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According to a recent online survey of clients by the agent franchise network Look & Find (basically the domestic market).
What is the main reason Spaniards have for not buying a home now? 41pc say not knowing which way prices will go, 32pc say worried about personal financial situation, and 27pc say difficulty getting mortgage financing.
So the biggest reason is worry that prices will drop more. When prices stabilise, that worry will start to recede. I think that will happen in the next year or so.
In answer to the question “Is now a good time to buy?” 47pc say yes and 42pc say no.
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There is another reason in the domestic market. Spaniards who are still doing ok. and want to move up cannot sell their own house. A Spanish friends Son is in this position. They bought a 2/2 when they got married, now have 2 young children and need more space. They have money in place from bank of Dad to move up but need the equity in their own home. There must be a lot in this position.
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@mark wrote:
According to a recent online survey of clients by the agent franchise network Look & Find (basically the domestic market).
What is the main reason Spaniards have for not buying a home now? 41pc say not knowing which way prices will go, 32pc say worried about personal financial situation, and 27pc say difficulty getting mortgage financing.
So the biggest reason is worry that prices will drop more. When prices stabilise, that worry will start to recede. I think that will happen in the next year or so.
In answer to the question “Is now a good time to buy?” 47pc say yes and 42pc say no.
How do people know when the market has stabilised? Maybe it already has? (although I doubt it) If the Spanish land registry won’t publish transaction prices then this situation is just going to drag on.
Personally I think the fiscal changes that occured at the end of last year (the end of 4% VAT window and end of the tax rebate) have yet to be priced in. Those changes alone should have knocked about 15% off asking prices, and on top of that the underlying trend is still downwards, so I’d guess it’ll take a couple of years for that to be reflected in lower asking prices.
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“How do people know when the market has stabilised? “
Million $ question. In my opinion when people stop talking about the prices & the confidence returning. Lack of mortgage etc will remain with us for years to come.
I am perhaps not surprised that people did not mention the Hacienda’s historic valuation for taxes.
When one is struggling to sell, raise money from the Bank every € counts. Only to be hit with thousands at a later date when cash flow would be extremely tight is not a position to entertain.
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“How do people know when the market has stabilised? “
Million $ question. In my opinion when people stop talking about the prices & the confidence returning. Lack of mortgage etc will remain with us for years to come.
I am perhaps not surprised that people did not mention the Hacienda’s historic valuation for taxes.
When one is struggling to sell, raise money from the Bank every € counts. Only to be hit with thousands at a later date when cash flow would be extremely tight is not a position to entertain.
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This being a Spanish property forum, most commentators are remarkably well informed about their topic, but I wonder if ordinary punters coming to Spain with a view to buying a property are aware of even the basics, e.g. the last five years’ fall in prices?
I watched one such couple only a few hours earlier today. They were waiting in a cafe for a right dodgy English estate agent to pick them up and show them one of his dodgy places.
The couple had a free English expat newspaper on their table and I could see the headlines from a few tables away. Had they read the headlines and a few more articles inside, they might well have turned the conman away, but when he arrived in his flash Mercedes they climbed in.
Like lambs to the slaughter.
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This being a Spanish property forum, most commentators are remarkably well informed about their topic, but I wonder if ordinary punters coming to Spain with a view to buying a property are aware of even the basics, e.g. the last five years’ fall in prices?
I watched one such couple only a few hours earlier today. They were waiting in a cafe for a right dodgy English estate agent to pick them up and show them one of his dodgy places.
The couple had a free English expat newspaper on their table and I could see the headlines from a few tables away. Had they read the headlines and a few more articles inside, they might well have turned the conman away, but when he arrived in his flash Mercedes they climbed in.
Like lambs to the slaughter.
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We have also seen exactly as you describe Rocker, on the CDS, and in the last few years despite warnings on forums like this. It’s incredible that Brits still get taken in by other Brits like this, we once warned a couple sitting at the next table to us at lunch when British husband and wife agents were telling them only what they wanted to hear. Naturally the agents were very unhappy, but the prospective buyers thanked us before getting back into the agents’ car, not sure what the outcome would be in that case 🙄
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We have also seen exactly as you describe Rocker, on the CDS, and in the last few years despite warnings on forums like this. It’s incredible that Brits still get taken in by other Brits like this, we once warned a couple sitting at the next table to us at lunch when British husband and wife agents were telling them only what they wanted to hear. Naturally the agents were very unhappy, but the prospective buyers thanked us before getting back into the agents’ car, not sure what the outcome would be in that case 🙄
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It’s not widely known how much transaction prices (not asking prices) have actually fallen.
In San Cugat, a respectable residential area near Barcelona, prices are down more than 60pc, based on the figures from a trustworthy estate agent (they do exist). It’ll be the same story all over Spain, but you are unlikely to read about it in the press.
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It’s not widely known how much transaction prices (not asking prices) have actually fallen.
