Spanish property market 2008: soft landing or train wreck?

Spanish Property Insight Forums Spanish Property Forums Real Estate Topics, News & Discussion​ Spanish property market 2008: soft landing or train wreck?

This topic contains 366 replies, has 34 voices, and was last updated by  Anonymous 10 years, 7 months ago.

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  • #53535

    Anonymous
    Participant

    What do you think? Leave your comments if you want, and vote in the poll.

  • #76835

    Anonymous
    Participant
    mark wrote:
    What do you think? Leave your comments if you want, and vote in the poll.

    Some area in Murcia and Almeria should have a huge crash.

    The prime property should hold the price. My impression is that the
    prime property is quite scarce in Murcia and Almeria, most of the area are already junked by the developers.

  • #76837

    mike
    Participant

    @mark wrote:

    What do you think? Leave your comments if you want, and vote in the poll.

    I think there will be a rush for the exit as people realise that they aren’t going to make money in property. Are there still some people with multiple apartments that they hope to sell before completion? That will make it worse

  • #76847

    Anonymous
    Participant

    Sorry, Ralita, but Spain is more than Murica and Almeria. It is for this reason that I had asked Mark to provide a region by region findings in his monthly report.

  • #76848

    Anonymous
    Participant
    shakeel wrote:
    Sorry, Ralita, but Spain is more than Murica and Almeria. It is for this reason that I had asked Mark to provide a region by region findings in his monthly report.

    I also know Costa Dorada and Benasque Valley. They are also hugely overpriced.

    I do not have any idea about places ot the West of Mojacar and between East of Valencia and Tarragona.

    I agree, my observation refers only to places I know.

  • #76883

    Inez
    Participant

    Personally I feel it has been a soft landing since 2004 and now the build up is heading for a train wreck. Whilst there are people who can withstand the downturn, many many more are the speculators who bought on a wing and a prayer anyway. These are the ones who will fuel this years and the next few years figures as they slash their prices to sell.

    Also banks are repossessing more than beofre. Int he past the good stock would be farmed out to either existing customers or notaries lawyers etc, but now even this is becoming surplus. Its a replay of the UK 90s era! This overload will shoot onto the market with banks having to take whatever they can get for them in order to get rid of the debt.

    I really cant see an alternative – maybe others can??

    But yes people will still buy here for the lifestyle or for longer term investment.

  • #76886

    Anonymous
    Participant

    Inez, I remember reading a post from you (on another forum) several months ago when the future was looking difficult in the property market. You said you were arranging an exit strategy. Are you putting it into play yet? πŸ˜‰ πŸ™‚

  • #76889

    Inez
    Participant

    Hola Claire – I cant remember that one. Dunno if it was personally or professionally either!! (or down to too much wine!!)

    Guess I could go bankrupt and find menial work until this all blows over – and dont think I havent thought about it!!! πŸ˜†

  • #76890

    Anonymous
    Participant

    @inez wrote:

    Hola Claire – I cant remember that one. Dunno if it was personally or professionally either!! (or down to too much wine!!)
    πŸ˜†

    Possibly! πŸ˜†

    Whatever, I hope you come out of these difficult times intact Inez. πŸ™‚

  • #76891

    Inez
    Participant

    Gloria Gaynor is my mentor!!! I reckon this will be an interesting year for sure!

  • #76958

    Anonymous
    Participant

    Hi Inez

    Hope you can make it work, for me we are back to the UK this weekend. The decision has not been made easier by clear blue skies and tempretures in the mid 20’s. We were offered a 3 year let on our house so we have made the decision to go whilst we still have funds left and we can get our son back in UK education before his GCSe options at school.

    Have I regretted coming to Spain? no not one bit! our 5 years here have been an experience none of us (especially my son) would have missed.

    FOr those of you still battling to earn a living in Spain I wish you well and will remain somewhat envious.

    Hasta Luego

  • #76960

    Anonymous
    Participant

    Good luck Jim. It’s not all bad in the UK….except the weather….and the fortnightly rubbish collections…and…………… πŸ™‚

  • #76964

    Anonymous
    Participant

    All markets are driven by scarcity and momentum, add speculation to off plan sales and you will achieve a level of opaqueness that defeats even the most qualified analysts. Mark Stucklin is absolutely right to distrust some of the statistics being proffered concerning the property market in Spain. Those of us who have been at the coal face of this industry know that the outright crash in oversupplied areas has actually happened, but the problem is so serious for Spain, that the industry does not want to admit to what has happened. The outlook for Spain could not be worse.

  • #76990

    Anonymous
    Participant

    Bernard do you think that the situation in Spain is why so many people are not getting their deposits returned from illegal builds? The Courts do not want to compound the problem even if it means injustice is seen?

  • #76994

    Anonymous
    Participant

    Dear Claire

    Thank you for your question. I find myself in a difficult position to answer without any knowledge of the specific cases where deposits have not been returned.

    I am half Spanish with a mother from Madrid, and we went to live in Spain when I was stationed in Gibraltar, some 20 years ago. After leaving the Army I was for six years a Sales Director for a developer. During that time I have to admit that I came across levels of business conduct which I found unacceptable.

    I concluded that the money was made when off plan sales were completed and lost when we started to build. Every project I sold ended with some disaster, and I have to blame the College of Architects as it is architects who are now the guardians of the planet we all share. Ultimately it is the execution of their projects which we pay for to enjoy and Spanish Architects fail to properly supervise the execution of the build programme because of the system in Spain is so protective of these professionals, and structured in such a way that an architect will always have another individual to blame.

    My decision was to leave Spain and to move to Portugal where the level of integrity and general business conduct make me feel more comfortable.

    I feel very sorry for all those who have purchased property in Spain and I fear that the majority who have been caught up in schemes where matters have gone wrong, will lose all their money. I believe that collectively we all have a moral obligation to make sure that others do not fall into the same dreadful abyss. The most effective class action is to ensure that the number of foreigners buying property in Spain reaches zero, then the Spanish Government will have to intervene, to sort out this mess, and to compensate those who have suffered. That is how serious the problem is, and now with some much displaced labour about to be unemployed in Spain the level of crime will increase to such an extent that few will choose to live in or go to Spain.

  • #76996

    Anonymous
    Participant

    the so called soft landing has been happening for some time, but as i said recently in another post i don’t see this precludes the market from going into freefall, and I’d say the chances are currently 50/50 at best. There are far too many negatives, with only a few positives, these positives are quite major but a change in any one will almost certainly result in freefall, its going to become an even more difficult time imho.

  • #77000

    Anonymous
    Participant

    Great time to buy, terrible time to sell as for the Poll somewhere between the two is the most likely scenario IMO

  • #77007

    Anonymous
    Participant
    Senor Nick wrote:
    Great time to buy, terrible time to sell as for the Poll somewhere between the two is the most likely scenario IMO

    Sorry, why is it a great time to buy and a not a good time to rent?

  • #77014

    katy
    Spectator

    Good point Ralita, thats twice today I agree with you 😯

  • #77028

    Anonymous
    Participant

    One of the most erudite analysts is Professor Michael Ball of Reading University and the author of The European Housing Review. In the 2005 edition there was an interesting chapter on the second home market and in particular the economic fundamentals which drive this market and how it differs from the principal home market.

    In a principal home market where there is a normal supply environment any downturn in house prices increases affordability and therefore when rental payments exceed mortgage payments, those renting are induced into purchase. This provides the market with a soft landing and an assured recovery. Only when you have an outright catastrophe or mass unemployment do you have a market crash, and even if this does happen it tends to be very regional.

    In a second home market there is no such fall back group and so when prices start to fall as they have no technical or fundamental support they are vulnerable to an outright crash. If you oversupply the market with the wrong type of housing in the wrong areas then you exacerbate this problem. Unfortunately this is what has happened in Spain.

    It is important not to generalise as the property market is highly complex and tends to be made up from many micro-markets each with their own strengths and weaknesses. Indeed large businesses and extraordinary events in an area can have exceptional results. For example the building of a new airport, or the introduction of a new industry.

    No honest or rational person with the knowledge and experience I now have could ever consider encouraging any individual to purchase residential property in Spain today. I forecast a drop of up to 70% in the worst affected areas, and as Spain is so heavily dependent upon the construction sector, the entire country is going to be affected in one way or another. This downturn will also spread to other countries. For example in Portugal, Spanish investors are being forced to sell investments they made because they cannot afford to pay the banks in either Spain or in Portugal. I cannot over emphasise how serious this problem is.

  • #77030

    Anonymous
    Participant

    You sound well informed and knowledgeable Bernard.

  • #77031

    Anonymous
    Participant

    I forecast a drop of up to 70% in the worst affected areas, and as Spain is so heavily dependent upon the construction sector, the entire country is going to be affected in one way or another. This downturn will also spread to other countries.I fear that the majority who have been caught up in schemes where matters have gone wrong, will lose all their money. I believe that collectively we all have a moral obligation to make sure that others do not fall into the same dreadful abyss. The most effective class action is to ensure that the number of foreigners buying property in Spain reaches zero, then the Spanish Government will have to intervene, to sort out this mess, and to compensate those who have suffered. That is how serious the problem is, and now with some much displaced labour about to be unemployed in Spain the level of crime will increase to such an extent that few will choose to live in or go to Spain..

    Hello, this is my first post and I really don’t want to upset anyone, but although I agree with most of what Bernard says in his posts, I find the comments above, verging on hysteria. It is crazy opinions like these that are doing the worst damage to the property market in Spain, just like the British media has been doing for the last 3 years. And yes, I am an Estate Agent, and also an honest one. The days that Bernard writes about, should be gone forever. I know that a lot of the property crooks are still here, but mostly, in so-called “emerging markets”. I was originally an Estate Agent in the UK, and honest there too. I saw bad times and I saw good times, cycle after cycle, they’ll always be there. I sold as little as one house a month in the bad times, and as many as 12 houses a week for long, long periods in the good times. The (alleged)closure of all but one
    of Viva Estates offices, does not in any way demonstrate the state of the property market here today, but only the state of the property market here for the last 2 years. the bigger you are, the harder you fall. If the situation had been read earlier, and surplus offices closed much, much sooner, maybe Viva wouldn’t be in the position they are now. But who cares?…. I certainly don’t. For every one of the big estate agents that close, the more business there is for the smaller Agent, who hopefully will do a better job. I certainly will. Soft landing….? We’re already in it.

