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Now even I think this is overly pessimistic although I have to say that most of the quoted figures seem plausable.
http://www.telegraph.co.uk/finance/economics/6228390/Spain-tips-into-depression.html
RR de Acuña said the overhang of unsold properties on the market, or still being built, has reached 1,623,000 . This dwarfs annual demand of 218,000, and will take six or seven years to clear. The group said Spain’s unemployment will peak at around 25pc, comparable to the worst chapter of the Great Depression
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Bulleted summary of main points of the report mentioned in the article here:
http://www.spanishpropertyinsight.com/buff/2009/09/21/no-recovery-until-2016-says-extra-gloomy-report-on-spanish-property-market/Mark
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Mark
Nearly 5 years ago you wrote this.
Lisa,
Just like the next person I have no idea what will happen to property prices on the Costa Del Sol in 2005. By the same token anyone that claims that prices are going to go up by X% is probably just trying to sell you a property whilst having no idea of what will actually take place. However my opinion, for what it is worth, is that there are significant risks of a price correction in the Costa Del Sol property market next year and the year after. The problem is that they are building like crazy and prices have already reached dizzy heights. Increasing the fragility of the situation is the number of off-plan investors with weak balance sheets and inappropriate investment criteria. The UK property market is cooling fast and the British are the big buyers – 50% of the foreign buyer market. Put all this together and I think it likely, though not certain, that the supply of some types of property in some areas will exceed demand, that off-plan investors will be forced to sell at any price, and that prices will be driven down. Long term the property market on the Spanish costas will be fine – there is a huge market in Europe for property there. But in the short to medium term I think a crunch quite likely. But not everywhere on the coast and not for all types of property, though if some areas / types of property were to crash I would expect this to have a depressing influence on the wider market.
I hope that helps. Any one else got an opinion on this subject?
Its not easy to make a 5 year prediction with any degree of accuracy, some of course will say its a lot worse than you predicted.
Edited to say, Well done, not many five years views are this accurate
When you have got time, maybe you can have a shot at the next five years.
Steve
PS Katy, Claire you want to have a look back then, late 2004 you where both newbies, what a laugh, its like looking at old school photos 😆
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@brianc_li wrote:
Now even I think this is overly pessimistic although I have to say that most of the quoted figures seem plausable.
http://www.telegraph.co.uk/finance/economics/6228390/Spain-tips-into-depression.html
RR de Acuña said the overhang of unsold properties on the market, or still being built, has reached 1,623,000 . This dwarfs annual demand of 218,000, and will take six or seven years to clear. The group said Spain’s unemployment will peak at around 25pc, comparable to the worst chapter of the Great Depression
The ’29-’33 USA deprerssion meant masses of people moiving from one area to another, people selling cars for food,etc.
Is there any sign of that in Spain right now?
Or is it just a real estate agent depression, them being forced out of work? And a too-optimistic British buyer depression, them being forced toi return to UK because had not done the homework?
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well, anyone living in Spain (ie this means participating in the daily life, reading Spanish press, TV ) knows how bad things are – a depression maybe not but you don’t have to be a macro economist to work out that the country is lurching towards higher unemployment and years in the doldrums !! unemployment in the province of malaga is 26% and expected to reach 30% by Easter………
as for the real estate business; well read Marks’ bullet points, the article from Variant perception and it is plain to see that prices will find a floor in the next two years or so at 50% below the highs of 2004…….(I also need to swallow this bitter pill)
the Brit agents who are starting to talk up the market are either naive, ignorant or desperate for a last chance before being forced into bankruptcy again and a future back in the UK working for a supermarket !!
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PS Katy, Claire you want to have a look back then, late 2004 you where both newbies, what a laugh, its like looking at old school photos
Funnily enough I did go waaay back a few months ago as I was looking for something. It was a nostalgic moment, and made me realise and appreciate all my hard work to get our money back from the shark developers. 😀
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@flosmichael wrote:
The ’29-’33 USA deprerssion meant masses of people moiving from one area to another, people selling cars for food,etc.