In San Cugat, a respectable residential area near Barcelona, prices are down more than 60pc, based on the figures from a trustworthy estate agent (they do exist). It’ll be the same story all over Spain, but you are unlikely to read about it in the press.
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@mark wrote:
It’s not widely known how much transaction prices (not asking prices) have actually fallen.
In San Cugat, a respectable residential area near Barcelona, prices are down more than 60pc, based on the figures from a trustworthy estate agent (they do exist). It’ll be the same story all over Spain, but you are unlikely to read about it in the press.
Even if you could read about it in the press, will it ever filter through to the hordes arriving in Spain to escape the things they want to escape from back home?
To confine myself to the Brits, I should say British prospective expats, sorry, they want to escape the atrocious weather, horrible foreigners blighting their lives, a useless government with an even more useless Chancellor who has totally lost the plot with his misunderstanding of basic economics.
You show those people a house in the sun, with the beach just down the road, flamenco music ringing in their ears, and they’ll buy it.
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@mark wrote:
It’s not widely known how much transaction prices (not asking prices) have actually fallen.
In San Cugat, a respectable residential area near Barcelona, prices are down more than 60pc, based on the figures from a trustworthy estate agent (they do exist). It’ll be the same story all over Spain, but you are unlikely to read about it in the press.
Even if you could read about it in the press, will it ever filter through to the hordes arriving in Spain to escape the things they want to escape from back home?
To confine myself to the Brits, I should say British prospective expats, sorry, they want to escape the atrocious weather, horrible foreigners blighting their lives, a useless government with an even more useless Chancellor who has totally lost the plot with his misunderstanding of basic economics.
You show those people a house in the sun, with the beach just down the road, flamenco music ringing in their ears, and they’ll buy it.
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‘Escape’ only lasts for a short while. You can only sit under the sun sipping gin and tonic for so long before boredom and tedium become the norm which in turn creates discontent.
The human condition requires challenge, difficulties and struggle. Without it we become alienated, restless and unhappy.
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‘Escape’ only lasts for a short while. You can only sit under the sun sipping gin and tonic for so long before boredom and tedium become the norm which in turn creates discontent.
The human condition requires challenge, difficulties and struggle. Without it we become alienated, restless and unhappy.
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While it’s true you can’t escape from yourself, we’ve always tried, even since long before the Mayflower ventured across the Atlantic to colonise a people who had never heard of Jesus Christ.
Most expats are dreamers, still looking for Eldorado, despite mounting evidence that their property venture in Spain will probably lead to disaster. They buy houses, pubs, Quick Saves, or find themselves in a crumbling desert apartment where they forgot to build the promised golf course.
I disagree with comments about the irrelevance of the weather, a lot of people I know have come for the abundant sunshine and do not want to wake up to the grey skies back home. As far getting bored in Spain, that only applies to hermits, and they will be bored anywhere.
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While it’s true you can’t escape from yourself, we’ve always tried, even since long before the Mayflower ventured across the Atlantic to colonise a people who had never heard of Jesus Christ.
Most expats are dreamers, still looking for Eldorado, despite mounting evidence that their property venture in Spain will probably lead to disaster. They buy houses, pubs, Quick Saves, or find themselves in a crumbling desert apartment where they forgot to build the promised golf course.
I disagree with comments about the irrelevance of the weather, a lot of people I know have come for the abundant sunshine and do not want to wake up to the grey skies back home. As far getting bored in Spain, that only applies to hermits, and they will be bored anywhere.
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@Rocker wrote:
@mark wrote:
It’s not widely known how much transaction prices (not asking prices) have actually fallen.
In San Cugat, a respectable residential area near Barcelona, prices are down more than 60pc, based on the figures from a trustworthy estate agent (they do exist). It’ll be the same story all over Spain, but you are unlikely to read about it in the press.
Even if you could read about it in the press, will it ever filter through to the hordes arriving in Spain to escape the things they want to escape from back home?
To confine myself to the Brits, I should say British prospective expats, sorry, they want to escape the atrocious weather, horrible foreigners blighting their lives, a useless government with an even more useless Chancellor who has totally lost the plot with his misunderstanding of basic economics.
You show those people a house in the sun, with the beach just down the road, flamenco music ringing in their ears, and they’ll buy it.
Actually, the point that house prices have fallen, is an attraction for many…”What, I can buy a 4 bedroomed place, with pool, for a third of what my London abode costs??”
You have to stress the extra costs they will end up paying.
Also point out that renting is also very cheap in Spain, so no need for them to buy a place – take their time and look around… -
@Rocker wrote:
@mark wrote:
It’s not widely known how much transaction prices (not asking prices) have actually fallen.
In San Cugat, a respectable residential area near Barcelona, prices are down more than 60pc, based on the figures from a trustworthy estate agent (they do exist). It’ll be the same story all over Spain, but you are unlikely to read about it in the press.