  • #77032

    Anonymous
    Participant

    paulespana
    You beat me to it as at first seemed an excellent well informed posting appeared which to launch into space. πŸ˜•
    Natuarally as it was the forcast of armegendan it received a welcome responce the forum and just wonder how well it would have received it the script was shall we say tempered ❓ . πŸ˜€ 😈
    No matter its great that you have posted and welcome to the Spanish Property Insight fi, cough forum πŸ™‚

    Frank 8)

  • #77033

    Anonymous
    Participant

    My Dear Paul

    In Spain, and over a period of 20 years, I have ben an Independent Financial Consultant, an Estate Agent and a Sales Director for three Property Development Companies. I have no reason to verge on hysteria as I am no longer in that market. I sound caution. I have been privileged to information, experience and knowledge which I now share freely with others. I do not ask anyone to agree with what I write nor is there any compulsion on anyone to follow my advice. However I do ask you all to carefully note what I have written and I write as an individual who has everyones best interests at heart.

    What I have written I have written in all sincerity. I saw at first hand individuals coming to buy one apartment and leaving having bought ten. In one extreme case one individual bought all 35 apartments in one block. Although our sales volumes increased what was increasing at a faster rate were the number of re-sales being listed.

    I do not wish to dwell upon other peoples experiences or indeed upon the number of Estate Agencies which have had to close, or the integrity of those who remain in the market. I consider myself to be an expert and I remain absolutely intransigent on what I have written. Spain will crash.

  • #77034

    Anonymous
    Participant

    It is crazy opinions like these that are doing the worst damage to the property market in Spain,

    IMHO it is the greedy developers ,crooked lawyers and the corrupt Town Hall officials who have done the worst damage to the property sector in Spain. It is the buyers who have now clued themselves up on the malpractice of these people that have added their weight to the country’s demise.

  • #77035

    Anonymous
    Participant

    My Dear Claire

    You are absolutely right. This is the defining moment, Spanish practices are being exposed, and consumers have correctly identified that Spain is a country which must now be avoided at all costs.

    We must have the moral courage to protect the weak, to demonstrate to Spain that what it has allowed to happen is unacceptable in a western civilized country, and that its Government must now intervene to assure its credibility as a Sovereign Nation by grasping this opportunity to sort out the mess into which many misguided innocent individuals find they have been sucked into.

  • #77036

    Anonymous
    Participant

    What fate awaits the Spanish property market in 2008?

    As this is all about personal opinions, here’s mine.

    To predict the fate of the property market, we have to assess the economy to which it is linked.
    (to state the bleedin’ obvious!)

    The economic outlook for 2008 is undeniably grim. Why?

    – inflation in Spain is increasing at a rate more than the Euroland average.
    – Spain’s current account deficit is increasing year on year
    – cost of imports increasing – rising inflation in Far East and China
    – rising oil price – Spain’s dependence on imported oil
    – rising unemployment – likely to increase markedly with laid-off construction workers
    – No large Government budget surplus to pay for tax cuts or increased public spending
    (which incidentally both PSOE and PP have promised in their March election manifesto I believe)
    – Likely decrease in tourism figures
    – massive contraction of the property sector
    – N Europeans desperate to offload 2nd homes to fund rising primary home mortgage costs
    – Glut of empty properties, bank repossessions,

    Historically, there has never been a housing crash without a recession (or is it the other way around?!) and IMHO one or the other is likely to happen, very soon.

    I think there is always a period of soft-landing before the crash, and we’ve now had that
    between 2004-2008.

    Sorry to be so gloomy, fasten your seatbelts reckon we’re about to hit the buffers.

  • #77037

    Anonymous
    Participant

    In reply to Bernard Hornung, I do not agree with Professor Michael Ball’s opinion, because a second housing market and primary market are very different for fundamental reasons. The comment implies they are different because of their response to a depressed market. The two are not the same

    For the vast majority of people their house is their home. Once a homeowner, ones does not move into rented accommodation because it’s cheaper, the movement is always from rented to ownership. Therefore the sale of a property is generally forced upon the owner due to a multiplicity of reasons (job change, change in financial circumstances, divorce, death of family member etc etc)

    In a depressed economic environment, the forced sale of a properties will undoubtedly mean that the prices will fall.

    For a second home ( with the exception of change in financial circumstances), those reasons above are generally not present.

    The question is how much of the Spanish housing market is second holiday homes and investment properties as opposed to primary homes, and that is the important fact that will dictate the direction of the general market.

    Of course fundamentally the relationship is simply supply and demand, and supply will be limited by those homes that are second holiday homes and investment properties because owners will not sell and incurr a loss unless they are forced to.

    Therefore I don’t agree with the simplistic argument put forward with regard to a fall in the Spanish property market being unbounded, for the market will gain support where supply is limited.

  • #77038

    Anonymous
    Participant

    Hi

    The poll margin is close 41-57 percent, lots of views, lots of wise words, but when is the train wreck going to happen, when am I going to get my half price house in Marbella?

    Steve

  • #77039

    katy
    Spectator

    They are all over the place, just ask some of the Agents πŸ˜‰ πŸ™‚

  • #77040

    Anonymous
    Participant

    @ralita wrote:

    @Senor Nick wrote:

    Great time to buy, terrible time to sell as for the Poll somewhere between the two is the most likely scenario IMO

    Sorry, why is it a great time to buy and a not a good time to rent?

    I didnt say it wasnt a good time to rent, just not a good time to sell.

    Still great opportunities for people who havent already bought but it all depends on your point of view, but if you can buy a villa for 40% under the current bank valuation id say that represents very good value

  • #77041

    Anonymous
    Participant

    Katy

    You have been busy today. loads of posts!.
    All
    No, Ive been thinking for some time now,all the gloom and doom and really quite convincing arguments for a train wreck, BUT WHEN IS THIS GOING TO HAPPEN. No evidence yet on the CDS (good bits), please post if you have evidence(factual and current). Can the experts please give me an idea WHEN THE TRAIN IS REALLY COMING OFF THE TRACKS, dates please to PO BOX 1550 10% for you Ha Ha

    Good Night

  • #77043

    Anonymous
    Participant

    Dear JP1

    If you read what I have written carefully we actually agree. It is all about supply and demand and that is why a property market is highly complex and indeed made up of many micro markets.

    The vast majority of those renting who are then induced into purchase are first time buyers. Once people are on the housing ladder they tend to remain there.

    The principal home market and the second home market are indeed very different and behave in very different ways. The former will normally always recover, the latter will too but the cycle is much longer and the rises and falls far greater. I witnessed this in Spain in 1987 to 1997.

  • #77044

    Anonymous
    Participant

    Downbeat article on the Spanish property market in the FT yesterday

    Spain sees credit surge brought to rude halt

  • #77051

    Anonymous
    Participant
    Stevev6 wrote:
    Katy

    No, Ive been thinking for some time now,all the gloom and doom and really quite convincing arguments for a train wreck, BUT WHEN IS THIS GOING TO HAPPEN. No evidence yet on the CDS (good bits), please post if you have evidence(factual and current). Can the experts please give me an idea WHEN THE TRAIN IS REALLY COMING OFF THE TRACKS, dates p

    Looking at the situation in USA, the newly developed places will experience first the sharp correction.

    Good places in CDS will experience last the correction and it will be lower than
    places in Almeria or Murcia. You need patience.

  • #77052

    Anonymous
    Participant
    mark wrote:
    Downbeat article on the Spanish property market in the FT yesterday

    Spain sees credit surge brought to rude halt

    From the same article:

    β€œI’ve been a bank manager for 28 years and I have never lived through a situation as dramatic as this,” says the branch manager of a regional savings bank, who asked not to be named. β€œHouse prices in this town have fallen by 20 per cent, there is no demand, and no mortgage finance. Savings banks have cut off funding. Before the credit crunch, I used to do 12 mortgages a month. Since August, my branch has approved only one new loan.”

    He says that for the first time, clients are handing in the keys of their homes and walking away from their debt problems. β€œWith the fall in house prices, families are giving up. They don’t see the point of struggling on with their mortgage payments.” Repossessions, he says, are on the rise.

  • #77060

    Anonymous
    Participant

    One of the most perilous acivities is to forecast markets, and the only reason I stuck my neck out is because I know that we are all voting on something which has actually happened. The market has crashed and this will become evident as repossesions increase.

    I reiterate what I wrote previously, ..”those of us at the coal face of this industry…”, the local bank manager is a person at the coal face of the industry and his comments are alarming, his 28 years experience not to be ignored.

    And for those misguided bargain hunters amongst you gloating on buying property at 40% below bank valuation, forget it. Banks do not value properties, banks appoint a panel of surveyors to value property, and these individuals use the same criteria to value primary and secondary homes.

    I remember once slavishly answering the questions being posed to me by a surveyor . His questions included the whereabouts of the nearest bus stop, cinema, local school, railway station etc..

    What influenced values were front line to a private golf course, south facing and sea views. He had absolutely no idea as to what he was doing and acted like some robot just filling in a questionnaire. His work had no foundation to it whatsoever.

    Moreover these valuations may be higher than they should be so that the LTV can be maximised. At one stage in the cycle we went through a cash back phase, can you imagine how crazy that was.

    You apply for a mortgage, the valuation comes out at 40% more than the asking price, you get a 90% mortgage and hey presto you get a cash back! Banks were too eager to lend and assumed that property prices would always rise and that the debt in real terms would, after a period be amortized through inflation. Great theory in a rising market, not so good today. I think that this is enough from me, thanks for your comments.