Is there any sign of that in Spain right now?
The last four properties I have viewed, have all been Spanish sellers. They have all volunteered that they are desperate to sell, as they have run out of money. You can see the despair in these peoples faces.
In one case I know the seller quite well, he urgently needs cash. I’m pretty sure his family will be moving into rented accommodation for the next few years.
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Good comment Steve
Someone should start a post on predictions for the next five years.
Many people were calling the UK, Spanish and US markets as over-heated from the early part of the decade when the Fed, ECB and BoE began their now infamous loose money binge to try and avert the recession we were then due. I read many articles and books detailing the likely consequences in the form of asset price crashes – specifically housing – and a recession as easy money gave way to belt-tightening and default. Not so many predicted the specifics of the financial meltdown and the problems of the banks.
As for Spain it does seem that the gloom has deepened even over the last couple of months.
@Stevev6 wrote:
Mark
Nearly 5 years ago you wrote this.
Lisa,
Just like the next person I have no idea what will happen to property prices on the Costa Del Sol in 2005. By the same token anyone that claims that prices are going to go up by X% is probably just trying to sell you a property whilst having no idea of what will actually take place. However my opinion, for what it is worth, is that there are significant risks of a price correction in the Costa Del Sol property market next year and the year after. The problem is that they are building like crazy and prices have already reached dizzy heights. Increasing the fragility of the situation is the number of off-plan investors with weak balance sheets and inappropriate investment criteria. The UK property market is cooling fast and the British are the big buyers – 50% of the foreign buyer market. Put all this together and I think it likely, though not certain, that the supply of some types of property in some areas will exceed demand, that off-plan investors will be forced to sell at any price, and that prices will be driven down. Long term the property market on the Spanish costas will be fine – there is a huge market in Europe for property there. But in the short to medium term I think a crunch quite likely. But not everywhere on the coast and not for all types of property, though if some areas / types of property were to crash I would expect this to have a depressing influence on the wider market.
I hope that helps. Any one else got an opinion on this subject?
Its not easy to make a 5 year prediction with any degree of accuracy, some of course will say its a lot worse than you predicted.
Edited to say, Well done, not many five years views are this accurate
When you have got time, maybe you can have a shot at the next five years.
Steve
PS Katy, Claire you want to have a look back then, late 2004 you where both newbies, what a laugh, its like looking at old school photos 😆
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Seems now even Spanish Town Halls are hit by the recession – or is it the lack of brown envelopes?
http://www.typicallyspanish.com/news/publish/article_23415.shtml
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I tried to stick my neck out a few weeks ago as I thought this was an interesting subject. The response was, shall we say, underwhelming…….
http://www.spanishpropertyinsight.com/forums/viewtopic.php?t=4582
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@Advoco wrote:
5 year prediction for Spanish property: if we could time travel forward to 2014 I don’t think you would see a huge difference in the market ie. we are in for a long period of flatlining, struggling on, getting by – whatever you like to call it. A sharp rebound in property prices, of the kind we have seen after every other recession in my lifetime, is looking unlikely principally because of the empty / unsold property glut but also because of the overall national picture:
– unemployment will stay high even if headline GDP grows
– govt cutbacks and tax increases to restore fiscal stability will further dampen things
– banks will continue to put their heads in the sand with govt connivance and this will create Japan-type stagnation
– Euro strait-jacket will rule out export led recovery
On the other hand I don’t see a second, worse crash – not with monetary conditions likely to remain so lax.My full views are here:
http://hubpages.com/hub/10-reasons-why-Spanish-Property-Prices-are-not-about-to-riseAnyone else sticking their neck out? How will the UK differ?
Rampant Inflation
Property Prices
DeflationRampant inflation = Cash is worthless = Possible sharp rebound in property prices
Deflation = Cash is king, all assets (including property) go down the drain
I guess Ben Bernacke, Mervyn King and Trichet are among the only opnes who know more about which way they want to go…
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