Even if you could read about it in the press, will it ever filter through to the hordes arriving in Spain to escape the things they want to escape from back home?
To confine myself to the Brits, I should say British prospective expats, sorry, they want to escape the atrocious weather, horrible foreigners blighting their lives, a useless government with an even more useless Chancellor who has totally lost the plot with his misunderstanding of basic economics.
You show those people a house in the sun, with the beach just down the road, flamenco music ringing in their ears, and they’ll buy it.
Actually, the point that house prices have fallen, is an attraction for many…”What, I can buy a 4 bedroomed place, with pool, for a third of what my London abode costs??”
You have to stress the extra costs they will end up paying.
Also point out that renting is also very cheap in Spain, so no need for them to buy a place – take their time and look around… -
Marketing executives the world over have long realised if you plant a perception in peoples minds, especially the young the myth will be carried through to their products profit.
Spanish property and happy Californians all fit into that. Living in Spain or California come to that will not make you any happier than living anywhere else if you have good health, sound personal incomes and good family relationships.
Spain works for some such as Mr Rocker but so does living in Scunthorpe, Demoins Idaho or SW France for others.
Sometimes we forget that property everywhere is an essential like food. Spanish people who live and work in Spain need somewhere to live. It’s not a lifestyle choice for them. For foreigners it is and that fact creates two distinct demand markets.
Often we get confused with financial details which apply to one market and not the other.
So if half the Spanish population are reluctant to buy a property because of their belief prices will soon fall further we should take note. Foreigners on the other hand will buy now because they are convinced doing it will make them happier.
Take note of the former and ignore the latter.
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Marketing executives the world over have long realised if you plant a perception in peoples minds, especially the young the myth will be carried through to their products profit.
Spanish property and happy Californians all fit into that. Living in Spain or California come to that will not make you any happier than living anywhere else if you have good health, sound personal incomes and good family relationships.
Spain works for some such as Mr Rocker but so does living in Scunthorpe, Demoins Idaho or SW France for others.
Sometimes we forget that property everywhere is an essential like food. Spanish people who live and work in Spain need somewhere to live. It’s not a lifestyle choice for them. For foreigners it is and that fact creates two distinct demand markets.
Often we get confused with financial details which apply to one market and not the other.
So if half the Spanish population are reluctant to buy a property because of their belief prices will soon fall further we should take note. Foreigners on the other hand will buy now because they are convinced doing it will make them happier.
Take note of the former and ignore the latter.
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Hot weather if great but when it gets to July and August and there is shopping/gardening/cleaning to be done the heat gets you down. Many stay indoors with the A/C on. Our neighbours young children were sent to play in the basement so it’s not all perfect. My favourite months in Spain were June and September. someitmes Oct although can be very rainy too. Many Brits seem to have the impression that Spain has wall to wall sunshine.
As for bargains, I haven’t seen many close to where we lived. Unless you live on the spot it is hard to recognise the bottom or upturn. Best to choose your location first, then rent for a while. I know someone who looked for ages. Started on the CDS, then Almeria, finally bought the cheapest they could find in Murcia. They thought they had a bargain but they hate it now. Better a small place in the location you knoiw and like than a mansion in some one hick pueblo.
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Hot weather if great but when it gets to July and August and there is shopping/gardening/cleaning to be done the heat gets you down. Many stay indoors with the A/C on. Our neighbours young children were sent to play in the basement so it’s not all perfect. My favourite months in Spain were June and September. someitmes Oct although can be very rainy too. Many Brits seem to have the impression that Spain has wall to wall sunshine.
As for bargains, I haven’t seen many close to where we lived. Unless you live on the spot it is hard to recognise the bottom or upturn. Best to choose your location first, then rent for a while. I know someone who looked for ages. Started on the CDS, then Almeria, finally bought the cheapest they could find in Murcia. They thought they had a bargain but they hate it now. Better a small place in the location you knoiw and like than a mansion in some one hick pueblo.
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You all are missing a key issue, for us Americans – even those of us who are Californians: Life is at a slower pace and people value people in other parts of the world, including Spain.
I know that the self-perception of stress is relative, but there is no comparing what we put ourselves through in the US compared to Spain. It is almost toxic here.
The only exception to this is our state of Hawai’i where life is slower. Interestingly enough, Hawai’i may also be another part-time home for me.
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You all are missing a key issue, for us Americans – even those of us who are Californians: Life is at a slower pace and people value people in other parts of the world, including Spain.
I know that the self-perception of stress is relative, but there is no comparing what we put ourselves through in the US compared to Spain. It is almost toxic here.
The only exception to this is our state of Hawai’i where life is slower. Interestingly enough, Hawai’i may also be another part-time home for me.
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Gary’s comment is interesting and I understand it having spent some time in the USA.
However it’s about perception. If you work in Spain, France or anywhere else the stress is the same. If you come to Spain and relax on holiday you should not fall into the trap that working life is any different from where you live. It’s most definitely not. Especially in these difficult times and people are desperately trying to hold on to their jobs.