  • #77061

    Anonymous
    Participant

    Bernard πŸ™‚
    You are indeed a very interesting person and have spent 2 hours today comforting a couple that have a second home in Manilva that they love and paid 220,000 euros is not now worth 70% less than what they paid for it. 😯
    Also that they wont be raped and pillaged when enjoying a glass of wine on the terrace while watching the latest footie. πŸ˜•

    Frank 8)

  • #77062

    katy
    Spectator

    πŸ˜† πŸ˜† πŸ˜† How can you put a price on a life in the sun…been raining today though πŸ˜‰

  • #77063

    Anonymous
    Participant

    I remember the last crash in the UK, I was a student at university and had bought my own house with a fellow student. The property rose approximately 30% between agreeing the price and completing, a period of 3 months. Almost to the very day of signing, the day before the joint MIRAS tax relief was abolished the crash started in London. The crash took approximately 2 years to reach my university town by which time I had sold the property.

    Money was extremely easy, lending to two unemployed students. Interest rates were 10% when I bought the property and 15% when I sold. Hence I saw an increase of 50% to my interest only mortgage over the period I had the property. A recession had hit the UK on graduating and many graduates could not find work.

    On reflection it was obvious to me that prices had to fall.

    Role on 7/8 years, (having had 40~50% increases in prices over the last 5 of them) I was very certain that a crash would re-occur, I could not see why it should not given that conditions to me appeared to be the same. And that was mainly the ratio of price to earnings.

    Well the crash did not occur and we saw another 10 years of price growth to where we are today (an increase of 4.5 times for my particular property 550%) from when I bought right at the botton in ’93.

    The reason why it did not crash is that interest rates fell to 5%, demand exceeded supply and the UK was in full employment. As well as other factors no doubt.

    I don’t believe the UK will see a crash as these factors remain, but affordability will see that prices flatten or fall slighly over the next few years. But I could be totally wrong.

    Now is Spain any different to the UK? Maybe, but I think it’s just as likely that if the UK prices remain flat and don’t crash, then Spanish property will also follow the same pattern. Only time will tell.

  • #77065

    Anonymous
    Participant
    jp1 wrote:
    Now is Spain any different to the UK? Maybe, but I think it’s just as likely that if the UK prices remain flat and don’t crash, then Spanish property will also follow the same pattern. Only time will tell.

    UK does not have more than 4 million empty houses. Add to these 4 million the hundreds of thousands which are still building and you get a huge number of unoccupied properties in Spain.

    Now, if all the retirees in North Europe move to Spain, the Spain will be OK…

  • #77066

    Anonymous
    Participant

    ITV in the UK have just shown ‘Tonight: Britains Biggest House Price Falls’. It can be seen on the ITV.com website for those interested.

    The show highlighted the cooling down in the UK market over the last 6-12 months and gave a few extreme examples where property was being sold way below original asking prices. There was even a Manchester based estate agent complaining that property in the area was now taking too long to sell (more than a couple of weeks) and so she was relocating the agency to Greece until things picked up again back in the UK!!

    If things do get rough in the UK, then it must have a knock on impact on those planning to retire to Spain, Greece etc, many who will rely on the sale of their own UK property. Then again, the ITV Tonight show can put the Sun newspaper to shame when it comes to sensationalism. πŸ˜‰

  • #77067

    Anonymous
    Participant

    ralita wrote

    UK does not have more than 4 million empty houses. Add to these 4 million the hundreds of thousands which are still building and you get a huge number of unoccupied properties.

    Absolutely right ralita. There is a big difference between Spain and the UK as far as construction/building is concerned.

  • #77070

    Anonymous
    Participant

    @jp1 wrote:

    The reason why it did not crash is that interest rates fell to 5%

    Japan introduced a zero-rate interest rate policy and property prices remained in freefall for a further 5 years.

    As Bernard has said, the property market is a very complex beast!

  • #77073

    Anonymous
    Participant

    I promised not to come back, but I feel for the couple in Manilva. I really do not wish to add more grief than the market downturn has already, and so on a note of optimism I do forsee a recovery from 2010 onwards in the more established areas. Manilva is well established, it will survive.

    The worst affected areas are those large and ambitious residential projects in the middle of nowhere.

    I think that you are all discovering how complex a property market is and how it is driven more by the fundamentals of supply and demand rather than by technical influences such as interest rates alone. Japan is an excellent example.

    When residential property is occupied and mixed use communities created, you are usually in an environment with a more normal level of supply and demand.

    So before you buy think through the seasonal boom bust trajectory of single use resorts, and all the economic and social problems which arise in these resorts, look for thriving all year around mixed communities which span generations and seasons, family ambience and business tourism, and environmental responsibility with modern luxury. These are the key fundamentals.

  • #77077

    Anonymous
    Participant

    @ralita wrote:

    @jp1 wrote:

    UK does not have more than 4 million empty houses. Add to these 4 million the hundreds of thousands which are still building and you get a huge number of unoccupied properties in Spain.

    Now, if all the retirees in North Europe move to Spain, the Spain will be OK…

    Most of these 4 million empty houses are in concrete jungles which would be hard to sell at any price never mind the inflated prices they have been asking. A 40% reduction is probably just what they were worth at the top of the market.
    Also having just spoken to the developer where we are they are getting enquiries and have sold two in December from Russians who seem to be the ones with the money now. There will always be options for good properties in good locations.

  • #77079

    Anonymous
    Participant

    The train derailed some two years ago and everyone (agents, greedy owners etc) has been in denial.

    Bernard might sound a bit of a Cassandra but he is right, except for blaming the architects. Architects follow developers instructions and budget – design the cheapest, spec the cheapest materials etc …

    badly located new builds (Manilva, Mijas, Alhaurin to name just a few) would be lucky to lose only 20% of the off plan purchase price 5 years ago. On top of it these flats were so badly built they are now suffering from damp, bad light and water connections and generally in a shocking state putting off any potential viewer. Hardly any of them have a running community so the public areas, pools etc have gone/ are going to pot.

    exaggeration? not really – i know many who bought blocks in these “developments” who are now to mortified to own up to their act of folly. they can afford to lose all the money unlike innocent lambs to the slaughter who believed the “sales pitch” from a bunch of spivs and crooked developers!!

    Apart from the unstoppable inexorable meltdown that is happening on the coasts of Spain affecting second home owners, the national market is also now in the grips of a”train crash” with the central goverment desperate to cover up the current state until the March election is out of the way.

    I don’t know about other areas of Southern Spain but the commercial property market has also just crashed in the Marbella area with tons of premises coming on the market for sale or rent at prices well below the bubble highs. Business’s here are closing by the day, employees being sacked in droves !!! train crash ? no, much more serious –

    buy only in the best areas, the best quality and best location – avoid the 50% market reductions – that’s only close to the real price !!

    Paul M

  • #77085

    Anonymous
    Participant

    Interesting debate, but what exactly is the problem with falling prices? I’m prepared to take a loss on my four-bedroomed house in Emporda (unlikely as it is in this area) because other property that I want to buy nearby will have fallen by a similar amount. Falling prices in Spain should enable other people to buy there, which can only be good for them. Those who will suffer generally bought mass-produced homes off-plan on the Costa del Sol. Many of us have known for years that these were grossly overpriced and overhyped. It wasn’t rocket science. I’m afraid if you bought in the hope of a “killing” and end up losing money that you can ill afford to lose, then that’s the market at work. Welcome to the real world.

  • #77087

    Anonymous
    Participant

    The danger with falling prices is negative equity, the way in which debt has been recycled from credit card to equity release, the lack of liquidity in the economy and counter party risk in completions.

  • #77089

    katy
    Spectator

    Ubeda I agree with what you say.

    Also the home market is doing badly too as the spanish are facing rising unemployment. Even if they are in a position to move to a better property they cannot sell so everything is at a standstill. The market has been talked up for the last few years as sales have been falling. I really don’t think prices have fallen (yet) but virtually nothing is selling so something will have to give. I think it will be a while before they are any bargains, plus the first real bargains go to the spanish, the bank clerks family and friends and the same with estate agents cronies!

    There does seem to be lots of publicity that prices have fallen…guess who started those rumours………?

  • #77096

    Anonymous
    Participant

    @colinB wrote:

    Interesting debate, but what exactly is the problem with falling prices? I’m prepared to take a loss on my four-bedroomed house in Emporda (unlikely as it is in this area) because other property that I want to buy nearby will have fallen by a similar amount. Falling prices in Spain should enable other people to buy there, which can only be good for them. Those who will suffer generally bought mass-produced homes off-plan on the Costa del Sol. Many of us have known for years that these were grossly overpriced and overhyped. It wasn’t rocket science. I’m afraid if you bought in the hope of a “killing” and end up losing money that you can ill afford to lose, then that’s the market at work. Welcome to the real world.

    The problem is for those who already own houses here not new buyers (who will get great VFM), I see loads of real bargains that id love to buy but I have to sell my house first which is the problem for local people, so those people with cash or abillity to service debt have a great advantage.

    Also unlike the UK selling your house here isnt just about selling at rock bottom price the volume of buyers just arent out there

  • #77113

    Anonymous
    Participant
    colinB wrote:
    Interesting debate, but what exactly is the problem with falling prices?

    If you do not plan to buy or sell , there is really no problem with falling prices, it is just a subject of discussion.

    If one plans to sell, falling prices are a nightmare as they need to cut the price before the neighboring sellers do so and bury Saints in their garden to help them sell the house (they do this often in USA nowadays).

    If one plans to buy, then there is only the problem of waiting till the bottom is reached or slightly passed.

  • #77114

    Anonymous
    Participant

    The property market in Spain is in a real mess for a number of complex reasons all of which are begining to crystallise at the same time, the situation has been exacerbated by other events such as the sub prime defaults.

    The lasting value of residential property derives from location, the sound execution of the build programme, the quality of the fixtures, fittings and finishes, and the free market forces of supply and demand.

    Property development in Spain in the last 40 years has followed the American model of strict zoning whereby we live on one place, work in another, shop in another place and take our leisure elsewhere. This makes us heavily dependent upon mechanical transport, necessitates a much greater infrastructure, generates a higher level of pollution and creates deprived areas such as out of season holiday resorts, with all the social and economic problems that such a seasonal boom-bust trajectory imposes upon the community.

    The traditional European planning model of mixed use developments, embraces far greater social awareness, creates communities of people who see and care about each other every day, reduces dependence upon mechanical transport, and provides for a more integrated and supportive community, particularly in rural areas.

