, and protect wealth in the long run. There are just too many Europeans keen to buy a nice pad in Spain, something that didn’t happen in Germany or Japan.
Mark
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mark said
There are just too many Europeans keen to buy a nice pad in Spain, something that didn’t happen in Germany or Japan.
…..i think there are also too many Europeans keen to sell up and get out of Spain at the moment, and unless Spain cleans up it’s act very quickly with regards to building more monstrosities that nobody wants and destroying the last of the pretty coast/inland areas, and not granting fast justice to decent people over crooks, then i can’t see Spain getting out of the hole it’s digging itself in to very soon? I’m sure reasonably priced developments in good locations will always sell, but what about the rest?
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😉
Couldn’t agree more Goodstich, I also believe that despite people still chasing the sun in Spain, there are probably as many trying to get out financially intact or even down, simply because of property corruption in Spain, serious overbuild and ruining of the landscape, their immigration and crime on the Costas, maybe tooooooo many Brits etc, lack of expedient legal recourse, Government turning a blind eye etc etc.
Probably a lot less corrupt in Germany and Japan for property, well we don’t constantly hear about it. More sun is Spain’s main card I think.
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Yes Katy, I am beginning to feel the Spain about going to Spain now.
For years it’s been my favourite place but with the way so many of us are being treated I highly resent contributing to their economy any further.
The authorities need to wake up & realise that some respect needs to be shown to those fighting for justice, & that they are among the millions of ‘foreigners’ who have contributed greatly to their ecomony. Once people start to leave and/or stay away, maybe only then will those in power have the will to exert justice in the proper way. 👿 👿
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Seems as though there will always be the “uninformed” to bolster the property market in Spain!!
No obvious change
Sur in EnglishA real estate exhibition held at the prestigious venue of the Grosvenor House hotel in Park Lane
Despite widespread media reports of a severe downturn in the prospects of the Spanish property market abroad, visitors to the International Property Show in London last weekend appeared undeterred. Indeed, at an exhibition featuring properties from many different countries, registration forms filled in at the entrance showed that Spain was top of the options, with more visitors interested in Spanish properties than any others. Some also commented to SUR in English staff that they had been encouraged by reports that prices were not expected to continue rising at the previously high annual figures, but none said they had been led to expect a crash.🙄
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Corruption aside for a moment, I believe I am like a lot of would-be buyers where the main criteria for a move to Spain is the environment/surroundings I would find myself living in, within the price I could afford. And now, looking at property websites, I can honestly say I cannot find anything that I would want to buy.
The over-development and rip off prices Katy mentions is now the biggest put-off for me. (I am stubborn enough to believe I would not be caught out by corruption a second-time around, so am not including that in any decision!).
The number of relatively-ordinary villas with mediocre views – a bit of sea and a lot of roof-tops that are well-over a million euros I find astounding, and even some that are several million I feel are just not worth the money.
Or am I just looking at the wrong websites?Unless one is happy to buy into the Spanish equivalent of a council estate, which I am not, for me Spain is looking more and more out of reach for the criteria I would want. A holiday home is one thing, but a permanent home to retire to, am beginning to think I have to forget it.
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@Claire wrote:
Seems as though there will always be the “uninformed” to bolster the property market in Spain!!
But the big difference now is the thousand of properties without LFOs that are not not being sold. Those who continue to buy off-plan may find themselves posting on here in the future trying to find someone who will tell them something!!
The ‘property market in Spain’ is in dire straits, & ‘uninformed’ buyers are just adding more nails to the coffin IMO, rather than ‘bolstering’ it.
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