That desperation is evident in everyone I speak with these days. The benefit is a better more efficient service but I’m aware of the strains.
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Gary’s comment is interesting and I understand it having spent some time in the USA.
However it’s about perception. If you work in Spain, France or anywhere else the stress is the same. If you come to Spain and relax on holiday you should not fall into the trap that working life is any different from where you live. It’s most definitely not. Especially in these difficult times and people are desperately trying to hold on to their jobs.
That desperation is evident in everyone I speak with these days. The benefit is a better more efficient service but I’m aware of the strains.
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When comparing happiness or miserabliness in different parts of the world it does not surprise me that there is little difference taken on an individual basis. A non-travelling Californian will have the same levels as a non-travelling Texan; or a native of Scunthorpe who doesn’t travel much outside his own town.
Where it makes a difference is where people have moved around to sample other places, and the UK expat who is able to live in Spain in a suitable area, whether working, or in business, or simply retired but still active can find a better life in the sun. A million such people are unlikely to be wrong, the numbers are too high for that.
The added bonus for sensible expats who have left the door to their homeland open, is the freedom to return home if the Spanish government imposes measures to tax them to the hilt or take money out of their bank accounts whenever they wish. Or a few other things I could mention, but it’s a sunny evening in Spain and I’d rather think happy thoughts.
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When comparing happiness or miserabliness in different parts of the world it does not surprise me that there is little difference taken on an individual basis. A non-travelling Californian will have the same levels as a non-travelling Texan; or a native of Scunthorpe who doesn’t travel much outside his own town.
Where it makes a difference is where people have moved around to sample other places, and the UK expat who is able to live in Spain in a suitable area, whether working, or in business, or simply retired but still active can find a better life in the sun. A million such people are unlikely to be wrong, the numbers are too high for that.
The added bonus for sensible expats who have left the door to their homeland open, is the freedom to return home if the Spanish government imposes measures to tax them to the hilt or take money out of their bank accounts whenever they wish. Or a few other things I could mention, but it’s a sunny evening in Spain and I’d rather think happy thoughts.
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As this is my first post here, good afternoon everyone…!
As to the question posted in the title of this thread, I agree that there are many possible answers, depending on the situation of the prospective buyer, and their reason for buying. However, even to someone like me, who has no direct experience in the Spanish property market, it has become apparent that agents are generally talking up prices, even though they are clearly still falling in lots of areas. I think that UK buyers are finally realising this, and are starting to be more careful about parting with money.
Certainly in my situation, I am in no great hurry to buy, as I doubt that the market in Southern Spain has bottomed out yet, particularly because there are so many empty properties available. However, I have very different reasons for buying than most other people, and also different requirements.
D
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As this is my first post here, good afternoon everyone…!
As to the question posted in the title of this thread, I agree that there are many possible answers, depending on the situation of the prospective buyer, and their reason for buying. However, even to someone like me, who has no direct experience in the Spanish property market, it has become apparent that agents are generally talking up prices, even though they are clearly still falling in lots of areas. I think that UK buyers are finally realising this, and are starting to be more careful about parting with money.
Certainly in my situation, I am in no great hurry to buy, as I doubt that the market in Southern Spain has bottomed out yet, particularly because there are so many empty properties available. However, I have very different reasons for buying than most other people, and also different requirements.
D
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Gary’s comment is interesting and I understand it having spent some time in the USA.
However it’s about perception.
Allow me to respond with a rant, not directed AT you, Logan. And first let me say that based upon many aspects, I still find the US to be the greatest country in the world, but mostly by luck.
Anyway Logan, what you wrote is not exactly true. In the US, having 2 weeks of paid vacation is the standard. In most of Europe, it is at least 1 month. Then there is the workday and workweek. I have worked in small companies, large companies and government. They all expected much more than 8 hour workdays.
Our worklife has become so entwined with our ‘real life’ that the first question people ask when meeting for the first time is ‘what do you do? ‘, meaning for work, as if that is what defines most people.
Then there is the nasty bit about healthcare and retirement. You all don’t have to evaluate insurance plans EACH YEAR (called ‘open enrollment’) like we do to see if you need to jump to another healthcare insurance company. Because if you don’t and the plan has changed, you may find out that a vital prescription that is partially covered by your insurance is not covered at all in the following year on the same policy. This evaluation is a waste of time, motivated by the insurance companies’ need to confuse ‘the consumer’ and geared to create more profits for the companies.
Retirement – our ‘social security’ is under constant attack from Republicans. It is a solvent system that doesn’t add to our national debt. About every 10-20 years it needs to be slightly modified but because Wall Street would profit from having people gamble-away their retirement in the stock market, they are funding politicians to kill or maim social security in preference to 401k plans, letting ‘people control their own money’, which will be a disaster for most, because they will listen to the ‘experts’. I suppose that it really doesn’t matter because most Americans are their own enemies, not saving anything for retirement but making sure they have the latest pair of $200 tennis shoes. After the World Trade Center was destroyed, our President Bush told people that they could help by going shopping. They actually printed shopping bags with the American flag because it was the patriotic thing to do.