    But more importantly it provides for a far greater control on property development, for the re-generation of brown field sites and the protection of the countryside. So when you select a property in an outstanding location, there is a higher probability that it will remain as such, and that you will not wake up one day to find that you have a development of 300 apartments at the foot of your garden, as so many people in Spain have.

    The sound execution of the build programme should be exclusively controlled by one individual who accepts this responsibilty. I believe that it should be the architect and that they should be encouraged to visit the site more often, and that they should ensure that the specifications match those which have been agreed with the purchaser, and not buckle under pressure from a developer to skimp as much as possible.

    The quality of the fixtures, fittings and finishes add immense value to todays home, as do energy saving devices. Here the trades and the skills of the tradesmen have an important role, so that devices operate correctly once installed and that there is a proper back-up service in the event of a malfunction or emergency.

    Finally there is the free market force of supply and demand, and we have all agreed as to how this influences the market, and that Spain has been oversupplied with about 4 million properties.

    It is difficult to imagine anybody buying into this mess, after all the properties for sale are for the most part properties which no one would wish to buy, they have been poorly built, badly fitted out, the infrastructure around them in many cases unfinished or collapsed under the weight of excessive development, and there are just so many properties which no one needs or wants with so many more being built.

    Spaniards tend to prefer to conduct transactional business, whereby as soon as they have received full payment for the goods or services supplied, they immediately conclude their relationship with their customer.

    We Brits tend to conduct relationship business and we value our clients, from whom we seek to obtain further business through the reputation we have gained in serving them. It is a very different approach.

    Unfortunately in all this mess there is a fundamental difference in attitude and willingness to sort things out. Sadly I fear that although history seldom repeats itself precisely it does have a certain rythym and the attitude of the Spaniards will be to wait for this to all blow over and that time will resolve the problems the country is facing today, as it has done previously. Although not that long ago there was a civil war.

  • #77116

    Anonymous
    Participant

    Two things to add

    Some of you will know the development but down here in Costa del sol you can buy a 110m 2 bed apartment for say 220000 which was getting a bank valuation of 348000 which means you could borrow 100% and costs and move in for nothing, interesting now the valuers have been knocking the value back to around 300k ie 3000 psm and these units are built to very good standards but if you buy at 220k thats 2000 euros PSM so how much further are those units going to fall, i hasten to add that the final phase is trying to be sold at 280k but thats just one example of one new development.

    Also I have a friend who came over in september found his ideal town house near Benalmadena Pueblo with a view to moving to live here this January but surprise surprise he cant sell his house in the UK which will impact on quite a few more people IMO

    Its the usual story of people who have money will probably make money and nows not a good time to get n a financial mess

  • #77118

    Anonymous
    Participant

    Senor Nick

    Just like Spain the US and every other property market in the world (that has a developed mature re-sale market) in the UK, if a property isn’t selling it’s because of one of two reasons.

    There is somthing wrong with it (and assuming that isn’t the case).

    It’s purley down to price. The only price that is important if you are serious about selling is the ‘effective market’ price. That being the best price the property can achive on the open market in a ‘reasonable’ timescale.

    In the UK I’m hearing the phrases like ‘Idon’t want to give it away’ and I don’t want to sell it for less than it’s worth’. What people think their property is/was worth is of no consequence in turning it into cash.

    The value of a property at any given time, whether arrived at by an estate agent, surveyor or vendor is only an ‘opinion’, it’s the market that decides ‘the effective’ price. It is of course the vendors perogative to accept that.

  • #77120

    Anonymous
    Participant

    If you haven’t already voted in the poll above please could you do so. I need a bigger sample if I’m going to use the results in an article.

    Thanks

    Mark

  • #77129

    Anonymous
    Participant

    The costs involved in buying and selling in Spain compared to the UK especially the 7% tax I think is also a factor why people do not relocate or upgrade as often.

  • #77130

    Anonymous
    Participant

    Dear Mark

    I trust that you will secure suffcient votes for an article.

    I ask you to consider inserting.

    Firstly a quote from Sir Winston Churchill, ” We shape the buildings which shape our lives.”

    Secondly the lesson I have learnt as a property developer is that we must only develop for a purpose and not just for profit.

  • #77131

    Anonymous
    Participant

    @mark wrote:

    If you haven’t already voted in the poll above please could you do so. I need a bigger sample if I’m going to use the results in an article.

    Thanks

    Mark

    Ive voted soft landing but thats not my view, I think it wont be a train wreck but somewhere in between

  • #77137

    Anonymous
    Participant
    Senor Nick wrote:
    units are built to very good standards but if you buy at 220k thats 2000 euros PSM so how much further are those units going to fall,

    There is one way to get the real price.

    Take the local anual salary and multiply by at most 5. I guess 25000 Euro is a good salary so the price of those properties should be at most 125000 Euros.

    Even if you add the location premiums (say 50%), the price should not exceed 180K Euros.
    And this in a normal market, where mortgages are obtained easily and there is no selling panic.

    In the current situation, I would not be suprised if the bottom price would be around 100K Euros in a couple of year time.

  • #77143

    Anonymous
    Participant

    “Spaniards tend to prefer to conduct transactional business, whereby as soon as they have received full payment for the goods or services supplied, they immediately conclude their relationship with their customer.”

    100% agree to the above statement. I will go further than that in the case of Construction Industry its is as soon as you have put the 20 or 30% to exchange the contract the developers do not want to know. This practise is applied all over the Mediterranean world.

    Personally, I put it down to a number of factors.

    1) Local business lack of confidence in the economy and the system.

    2) They never felt that once you have borrowed, you will have the capacity to come for more.

    3) All commercial transactions were taken as a short term, as there were no sensible mid long term financial instruments. Letras were the only practical and short term finance available. The associated cost of borrowing i.e. notary fee etc would discourage people.

    4) Lack of confidence in your product and the raw material used/supplied. The supplier agreeing to its price and delivery time.

    5) In the past Bank interest rates were so high that you had to charge a very large margin/price that your local economy could not support it. The product became uncompetitive, that they felt no one will come back for more as a buyer you would be so frustrated, jaded and perhaps lost money on it.

    6)Civil service, its working practises, non accountabilty and its petty attitude, delayed transactions.

    7) Making, money was considered and still considered as Vulgar. It was socially looked down upon. So most transaction were done to put dinner on the table as appose to wealth creation.

    8) Punitive direct or indirect taxes. The attitude of the Tax man was if you have the money to start a business than I want it now and you are some capitalist, who is sucking the blood of the poor people, and you pay.

    I think the above are enough

  • #77145

    Anonymous
    Participant

    @ralita wrote:

    @Senor Nick wrote:

    units are built to very good standards but if you buy at 220k thats 2000 euros PSM so how much further are those units going to fall,

    There is one way to get the real price.

    Take the local anual salary and multiply by at most 5. I guess 25000 Euro is a good salary so the price of those properties should be at most 125000 Euros.

    Even if you add the location premiums (say 50%), the price should not exceed 180K Euros.
    And this in a normal market, where mortgages are obtained easily and there is no selling panic.

    In the current situation, I would not be suprised if the bottom price would be around 100K Euros in a couple of year time.

    Well your entitled to your opinion but not one I share because thats based on incomes not as people’s second or third homes who dont need to sell and the cost of constructing a new apartment etc etc

  • #77146

    Anonymous
    Participant
    Senor Nick wrote:
    ralita wrote:
    Senor Nick wrote:
    Well your entitled to your opinion but not one I share because thats based on incomes not as people’s second or third homes who dont need to sell and the cost of constructing a new apartment etc etc

    What is the opinion in the case of people’s second or third homes?

    Is it like: the price can go sky high as long as there is somebody willing to pay?

  • #77147

    katy
    Spectator

    Just throw another factor in. During the last crash there were a lot less properties on the market. I do know personally a few people who have withdrawn their properties on sale as they are not prepared or don’t need to take a cut. There must be many more who I don’t know who have done this.

    The usual bargains happen through death, divorce and ill health. One sold on my street. a Norwegian getting divorced, he was prepared to drop the price to what he paid 3 years before (although he also paid an inflated price in my opinion). He sold fairly quickly to the agents brother!!

    I saw a report re. Florida in which it states that the average time to sell a proerty is now 112 days, not as bad as Spain where it takes 2 or 3 years! It also state that the listings are down and many sellers have withdrawn!

  • #77154

    Anonymous
    Participant

    There are several reasons as to why second homes are purchased which can range from finding work away from home, as a buy to let investment and as a vacation home. There is also a congruence in the relationship between holiday homes and retirement homes. Many people retire to where they habitually go on holiday. This is particularly true if for example they become members of golf clubs and integrate with an international community who all share the same passion for their chosen lifestyle.

    At some stage in this process the primary home is sold and the second home becomes the retirement home, there is no further purchase of a home abroad. Many of those who are thinking of retiring to Spain have already purchased the property they will ultimately retire to and the expectations that millions of northern Europeans are going to buy retirement homes in Spain are unfortunately optimistic. Many retirement homes have actually already been purchased and will be morphed from holiday to retirment home.

    When borrowers come under pressure from the banks and can’t sell their holiday home to raise finance, they may be forced into selling their primary home, and can then afford to take the second home off the market. Others are more fortunate and can continue servicing their loans and some will re negotiate their loans or move from one lender to another. Carefully investigate as to why homes have been taken off the market. Also consider that the supply of homes may still increase and market conditions may still deteriorate.

    This forum has been instrumental in helping us all to understand some of the complexities of a property market and how speculation can distort the market in such a way as to defeat even the most respected analysts in Spain. I feel that this has happened and that the reality of where the market is has not yet been understood or accepted.

    If we return to Marks question, soft landing or train wreck, I freely admit that I have voted suggesting a train wreck. By definition a soft landing requires some form of stability in the market or better some form of recovery. The gradual deterioration we have witnessed to date reflects the time it takes for banks to decide when to tighten credit and when to start the foreclosure process. So initially the pain will be gradual and there will be some misguided bargain hunters, thinking that the market will not deteriorate further, who buy. The wise will wait in the knowledge that a rising tide lifts all wrecks but when the tide goes out the hulls come into full view and reveal the true state of affairs. Avoid the peaks and troughs for these moments in the market are for speculators, wait until the tide comes in again before buying. There is no point in selling well to buy badly. If you have been fortunate enough to sell, keep your powder dry, keep your money on deposit, however boring that might be as there will be some spectacular opportunities, when all this blows over.