Then there is our media. If you’ve ever seen a news broadcast in the US, you know that they employ ‘scare tactics’. Even the most benign news story is presented as an epic disaster, scaring the crap out of people. Combined with our national ignorance of geography (the latest being confusing the Czech Republic with Chechnya) it can be even dangerous. It is one reason that people buy guns, because they are manipulated into being afraid of everything, including their own shadows.
Back to my point: The level of uncertainty over health care, retirement, the lack of time off from work, the fear of being accidently shot by some idiot, the constant threats from Iran and North Korea all work to create a very stress-out population. And most of this stress is due to macro-level manipulation, in order for someone to increase profits or to increase their power.
Americans are so stressed and the system is so rigged that pretty so we will be a two class society.
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Gary’s comment is interesting and I understand it having spent some time in the USA.
However it’s about perception.
Allow me to respond with a rant, not directed AT you, Logan. And first let me say that based upon many aspects, I still find the US to be the greatest country in the world, but mostly by luck.
Anyway Logan, what you wrote is not exactly true. In the US, having 2 weeks of paid vacation is the standard. In most of Europe, it is at least 1 month. Then there is the workday and workweek. I have worked in small companies, large companies and government. They all expected much more than 8 hour workdays.
Our worklife has become so entwined with our ‘real life’ that the first question people ask when meeting for the first time is ‘what do you do? ‘, meaning for work, as if that is what defines most people.
Then there is the nasty bit about healthcare and retirement. You all don’t have to evaluate insurance plans EACH YEAR (called ‘open enrollment’) like we do to see if you need to jump to another healthcare insurance company. Because if you don’t and the plan has changed, you may find out that a vital prescription that is partially covered by your insurance is not covered at all in the following year on the same policy. This evaluation is a waste of time, motivated by the insurance companies’ need to confuse ‘the consumer’ and geared to create more profits for the companies.
Retirement – our ‘social security’ is under constant attack from Republicans. It is a solvent system that doesn’t add to our national debt. About every 10-20 years it needs to be slightly modified but because Wall Street would profit from having people gamble-away their retirement in the stock market, they are funding politicians to kill or maim social security in preference to 401k plans, letting ‘people control their own money’, which will be a disaster for most, because they will listen to the ‘experts’. I suppose that it really doesn’t matter because most Americans are their own enemies, not saving anything for retirement but making sure they have the latest pair of $200 tennis shoes. After the World Trade Center was destroyed, our President Bush told people that they could help by going shopping. They actually printed shopping bags with the American flag because it was the patriotic thing to do.
Then there is our media. If you’ve ever seen a news broadcast in the US, you know that they employ ‘scare tactics’. Even the most benign news story is presented as an epic disaster, scaring the crap out of people. Combined with our national ignorance of geography (the latest being confusing the Czech Republic with Chechnya) it can be even dangerous. It is one reason that people buy guns, because they are manipulated into being afraid of everything, including their own shadows.
Back to my point: The level of uncertainty over health care, retirement, the lack of time off from work, the fear of being accidently shot by some idiot, the constant threats from Iran and North Korea all work to create a very stress-out population. And most of this stress is due to macro-level manipulation, in order for someone to increase profits or to increase their power.
Americans are so stressed and the system is so rigged that pretty so we will be a two class society.
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I agree with most of what you say Gary but one thing I have high doubts about is the “social security” one. Isn’t your system basicly built on the foundation on that the population will be at constant growth like most other countries? I don’t see a pay as you go system to actually work in the long run since it will be overused by one generation and then suddenly the next generation will have far less and still pay for the ones actually being retired still for a bunch of years. It’s not a fair system in my eyes.
But I agree that Wall street have had a lot of buttons pressed to force people into investing in the stock markets. They revamped our pension system over here in that way but now you can at least see that it won’t become a bigger drain on the rest in the long run.
Most americans that has moved to Sweden “ain’t a lot of them I know” do it mainly because of marriage to a swede but they really seem to enjoy it here. They seem to have it really easy to compete on the job market and the ones that don’t just start their own business and do fairly well in whatever field they get into. You guys just seem to have a much better relationship to society and don’t just expect everything handed to you on a silverplate. If thats what your stress has caused you we might actually need a dose of it in europe too since we will just loose out to the chinese otherwise. They seem to complain less about our taxes than what we ourselves do. To raise a family I can see why one might like our system but for the rest it’s meeh.
I have a kind of love hate relationship to the US. Love it for the most parts and that also goes for most americans but I have big problems with your government which in my eyes is just getting worse and worse for every year that goes by.
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I agree with most of what you say Gary but one thing I have high doubts about is the “social security” one. Isn’t your system basicly built on the foundation on that the population will be at constant growth like most other countries? I don’t see a pay as you go system to actually work in the long run since it will be overused by one generation and then suddenly the next generation will have far less and still pay for the ones actually being retired still for a bunch of years. It’s not a fair system in my eyes.
But I agree that Wall street have had a lot of buttons pressed to force people into investing in the stock markets. They revamped our pension system over here in that way but now you can at least see that it won’t become a bigger drain on the rest in the long run.
Most americans that has moved to Sweden “ain’t a lot of them I know” do it mainly because of marriage to a swede but they really seem to enjoy it here. They seem to have it really easy to compete on the job market and the ones that don’t just start their own business and do fairly well in whatever field they get into. You guys just seem to have a much better relationship to society and don’t just expect everything handed to you on a silverplate. If thats what your stress has caused you we might actually need a dose of it in europe too since we will just loose out to the chinese otherwise. They seem to complain less about our taxes than what we ourselves do. To raise a family I can see why one might like our system but for the rest it’s meeh.
I have a kind of love hate relationship to the US. Love it for the most parts and that also goes for most americans but I have big problems with your government which in my eyes is just getting worse and worse for every year that goes by.
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I agree with most of what you say Gary but one thing I have high doubts about is the “social security” one. Isn’t your system basicly built on the foundation on that the population will be at constant growth like most other countries? I don’t see a pay as you go system to actually work in the long run since it will be overused by one generation and then suddenly the next generation will have far less and still pay for the ones actually being retired still for a bunch of years. It’s not a fair system in my eyes.
It is a very fair system. As I wrote, every 10-20 years it needs to be adjusted. If no adjustments are made, there is enough funds to pay 100% of the promised “pension” until 2035, and then there is still enough to pay 75% for about a hundred years after that. But with a few minor changes, it will be 100% funded for more than 60 years. What is a minor change? Right now, everyone pay a Social Security tax on their first $113,000 of income and NO Social Security taxes after that amount! Raising this ‘cap’ to $150,000 will fix the 2035 shortfall. Better yet would be to get rid of the cap altogether. Another fix is to allow the Social Security Administration to invest the funds, instead of allowing the government to borrow it free of interest. But that would cause the US government to fall, so I guess that isn’t really an option.
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I agree with most of what you say Gary but one thing I have high doubts about is the “social security” one. Isn’t your system basicly built on the foundation on that the population will be at constant growth like most other countries? I don’t see a pay as you go system to actually work in the long run since it will be overused by one generation and then suddenly the next generation will have far less and still pay for the ones actually being retired still for a bunch of years. It’s not a fair system in my eyes.
It is a very fair system. As I wrote, every 10-20 years it needs to be adjusted. If no adjustments are made, there is enough funds to pay 100% of the promised “pension” until 2035, and then there is still enough to pay 75% for about a hundred years after that. But with a few minor changes, it will be 100% funded for more than 60 years. What is a minor change? Right now, everyone pay a Social Security tax on their first $113,000 of income and NO Social Security taxes after that amount! Raising this ‘cap’ to $150,000 will fix the 2035 shortfall. Better yet would be to get rid of the cap altogether. Another fix is to allow the Social Security Administration to invest the funds, instead of allowing the government to borrow it free of interest. But that would cause the US government to fall, so I guess that isn’t really an option.
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Europe needs less socialism and more Americana, the better bits of course such as self reliance and the work ethic. The healthcare systems of Spain and France are draining the countries resources.
Welfare spending particularly in UK and France is out of control. Millions of people have grown up with the idea they actually have a choice either to work or allow the state to keep them and their families. In France living on substantial welfare is considered a right and many choose it as a preference.
I agree Europeans suffer less from paranoia from world events than Americans. Largely because they travel more in the world, suffered two world wars and understand human behaviour a little better through a broader education. European societies are not a wash with guns as a means of self defence in the same way as America.
In the recent Boston bombing and shootings I was struck by the way people came out on the streets celebrating their capture.
Almost as a collective demonstration of relief. That would never happen in Europe. We would shrug our shoulders and get on with life. In my view that incident reflects how grown up we are in comparison to America. -
Europe needs less socialism and more Americana, the better bits of course such as self reliance and the work ethic. The healthcare systems of Spain and France are draining the countries resources.
Welfare spending particularly in UK and France is out of control. Millions of people have grown up with the idea they actually have a choice either to work or allow the state to keep them and their families. In France living on substantial welfare is considered a right and many choose it as a preference.
I agree Europeans suffer less from paranoia from world events than Americans. Largely because they travel more in the world, suffered two world wars and understand human behaviour a little better through a broader education. European societies are not a wash with guns as a means of self defence in the same way as America.
In the recent Boston bombing and shootings I was struck by the way people came out on the streets celebrating their capture.