  • #77155

    Inez
    Participant

    Wise words and well written. I voted train wreck, the soft landing started 4 years ago – now we are tumbling towards the edge with no way to stop!

  • #77160

    Anonymous
    Participant

    I agree with Inez, well written by an eloquent speaker.

  • #77161

    Anonymous
    Participant

    Trainwreck

  • #77165

    Anonymous
    Participant

    Thank you for your kind words. Again and again one gets that moment of intuition, that sudden vision of how the market is falling into chaos around us. Ideas and principles that have never been challenged in centuries are questioned for the first time. Whilst everything we have been brought up to accept falls around us, I felt that I had to strike out alone into a new future and seek for myself the unprecedented pattern of adventure in my own life. There is no security or faith left anywhere in the Spanish property market. All Spain is being swept into ruin and dissolution as never before; the very pillars of Spain are falling. I have left Spain.

    Success in business is pre-eminently the art of the man who dares take the risk; of the man who thinks deeply and clearly; of the man, who when accident intervenes, is not thereby cast down, but changes his plans and disposition with the readiness of a resolute and reflective mind, which so far as is possible has foreseen and provided against difficulties.

    I write as a retired infantry soldier, who before committing himself and his men to battle was taught to think deeply, to plan carefully, and to overcome fear. But above all to respect authority and only to challenge it in a carefully thought out and courteous manner. Making your point when you are able to convince others that they are wrong. Above all remembering that the pen is mightier than the sword, and if you succeed in reaching mens hearts and minds they will follow you. Ladies and gentlemen, train wreck.

  • #77166

    Anonymous
    Participant


    Bernard, what a gift to this forum you are with ‘speeches’ like that…..you could lead me into battle any day!

    I must admit though, when reading the first paragraph I felt you could have easily been writing about the state of England rather than the state of the Spanish property market.
    Reaching for my helmet now, ducking after I’ve made my morning coffee.

  • #77168

    Anonymous
    Participant

    I must admit though, when reading the first paragraph I felt you could have easily been writing about the state of England rather than the state of the Spanish property market.

    I couldn’t agree more Charlie after listening to the news this morning! πŸ™ I thought what an awful place for my grandchildren to grow up in. If it were not for our own selfish feelings, we would encourage our children to find a much better life in say Australia or New Zealand or maybe Canada.

  • #77169

    katy
    Spectator

    At least in canada , New Zealand etc. the Brits can get a real decent paid job. That is almost impossible in Spain.

    There used to be about 6 guys, all estate agents who played golf regularly at my golf club. During the past few months they have all drifted back to the UK.

    I cannot see how a crash can be avoided, just not sure how low prices will drop. I do see “reductions” but they are not “real” reductions. Just reductions on pie in the sky prices.

    To add to the general downturn and overbuilding, there is now a low pound to Euro exchange rate and bad publicity such as the sad case all over the UK papers yesterday. As someone said (Mark?) it isn’t cheap to live here anymore. People don’t realise unless they live here all the time, its different when you are only visiting occasionaly. A friend who moved out last year said this week that he hadn’t budgeted for the high cost of sundries. I did notice yesterday that a packet of butter was 2.87 euros which works out at cerca 2.22 pounds! Not sure what it is in the UK but I don’t think it is as high!

  • #77170

    Anonymous
    Participant

    I was shocked to see butter that was approx 96p go to Β£1.06 before Xmas. I don’t usually note prices of core shopping but I commented on the rise to the checkout lady! It’s all down to the weather! What isn’t? πŸ™„

  • #77174

    Anonymous
    Participant

    It is not only Spain where food prices are rising I would guess by the end of 2008 food inflation in the UK will be around 15%. In the last 6 months cereals have risen by 90% Milk by 30% (hence your butter prices) meat products have still to rise but rise the will along with eggs and vegetables. The era of cheap food is coming to an end.

  • #77180

    Anonymous
    Participant

    Brown and Darling say you should stop worrying about inflation its only on stuff like Basicslsay Bread, Milk, Eggs, Butter, Meat, vegetables, petrol oil gas electricity train fares etc the cost of plasma TV’s and Ipods is dropping.

    Inflation in the UK is 2% so they are begging the MPC of the BOE to drop I/R this comming years, as they know the UK economy requires cheap debt to function!

    oh dear!

  • #77183

    Anonymous
    Participant

    Today I passed a garage where diesel was 114p per litre!!!
    Yup, plasma screens are a snip. πŸ˜‰ My son just bought a Sony 42″ one last week-end for a mere Β£899 😯 ( He paid cash! )

  • #77188

    Anonymous
    Participant

    This is an important announcement. The train coming into platforms 1,2,3,4,5 and 6 is coming in sideways. Mind the gap.

  • #77193

    Anonymous
    Participant

    Katy hello. DonΒ΄t despare over the price of butter. Mercadonas Spanish butter cost about 1 Euro and is delicious πŸ˜€

  • #77240

    Anonymous
    Participant

    Train-wreck or soft landing a mixed metaphor surely.

    To be harmed in a train-wreck you have to be either on the train or at the collision site. I like many others (I would suspect) only have a passing interest in this possible train wreck. We bought what we could afford and intend to enjoy what we have without worrying about its current value (prices are falling on 42″ plasma TV’s all the time.) I guess we have to know how many are on this train (owners) and how many are at the wreck site (estate agents, etc) to understand how many will be harmed the fact that only 43 have voted is indicative i feel.

    Unless our circumstance change in the short term (two yesrs or so) it will be a soft landing for me.

    Regards

    Paul

  • #77244

    Anonymous
    Participant

    I know there are some horredous buildings along the 340 and has always wondered if anybody ever would buy there. These places, I am sure, will have to be drastically reduced if they will ever be sold. Having said that, there are some wonderful and beautiful places in Andalucia where many would like to live. I, for one, live just ten minutes from the coast and am surronded by lovely nature and no ugly buildings or cranes in sight. I would not change it for the world. Price correction, yes, but I donΒ΄t believe it will be a crash. Life here is wondeful and the climate is also an important factor that people will be looking for.

  • #77245

    Anonymous
    Participant

    Dear Paul

    If you have purchased what you can afford to have and enjoy then unless there are changes to your personal circumstances, you and others like you will comfortably weather this storm. You are neither on the train nor on the platform.

    This year estimates suggest that there will be 450,000 new builds in Spain and that the construction industry will contract by 50%. This will de-rail the Spanish economy, and it is this bigger picture which is of concern.

    The train wreck is Spain.

  • #77248

    Anonymous
    Participant
    Bernard Hornung wrote:
    The train wreck is Spain.

    Add to this: Cyprus, Italy, France, Greece, Turkey, Baltic Countries newly admitted to EU and the Anglo-Saxon countries around the world.

    Sorry if I forgot some countries.

  • #77252

    Anonymous
    Participant

    Ralita
    100% agree and to that we could easily be adding the U.K as reports are that our financial situation is the worst in Europe. πŸ˜₯

    Frank 8)

  • #77254

    Anonymous
    Participant

    Dear Benard

    The train wreck is Spain

    This may be a wise prediction, I am referring to the topic of the thread and of course the poll itself ” Spanish property market 2008: soft landing or train wreck?” If you believe that property and the construction industry alone will cause the Spanish economy to crash personally I think it’s more complex than that.

    Regards

    Paul

  • #77256

    Anonymous
    Participant

    Dear Paul

    Spain failed to sufficiently diversify its economy and became over reliant on the construction industry and tourism. The immediate outlook is of concern as 500,000 people in Spain will become unemployed this year with no prospect of finding a job. Many of these people are the people who have been buying their house, their motor car and contributing towards the consumer economy.

    What will save Spain will be tourism and this will grow substantially but its positive effects will take three or four years to be felt. Those of you who have wisely purchased in the countryside, in villages and in thriving mixed use communities, and who have kept well away from the coastal resorts will continue to enjoy your lives as before and will for the most part be unaffected by the economic downturn. You may even benefit as prices of goods and services drop.

    Those who have bought at the lower end of the market in single use coastal resorts are the more vulnerable and here the outlook is not good. The worst affected will be those who have purchased off plan into schemes in the middle of no where, and the very unfortunate who have purchased into schemes where matters have gone wrong, such as bankruptcies and illegal projects.

  • #77257

    Anonymous
    Participant

    Dear Bernard

    I acknowledge your view, yet it is my belief that the macroeconomics of Europe is a lot more robust than you portray. I have no doubt we are heading for times (economically) worst than we have had in the last 5 years or so. To predict a train crash i don’t think so, more like a soft landing on all fronts and nothing I’ve read here so far is sufficiently compelling to change that view.

    As for the 500,000 unemployed, social marginality is a great motivator for economic diversification (think of the UK post miners and steel workers) and if that what it takes, utilitarianism rules OK!

  • #77260

    Anonymous
    Participant

    Bernard Hornung: I have been reading your post with interest, in most cases you have spoken to the point without going into macro ecomonis, graphs, indices etc. I agree that

    ” Spain failed to sufficiently diversify its economy and became over reliant on the construction industry and tourism. The immediate outlook is of concern as 500,000 people in Spain will become unemployed this year with no prospect of finding a job”.

    I have raised this very subject on the forum in one form or the other and at times gone into historic, cultural and other social reasons.

    I however do not agree on

    “What will save Spain will be tourism and this will grow substantially but its positive effects will take three or four years to be felt.”

    Spain, today or in three years from now will not be the cheap destination which brought its tourism Industry benefits. Apart from travel habits have changed and package holidays are and is going to be a thing of the past.

    The country is expensive, quality/value for money is not there. The cost conscious/mass tourist will be and is already travelling to Turkey, Bulgaria, Croatia, Morocco, Egypt etc.

    Only the cultural travellers who are their for museums, Alhambra, Mezquita
    Aranjuez are not going to be sufficient.

  • #77261

    Anonymous
    Participant

    Dear Paul

    I still feel that the train wreck will be the Spanish economy hence my decision to leave Spain. I do agree with you that the European economy is sufficiently robust as to provide for a soft landing but I do not think that this will include Spain.

  • #77269

    Anonymous
    Participant
    shakeel wrote:
    “What will save Spain will be tourism and this will grow substantially but its positive effects will take three or four years to be felt.”
    Only the cultural travellers who are their for museums, Alhambra, Mezquita
    Aranjuez are not going to be sufficient.

    I am also not sure how tourism in Spain can still grow substantially.
    I think that better beaches can be found almost anywhere else.

    For British people, one big advantage of Spain is the vicinity to UK and the existence of cheap flights. As long as I can find 20 Pound/round trips, I shall always prefer Spain for last minute trips.

  • #77271

    katy
    Spectator

    It said in Last weeks Sur in English that Spain is now the most expensive country in the world for golfing holidays. I don’t have any figures but I feel as though tourism has been down for at least the past two years. I know Spain always claims (who believes Spain anyway!) they are up but there is certainly less people around. More Hotels are closing for the winter too.

    Compared with other countries such as Turkey, Spain has a better long term prospect. Exactly the same is happening now as happened in the early 90’s, in addition to the construction crisis there is rising prices and indifferent service. If I were living in the UK I woud go to Greek Islands this year. At least they know how to smile!

    Not sure about a crash, as I said many owners can sit it out. Probably something in between, not with “soft” in the term.

  • #77272

    Anonymous
    Participant

    Once Spain crashes, and it will, prices will come down and tourism will once again begin to recover. You have to consider where Spain will be in three to four years time, and not where it is today.

    I now live in a country where this happened four years ago and I see for myself the adjustments which have had to be made. A round of Golf on a Championship Golf Course for 45 Euros, and the golf course is still empty.

    Despite all our criticism of Spain, it is after France, a major tourist destination and the sunshine helps tremendously. I agree that sadly many coastal areas have been ruined. When the Chinese start travelling there will be a huge growth in tourism to Europe and I am optimistic that this will soon be the case.

    My scenario is an outright crash, in both the Spanish property market and in the economy, followed by a recovery in about three to four years from now. Spain is a country of extremes and so expect this to happen.

  • #77275

    Anonymous
    Participant

    Dont see Spain crashing like some people do

  • #77276

    Anonymous
    Participant

    I can only assume that you are neither a professional investor or accountant then?

  • #77277

    Anonymous
    Participant

    @mg wrote:

    I can only assume that you are neither a professional investor or accountant then?

    The same doom and gloom merchants that have been predicting a UK housing market crash for the last 3 years.

    Spain has a two tier housing market, the Spanish well off and International market and the local market. Some Spanish have 2nd and 3rd homes

    The local market will obviously be effected if there is a down turn but the market that effects most english wont be IMO.

    It might come to a standstill but most of those owners will just sit it out, there will also be some bargains from the people who have overstrechted themselves and the bank steps in and some people will make money out of this situation in the medium to long term.

    There is no doubt the local business people of Marbella & Nueva Andalucia are tightning their belts for this year but Im pretty positive of the overall outcome for the international market anyway

  • #77280

    Anonymous
    Participant

    Ralita πŸ™‚
    The results from the pole are speaking for themselves.
    This is a forum that by nature are for negative postings and there appears many that do not share the doom and gloom merchants opinion and try to take a short,medium and longer term view .
    Of course its not good short term unless you are looking for a bargain but the 30%+ fall predicted to happen in 2007 didnt appear to heve happened.
    Reports in Sur stated that prices rose last year so what do we believe.?
    Yeh I know πŸ‘Ώ NOT THE REPORT IN SUR. πŸ˜‰

    Frank 8)

  • #77281

    Anonymous
    Participant

    Senor Nick, what is your point?
    Also, you state “The same doom and gloom merchants that have been predicting a UK housing market crash for the last 3 years.”
    As you are obviously not a professional in the property market, try taking a look at such sites as http://www.propertysnake.co.uk
    There again, perhaps you will refuse to believe what is apparent again.

    “Spain has a two tier housing market, the Spanish well off and International market and the local market. Some Spanish have 2nd and 3rd homes”
    Much like UK then.

    “The local market will obviously be effected if there is a down turn but the market that effects most english wont be IMO.”
    A joke and unrealistic.

    “but most of those owners will just sit it out, there will also be some bargains from the people who have overstrechted themselves and the bank steps in and some people will make money out of this situation in the medium to long term”
    The majority then?

    “There is no doubt the local business people of Marbella & Nueva Andalucia are tightning their belts for this year but Im pretty positive of the overall outcome for the international market anyway”
    Wish you would spread the knowledge base you have with all.

  • #77282

    Anonymous
    Participant

    Just Frank says “This is a forum that by nature are for negative postings and there appears many that are many that do not share the doom and gloom merchants opinion and try to take a short,medium and longer term view”
    My comments may seem negative, but this is for a general opinion, whilst my own situation as an investor is that I look forward with delight to the next 1 to 2 years, as consider it will be a good, if not superb time to buy. It may be that many will suffer, but when there is suffering, there can also be gain by others. It is called business.

  • #77284

    Anonymous
    Participant

    For those who think im an unrealistic comedian lets see where were at come the end of 2008.

    It might be painful but nowhere near as bad as some people are predicting.

    Lots more agents will go bust because there is far too many anyway, over supply and all that but the small, ethical and professional agents with low overheads will be in a very good position when the market turns back. Just hope the new succesful agents dont then go and make the same mistakes as Interreality, Viva & ADH when the good times come.

    Anyway lets revisit this thread later in the year when we will see where were at

  • #77285

    Anonymous
    Participant

    m.g
    I fully understand that this is your genuine opinon and is indeed share by many including me if I keep reading and considering just the negatives involved.
    It appears at times as though views are such that it is the will to see a crash so as to have an interesting debate.
    However as can be seen on the poll results confirm I admit I do try to look at the positives.(I am amazed how close it is when reading the threads).
    Senior Nick summed in up that there will be many that will loose in the short term and as you point out there may be winners and thats business.
    The basics (apart from the corruption) are still the same for many that purchased in the first place.
    Many will simply have to take a longer and less of a financial viewpoint and those that were in it the money will loose short term or will have to take a much longer view.(your an investor so you will know what I mean)
    May not be a bad time to look at Banks. πŸ˜‰
    As I have said many times only few are not effected by this whole sham but in the end it will be time to move on.

    Frank 8)

  • #77286

    Anonymous
    Participant

    “For those who think im an unrealistic comedian lets see where were at come the end of 2008”
    But waiting until the end of 2008, to see who was right and who was wrong, could be too late for many and mean financial disaster.
    Look for the trends and statistics now, or if you choose to wait and see what happens in say 6 months time, don’t come crying if you have lost.

    “It might be painful but nowhere near as bad as some people are predicting”
    Try telling that to someone who maybe even today is sitting in front of their Bank/Building Society manager, and trying to convince them that it is worth them trying to keep them afloat.

    “Lots more agents will go bust because there is far too many anyway”
    It’s called business and the same can be said about the local shop, garage, taxi, bar…………………

    “Anyway lets revisit this thread later in the year when we will see where were at”
    OK let’s, but in the meantime, I will still do what I consider best, based on trends, markets, expert opinion, etc. and not wait for another 12 months just to prove a point. If in 12 months things aren’t as bad as many predict, then it is a bonus.
    Rather have a bonus, than expect things to be so-so and in 12 months take a hit.

  • #77287

    Anonymous
    Participant

    m.g πŸ™‚
    Thats the point I am trying to make and perhaps Senior Nick

    Last January and the one before some were saying the same as you are now.
    Yes it may very well happen in Spain.Greece,Cyprus.U.K etc and is the forcast of many,including me at times,however the many keep getting it wrong.
    Yep it may get very tough but as the pole shows the balance between a crash and a soft landing has a remarkable close result.

    Frank 8)

  • #77288

    Anonymous
    Participant

    its obvious that its a terrible time to sell and a fantastic time to buy at the right price

    Its also obvious the exchange rate is the icing on top of the cake at the present time.

    Its also my experience that the majority of people will just sit out the storm and some people who have got into financial problems will be affected and may not be able to realise the full value of their assets.

    There will be good bargains to be had for people who have got money and know what they are doing.

    Obviously some people on here are vastly more clever than I am and know everything thats going to happen and are obviously vastly more intelectual than someone like me who is only expressing his own opinion.

    I also believe it ok to have an opinion that differs from someone elses even if you dont agree with it

  • #77289

    Anonymous
    Participant

    @Just Frank wrote:

    m.g πŸ™‚
    Thats the point I am trying to make and perhaps Senior Nick

    Last January and the one before some were saying the same as you are now.
    Yes it may very well happen in Spain.Greece,Cyprus.U.K etc and is the forcast of many,including me at times,however the many keep getting it wrong.
    Yep it may get very tough but as the pole shows the balance between a crash and a soft landing has a remarkable close result.

    Frank 8)

    For what its worth I think its somewhere in between the two.

    I also think around April time is when investors will start to be able to pick up real bargains. i know certain developments that have recently completed and 4 months of no sales will start to focus there mind on price.

  • #77290

    Anonymous
    Participant

    “the pole shows”
    Do you really think that when 45 votes cast that it is sufficient to influence spendin/selling of 200.000. 300.000, ……..?

    “a fantastic time to buy”
    Not yet.

    “not be able to realise the full value of their assets”
    Negative equity, as many of a certain age group will be only too aware of in UK.

  • #77293

    Anonymous
    Participant

    m.g πŸ™‚
    No. But an opinion of the 40 or so is better than an opinion of 1 ?

    Frank 8)

  • #77294

    Anonymous
    Participant

    Even if the entire 40 have been conned, caught, lost their money, have purchased an illegal build, have bought off plan but have no property after a couple of years?

  • #77296

    Anonymous
    Participant

    We keep coming back to micro markets and to personal situations, which proves my point of how the residential property market is made up. I am not an accountant and perhaps without any professional qualifications other than having graduated from The Royal Military Academy Sandhurst.

    However my comments are based upon real and recent experience in the Spanish property market as well as being half Spanish and having a closer understanding of their culture and ethics.