Almost as a collective demonstration of relief. That would never happen in Europe. We would shrug our shoulders and get on with life. In my view that incident reflects how grown up we are in comparison to America. -
Conservatism right, Socialism wrong; Tax cuts for the rich, austerity for the poor; if it were only that simple.
Democracy gets in the way of such thinking, perhaps a way should be found to confine voters rights to their social position, their status in society, their level of education, or even their sex?
Why should the beer-bellied benefit cheat in Barnsley have the same voting rights as the blue-rinse lady in Surrey? Who started all this benefit nonsense in the first place? Was it a guy called Bevan in the forties?
There’s even talk about abolishing the House of Lords, even whispers about our Monarchy; democracy has a lot to answer for.
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Conservatism right, Socialism wrong; Tax cuts for the rich, austerity for the poor; if it were only that simple.
Democracy gets in the way of such thinking, perhaps a way should be found to confine voters rights to their social position, their status in society, their level of education, or even their sex?
Why should the beer-bellied benefit cheat in Barnsley have the same voting rights as the blue-rinse lady in Surrey? Who started all this benefit nonsense in the first place? Was it a guy called Bevan in the forties?
There’s even talk about abolishing the House of Lords, even whispers about our Monarchy; democracy has a lot to answer for.
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Actually Rocker I’m not a social conservative. I believe in liberal democracy and help for the genuinely unfortunate. However the lack of of welfare controls under the last few governments of all colours in UK is disgraceful.
In France it’s totally out of control as you might expect being a neo-communist state. 👿 There is little incentive to work anymore the government encourages large families and hands out cash like sweeties. Who pays? Business mainly, the small artisans who are taxed to the gunnels, tourists and those who have provided for themselves in retirement.
The message is work does not pay welfare does.
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Actually Rocker I’m not a social conservative. I believe in liberal democracy and help for the genuinely unfortunate. However the lack of of welfare controls under the last few governments of all colours in UK is disgraceful.
In France it’s totally out of control as you might expect being a neo-communist state. 👿 There is little incentive to work anymore the government encourages large families and hands out cash like sweeties. Who pays? Business mainly, the small artisans who are taxed to the gunnels, tourists and those who have provided for themselves in retirement.
The message is work does not pay welfare does.
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Apologies for the off topic bits Mark but actually Gary’s post about the state of America is relevant. It actually in part reflects poor consumer confidence which is also current in Spain.
That is the reason why Spanish people are delaying a property purchase because they have absolutely no confidence in the future of the economy.
News today that Spanish budget deficit rose to 10.6% of GDP in 2012. The economy is heading backward and property prices will reflect that. People are not stupid they know the future for themselves and their family is bleak and getting worse.
When will we reach the bottom? In my view when governments realise austerity is killing Europe the pain is unbearable and change course. If that means the nuclear option of leaving the Euro so be it. I have a feeling in my water that’s inevitable.
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Apologies for the off topic bits Mark but actually Gary’s post about the state of America is relevant. It actually in part reflects poor consumer confidence which is also current in Spain.
That is the reason why Spanish people are delaying a property purchase because they have absolutely no confidence in the future of the economy.
News today that Spanish budget deficit rose to 10.6% of GDP in 2012. The economy is heading backward and property prices will reflect that. People are not stupid they know the future for themselves and their family is bleak and getting worse.
When will we reach the bottom? In my view when governments realise austerity is killing Europe the pain is unbearable and change course. If that means the nuclear option of leaving the Euro so be it. I have a feeling in my water that’s inevitable.
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@logan wrote:
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News today that Spanish budget deficit rose to 10.6% of GDP in 2012. …I take it that figure includes the bank bailouts. If not then this is pretty much game over.
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@logan wrote:
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News today that Spanish budget deficit rose to 10.6% of GDP in 2012. …I take it that figure includes the bank bailouts. If not then this is pretty much game over.
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@Chopera wrote:
@logan wrote:
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News today that Spanish budget deficit rose to 10.6% of GDP in 2012. …I take it that figure includes the bank bailouts. If not then this is pretty much game over.
Yes, the figure insisted upon includes the bank bailouts…the Spanish figure of 6.7% disregarded that, but the EU insisted on including it.
So, when the January figures are analysed, which include the 40 billion early repayment, it will seem as thought the deficit has dramatically been slashed to around 2%…
Methinks the EU (and the doomsters) have shot themselves in the foot on this one… -
@Chopera wrote:
@logan wrote:
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News today that Spanish budget deficit rose to 10.6% of GDP in 2012. …I take it that figure includes the bank bailouts. If not then this is pretty much game over.
Yes, the figure insisted upon includes the bank bailouts…the Spanish figure of 6.7% disregarded that, but the EU insisted on including it.
So, when the January figures are analysed, which include the 40 billion early repayment, it will seem as thought the deficit has dramatically been slashed to around 2%…
Methinks the EU (and the doomsters) have shot themselves in the foot on this one… -
The figures released today by Brussles showed that Spain posted a 2012 deficit of 10.6 percent of gross domestic product (GDP), including the cost to the state of recapitalising broken banks.