    I once worked for a developer who before going to the bank to secure development finance “sold” over 50% of the apartments off plan to himself with very small reservation deposits, and putting his firends and family down as the buyers. The bank was so eager to lend the money that no proper due diligence was conducted. The loan was secured and now no single “purchaser” can complete nor have there been any further sales.

    I believe that the point you are all missing is that you are in Spain, and few of you have been in on the inside track of what is happening and what has happened at the coal face of this industry in the last 20 years. I have and I know that the reason I have voted for a train wreck is that there has been an awful lot of creative business and no doubt creative accounting too. So do be very careful about applying common sense to this particular debate as that and the statistics being analysed are far removed from reality.

    I now live in the poorest country in Western Europe, and I can offer you properties from 15,000 Euros which 4 years ago were on the market at 100,000 Euros. Perhaps there are not worth anything at all, and if any of you wish to see this for yourselves, drive west from Spain. Yes outright property crashes and economic crashes do happen, they do exist and one is right on your doorstep. Spain is next. Germany went through it after unification, and there are many other examples.

  • #77297

    Anonymous
    Participant

    “a developer who before going to the bank to secure development finance “sold” over 50% of the apartments off plan to himself with very small reservation deposits”
    Wasn’t this the norm to sell to subsidiaries, families, etc?

    It is unfortunate that such information has been wideley available for many years, but if you state fact, many shoot you down, or claim you are spreading doom and gloom.
    I am aware of instances where re-sale prices were fixed until the development was complete, that is with the exception of the subsidiary owned, which could drop the price to off-load if need be. So where does that leave others when they are trying to sell x% higher.
    Must say though, that this happens in other Countries, including UK.

  • #77298

    Anonymous
    Participant

    I believe that as the market began to contract after peaking in November 2003, it was. Hence many of the statistics from that date onwards are downright misleading. This malpractice continued to pump up the price of property for another few years, increasing the gap between the real and, if any, market value of the property and the price at which the “sale” was recorded. Spain is now cluttered with properties that nobody needs or wants, the banks provided the finance, and the developers and speculators have been left with soemthing they cannot afford to hold onto.

    If this was limited to a few individual cases then the market and indeed the economy could comfortably weather the storm, but the problem extends to several million properties all over Spain. It has also been exacerbated by the fact that many Spaniards were speculating in property only recently and several have borrowed so much money that they are on the brink of negative equity on both their primary homes as well as on their second homes, because the valuations on the properties they bought were grossly inflated in order that they could secure a higher LTV.

    If interest rates rise in the Eurozone by more than one half of a percentage point this year, it is estimated that over half of all Spanish homeowners will not be able to meet their mortgage repayments.

  • #77304

    Anonymous
    Participant

    Lets see who is right at the end of 2008. I am sorry to say that this kind of statement is very childish.

    Who is wrong or right is not the issue. In the end it is some ones life time saving, pension and emotions. We seam to be forgetting this.

  • #77310

    Anonymous
    Participant

    Dear Shakeel

    I note that you are uncomfortable with my remarks. This is a debate and I make my points based upon the information and the opinions I have, without being blurred by emotion. Do be aware of the strenous efforts being made by Spain for the ECB to hold interest rates where they are.

  • #77316

    Anonymous
    Participant

    I must admit that reading these posts I sometimes wonder if I own property in the same country!

    I have a property in Almerimar and the description of unwanted and undesirable properties is certainly not the case. The local council have taken great care in planning the development of the resort and with the exception of one development all complexes are, in my opinion well designed. I am sure there are many other resorts that are similar and the description of poorly designed complexes is I would suggest the minority rather than the majority.

    I would estimate that the vast majority of the apartments in my complex are second holiday homes with very few rented out. That also applies to my apartment. Ownership is almost exclusively Spanish.

    Now I accept that there any many properties that have been bought for investment, but also many have been bought as second homes, with no intention of renting or selling on.

    How this affect the market, I have no idea, but I thought it was worth posting an alternative view to most of the negative comments about the standard of recent development and why properties may have been purchased.

  • #77317

    katy
    Spectator

    That may be your view of Almerimar but I think it is an overdeveloped hotch-potch. Plus it was full of flies when we stayed their.

  • #77318

    Anonymous
    Participant
    jp1 wrote:
    I
    How this affect the market, I have no idea, but I thought it was worth posting an alternative view to most of the negative comments about the standard of recent development and why properties may have been purchased.

    I have been in Murcia and Almeria. I have seen only a few good developments which deserved their price.

    The rest were worth maybe 50K-60K for 2 bedroom apt. not the 150K-250K that people asked.

  • #77319

    Anonymous
    Participant

    I would not like to hear your thoughts on other areas then, for if you consider Almerimar over developed when the majority of the bay has only 2 lines of development !!!!!

  • #77321

    Anonymous
    Participant

    Bernard: I am not uncomfortable with your remarks at all. Like you I form my opinion based on my knowledge of the Country, its people, commercial or otherwise. My views are also based on a non emotional basis and on years of travelling to the Country.

    Perhaps as an ex/army guy you are use to aye, aye Sir and not people not seeing your way.

  • #77322

    Anonymous
    Participant

    Guys,

    Lets be objective now. There is no way any reasonable 2 bed, costal apartment within a few minutes walk of the beach ( and I mean a few minutes) is ever going to be 50~60k.

    The wealth of countries like Spain have increased considerably over the last 20 years.

    Could you buy a 50K (Β£35k) 2 bed apartment in the UK!!! That was new!!

    So why should it be different for Spain. There will never be that disparity between modern EU countries as the wealth slowly but surely equalizes.

  • #77323

    Anonymous
    Participant
    jp1 wrote:
    Lets be objective now. There is no way any reasonable 2 bed, costal apartment within a few minutes walk of the beach ( and I mean a few minutes) is ever going to be 50~60k.
    The wealth of countries like Spain have increased considerably over the last 20 years.
    Could you buy a 50K (Β£35k) 2 bed apartment in the UK!!! That was new!!

    UK does not have 4 million empty properties. So you cannot compare.

    Compare Almeria with Arizona, Nevada or New Mexico. Those states have millions of properties that nobody buys. And I am talking $150K 3 bedroom houses in Las Vegas or Phoenix. They are much better than a
    50K ($75K) Euro 2 bed apt. in the Spanish desert.

  • #77324

    Anonymous
    Participant

    Dear Shakeel

    I acknowledge and respect your views, without asking you or indeed anyone else to accept mine. What I have put forward I have done so in all sincerity. My army days have long passed me by and as I have written before on this forum the pen is mightier than the sword.

    Where I am now I am approached by several investors, some of them Spanish and some of them from Spain. From what I read and from what they have divulged to me and from what I can see going on I have put forward my own thoughts. I remain firm on what I have written and on my current views. There is no compulsion whatsoever for anyone else to agree.

    Four years ago the country which I am in now went through the same painful process and both the property market and economy collapsed, but it is a smaller country and the scale of the collapse more or less contained. However there is no immediate recovery in sight, other than in a few selected areas where there is demand.

    My views are that the growth in both the Spanish property market and indeed in certain sectors of the economy has been fuelled by excessive debt. Colonial collapsing with three times the debt of its assets is just one example. This situation has been allowed to continue for too long as those who were personally indebted or who placed their own firms into debt, believed that the market would continue to rise and that their assets would grow in value, so as to comfortably enable them to meet their obligations and to work within the regulatory framework.

    The risk they all took was that the market would keep on rising, and evidence suggests that from November 2003 the number of genuine buyers began to contract. We then entered a period of unacceptable business conduct on a scale which has thrown even the most respected analysts into confusion with false sales to subsidiaries and to family, with sales to speculators who misjudged the market, and house prices continued to surge. Rather like the wedding feast at Cana, the good wine was brought out last.

    As so often happens before an outright crash, you get that final peak in the market, and then you have the eager bargain hunters who come in too early providing another false dawn and hopes rise. This was last summer. The stage we have now arrived at is one where bankers and analysts are coming to terms with reality and are having to take action.

    2008 will be the year when banks return to responsible lending, and start to foreclose on non performing loans. The combination of indebtedness both at a personal and corporate level, a tightening of credit, a lack of liquidity and a falling property market with millions of homes which nobody needs or wants, plus with another 450,000 to 490,000 new starts estimated this year, has to be an uncomfortable situation on its own. Add to this that 13% of Spanish GDP is derived from the construction sector and the ripple effect its contraction is going to have upon a highly geared and heavily indebted economy with a falling property market, and you will begin to understand the arguments which I have put forward.

  • #77331

    katy
    Spectator

    Hi Bernard, being cynical I feel a sales pitch coming soon…you have been grooming us. πŸ˜‰

  • #77334

    Anonymous
    Participant

    Bernard, What country do you live in now?

  • #77337

    Anonymous
    Participant
    Bernard Hornung wrote:
    2008 will be the year when banks return to responsible lending, and start to foreclose on non performing loans. The combination of indebtedness both at a personal and corporate level, a tightening of credit, a lack of liquidity and a falling property market with millions of homes which nobody needs or wants,

    This is valid for any country in 2008. In USA it started in Fall 2006 but they are always 18 months ahead. They are already in recession, Spain and UK will follow this year, maybe Germany will be the only country spared as they did not base on credit flooding.

    It will be nasty, the house price crash will be the least of the worries.

  • #77340

    Anonymous
    Participant

    Dear Katy

    If I let you know that I left Spain with several million pounds less than when I arrived, you will have some understanding why I care about others not making the same mistakes which I made.

    I remain a property developer and in the property market, but I am now wiser and richer for the experience and it is my own experience which I share with others.

    As for a sales pitch, thankfully where I am right now there is no need as demand exceeds supply.

  • #77343

    Anonymous
    Participant

    Dear Claire

    Mark Stucklin knows where I am and what I am doing and so you must ask him and it must be up to him if he wishes to divulge this information.

  • #77345

    mike
    Participant

    @Bernard Hornung wrote:

    When the Chinese start travelling there will be a huge growth in tourism to Europe and I am optimistic that this will soon be the case.