Madrid said at the end of March that when this cost was stripped out of the calculation, the public deficit fell to 6.98 percent of GDP.
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The figures released today by Brussles showed that Spain posted a 2012 deficit of 10.6 percent of gross domestic product (GDP), including the cost to the state of recapitalising broken banks.
Madrid said at the end of March that when this cost was stripped out of the calculation, the public deficit fell to 6.98 percent of GDP.
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Well exactly – if you include the bank money in the 2012 figure you end up with 10.6% .
It does mean that the January repayments will make the figures look exceptionally flattering for spain for 2013.
Spanish banks under our coverage will repay €41 bn of LTRO in January, or c.1/3 of the initial take-up. This is essentially due to Santander and BBVA (€32 bn), for which funding conditions have improved most. Domestic banks will repay a total of €9 bn or 12% of initial take-up. While a positive from a signaling perspective, we view the Spanish repayments as earnings dilutive, and risky. We believe it would have been preferable for Spanish banks to have held onto the ECB funds for longer.
Markets understand what’s happening which is why Spain’s borrowing costs are continuing to decline.
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Well exactly – if you include the bank money in the 2012 figure you end up with 10.6% .
It does mean that the January repayments will make the figures look exceptionally flattering for spain for 2013.
Spanish banks under our coverage will repay €41 bn of LTRO in January, or c.1/3 of the initial take-up. This is essentially due to Santander and BBVA (€32 bn), for which funding conditions have improved most. Domestic banks will repay a total of €9 bn or 12% of initial take-up. While a positive from a signaling perspective, we view the Spanish repayments as earnings dilutive, and risky. We believe it would have been preferable for Spanish banks to have held onto the ECB funds for longer.
Markets understand what’s happening which is why Spain’s borrowing costs are continuing to decline.
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While many have correctly predicted extremes in the economy, there are very few who have predicted or even recognized the ‘bottom’ or ‘peak’ of any market.
One big problem, among many big problems, is that most are waiting for the best time to buy, which is defined as being seconds before ‘the recovery’.
Of course the biggest issue is the level and frequency of the worst possible decisions and policies emanating from the various governing bodies that preside over the euro and related economies.
And the negative impact of those decisions are amplified by the complete incompetency of the current Spanish governing party, not that there is a good alternative.
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While many have correctly predicted extremes in the economy, there are very few who have predicted or even recognized the ‘bottom’ or ‘peak’ of any market.
One big problem, among many big problems, is that most are waiting for the best time to buy, which is defined as being seconds before ‘the recovery’.
Of course the biggest issue is the level and frequency of the worst possible decisions and policies emanating from the various governing bodies that preside over the euro and related economies.
And the negative impact of those decisions are amplified by the complete incompetency of the current Spanish governing party, not that there is a good alternative.
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@GarySFBCN wrote:
One big problem, among many big problems, is that most are waiting for the best time to buy, which is defined as being seconds before ‘the recovery’.
This is partially true for me. However, in my case it’s not so much about trying to get a better bargain. I am more interested to buy at a price that will mean my investment, such as it is, will not still be in negative equity when I decide to sell in 20 years time. It’s one thing breaking even, but making a huge loss is not acceptable. Therefore prospective buyers, in the same situation as I, are unlikely to rush to buy anything, until they feel that the market has reached somewhere near its lowest value.
D
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@GarySFBCN wrote:
One big problem, among many big problems, is that most are waiting for the best time to buy, which is defined as being seconds before ‘the recovery’.
This is partially true for me. However, in my case it’s not so much about trying to get a better bargain. I am more interested to buy at a price that will mean my investment, such as it is, will not still be in negative equity when I decide to sell in 20 years time. It’s one thing breaking even, but making a huge loss is not acceptable. Therefore prospective buyers, in the same situation as I, are unlikely to rush to buy anything, until they feel that the market has reached somewhere near its lowest value.
D
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Yes I think Daryl is right that is a valid reason why purchase is being delayed. That and the lack of mortgage funding, decent incomes, job uncertainty.
No one wants to find themselves in negative equity. You may as well rent. Paying interest or rent it’s the same thing without the prospect of capital growth. Renting also makes you mobile in the search for employment and more flexible as an employee as companies down size or move elsewhere and in Spain you don’t pay local taxes or community maintenance charges.
The world has changed we all have to change with it or economically perish.
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Yes I think Daryl is right that is a valid reason why purchase is being delayed. That and the lack of mortgage funding, decent incomes, job uncertainty.
No one wants to find themselves in negative equity. You may as well rent. Paying interest or rent it’s the same thing without the prospect of capital growth. Renting also makes you mobile in the search for employment and more flexible as an employee as companies down size or move elsewhere and in Spain you don’t pay local taxes or community maintenance charges.
The world has changed we all have to change with it or economically perish.
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