    You don’t expect the Chinese to come to Europe for beach holidays, do you? They have enough beaches just around the corner in Vietnam and Thailand. There might be more tourists visiting Londonand Paris and Madrid but that will be about it.

  • #77347

    mike
    Participant

    @Senor Nick wrote:

    Obviously some people on here are vastly more clever than I am and know everything thats going to happen and are obviously vastly more intelectual than someone like me who is only expressing his own opinion.

    I was thinking that, it’s hardly intellectual to give an opinion without supporting facts. But maybe I can help you, if you were to provide details of a property with the purchase price and the expected weekly or monthly rent then we could pick apart your figures and help you realise whether they stack up or not.

    @Senor Nick wrote:

    I also believe it ok to have an opinion that differs from someone elses even if you dont agree with it

    Yes, it is. However, complaining that others are taking an unfair advantage by being more intellectual and knowledgeable is whiny and annoying.

  • #77349

    Anonymous
    Participant

    @Bernard Hornung wrote:

    I now live in the poorest country in Western Europe……..and if any of you wish to see this for yourselves, drive west from Spain.

    A couple of clues from this very thread, for those participating in the ‘I wonder where Bernard now lives’ game!!

    He is a tease isn’t he?!!!!

  • #77351

    Anonymous
    Participant

    @iano wrote:

    @Bernard Hornung wrote:

    I now live in the poorest country in Western Europe……..and if any of you wish to see this for yourselves, drive west from Spain.

    A couple of clues from this very thread, for those participating in the ‘I wonder where Bernard now lives’ game!!

    He is a tease isn’t he?!!!!

    You can’t drive “West” from Spain since you’ll be in the ocean. Azores is first landfall due west from Spain.

  • #77352

    Anonymous
    Participant

    There are many different types of tourism and the seasonal rush to the beach is not going to attract the Chinese to Europe. Historical, cultural, adventure and sporting tourism combined with busness conventions and business travel is the pattern more likely to emerge. Other than those areas which have been spoilt by overbuilding, Spain remains an attractive country, rich in culture and tradition and the Spanish are the masters of having fun.

    I envisage Spain becoming more competitively priced than it is now and benefitting from the expected growth in tourism to Europe. Clearly it is unlikely that Spain will be able to compete with places such as Hainaan Island, the Chinese billionaire turf. Also you are correct to point out that capital cities will be the places most tourists will wish to visit. That in itself will help the Spanish economy.

  • #77356

    Anonymous
    Participant

    @MrBen wrote:

    You can’t drive “West” from Spain since you’ll be in the ocean. Azores is first landfall due west from Spain.

    Surely it depends where you are in Spain, but for the most part (even if you are as far south as Seville), point your car due west, start driving and you’ll hit Portugal.
    Well you do according to the little compass in the top right corner of the map below.
    http://www.paradoxplace.com/Photo%20Pages/Spain/Spain%20Map%20Images/map-spain.jpg

    Maybe Bernard caught a banana boat from Lisbon and is in Madeira? πŸ˜‰

  • #77358

    Anonymous
    Participant

    @Bernard Hornung wrote:

    Spain will crash….The outlook for Spain could not be worse….The market has crashed…the very pillars of Spain are falling….Ladies and gentlemen, train wreck….The train wreck is Spain…..Once Spain crashes, and it will

    @Bernard Hornung wrote:

    As for a sales pitch, thankfully where I am right now there is no need as demand exceeds supply….other than in a few selected areas where there is demand

    @Bernard Hornung wrote:

    I can offer you properties from 15,000 Euros which 4 years ago were on the market at 100,000 Euros.

    @Bernard Hornung wrote:

    Above all remembering that the pen is mightier than the sword, and if you succeed in reaching mens hearts and minds they will follow you.

    Well Bernie has convinced me, my bag’s packed!

    Anyone else for “Madeira”? πŸ’‘

    πŸ˜€ πŸ˜€

  • #77359

    Anonymous
    Participant

    Drive west from Spain and you hit either Galicia in the north, or further south you will find Portugal.

    Portugal is the poorest country in western Europe where the minimum wage is 380 Euros per month and there are families struggling to live on combined incomes of 760 Euros per month in the Alentejo.

    If any of you wish to come face to face with poverty on a depth and scale that you never imagined possible in a western civilized country you will find it here.

  • #77363

    Anonymous
    Participant

    Bernard πŸ™‚
    Have you been to Torquay lately πŸ™

    Frank 8)

  • #77364

    Anonymous
    Participant

    @charlie wrote:

    @MrBen wrote:

    You can’t drive “West” from Spain since you’ll be in the ocean. Azores is first landfall due west from Spain.

    Surely it depends where you are in Spain, but for the most part (even if you are as far south as Seville), point your car due west, start driving and you’ll hit Portugal.
    Well you do according to the little compass in the top right corner of the map below.
    http://www.paradoxplace.com/Photo%20Pages/Spain/Spain%20Map%20Images/map-spain.jpg

    Maybe Bernard caught a banana boat from Lisbon and is in Madeira? πŸ˜‰

    You’re quite correct, I was looking at a Google Earth map and omitted Portugal altogether. Oh Dear. Still, at least we now know where the mysterious fellow claims he resides: Portugal.

  • #77365

    Anonymous
    Participant

    Mark Stucklin knows where I am and what I am doing and so you must ask him and it must be up to him if he wishes to divulge this information.

    Mark Stuklin knows where I live too Bernard. He also knows my telephone number. I would hope that he would divulge neither!! πŸ˜‰ Therefore I would not bother to ask him.

  • #77366

    Anonymous
    Participant

    Why is it so important to find out where Bernard lives? Is it really that interesting?

  • #77369

    Inez
    Participant

    A thoroughly interesting debate and thread. On the whole I totally agree with you Bernard.

    I have been involved in psoprty for 24 years now my first position was working for a developer whp went to all the large uk auctions (before everyman became aware of them) This was in the UK. I have been coming to Spain since then as well – my parents have owned here for 30 years, so I have an interest all around.

    I never wanted to beinvolved in the heady sales of the off plans as it was all hype and lies, so went into property management and rentals, which was good until around 5 years ago for various reasons.

    In autumn 2003, after driving back along the coast from Banus to Fuengirola where Ilived, I became even more aware of all the properties in process of building and having worked for a very short time in one large agency, I was aware that around 70% of the buyers were investor/speculators and most would want to flip on.

    It didnt take a genious to see there would be a lack of secondary buyers around and that there would be a surplus, alongside the 4 following years when builders would be breaking ground after selling off plan! So, already seeing a reduction in rental rates due to not only over supply of stock but a lack of clients as many had bought their own properties, I thought there would be a niche in the market for the seller who having over committed, would need to get rid of very fast. Hence starting the auctions in early 04.

    We cut our fee and ensured total transparency, but it was interesting how we were thought of as idiots as the ‘market’ was still rising, and indeed there were still thousands jumping on the bandwagon and buying more units.

    The first auction saw 1 sale – we had properties cheaper than anyone else but mainly as our fees were lower and owners refused to bring them down! Over time we have built a reputation and now I get owners listening to me. For a while it was hard to get them to drop their price and from 04 it has been a slow gently roll downhill – I did in truth expevt it to follow the uk late 80s early 90s scenario and drop like a stone. But there are totally differing factors and I seemingly misjudged this. However, now with 4 years behind me, people listen.

    We are now getting owners who after being told what we would accept for a reserve and who refused, are now coming back deserate to get into auction. Unfortunately they are now being told last years price is too high and they have to drop more.

    I confidently tell them this as I know that while they woll go to other agents or privatley try to sell and some will, 80% wont and they come back desperate to get rid.

    Its a shame as then they will have had another 6-9 months of mortgage and community payments – if they had sold at the price I told them before, they would end up with more in their pocket

    And I am getting inundated with sellers, without advertising for them or anything.

    So I do predict train crash, nearer the end of the year and it is definately heading speedily that way from the people I speak with now.

    And I know Portugal has been through the mill, its a beautiful place and last time I went I was amazed at the prices and the happy people!

  • #77370

    Anonymous
    Participant

    This forum must be limited to informed debate, and I believe it has been. I remain in the market and I have commercial interests which must remain outside of this forum. I now live in Portugal and if any of you wish to know what I am doing then I feel it only ethical for Mark Stucklin to decide whether this information should be revealed to you. It would be wrong for me to do so.

    My decision to leave Spain was taken four years ago in November 2003 but my own personal circumstances and various job offers prevented me from leaving sooner.

    The arguments which I have put forward concerning the Spanish Property Market and the Spanish Economy are made in all sincerity and independently from any personal or commercial interests I may have. Moreover what I believe will happen in Spain will also impact adversely on Portugal, and so I am not offering Portugal as a solution for those who are undecided about buying property in Spain.

    I feel that at uncertain times such as these it is best to sit tight and to weather the storm. Now is not the time to be adventurous. It is a time for careful thought and reflection, a time to move slowly and carefully and a time to reduce debt at every level possible.

  • #77371

    Anonymous
    Participant

    Bernard,

    I have to respond to your dignified response, firstly by saying I have thoroughly enjoyed reading your input to this particular thread, and hope you continue posting to this forum on a regular basis.

    Admittedly, as the thread developed I did start to question your motive. But to be honest, whether your aim was altruistic or commercial, mattered not a jot to me. It was a thumping good read regardless!

    My last posting, containing selected quotes of yours, was made purely ‘tongue-in-cheek’ and, hopefully, taken in that spirit. As an ex-Forces man myself, I knew you would be familiar with such banter. πŸ˜†

    Please continue to share your extensive knowledge and experience of the property game..it is much appreciated! πŸ˜€

    IanO

  • #77372

    Anonymous
    Participant

    Dear Iano

    Thank you, and I regret that Shakeel considered one of my comments to be puerile. I can live with that because it is what I believe to be true.

    We must all thank Mark for giving us the opportunity to debate and to exchange our views and experiences, and indeed for setting up spanishpropertyinsight. Pity for me he did not do this 22 years ago.

    For those of us who remain in the market there is a very thin dividing line between using personal experience to add value to the debate, and using this forum to benefit commercially. Inevitably there is the opportunity for both, and if anyone should benefit it should be Mark. This is his initiative.

    We have a moral obligation to help others understand that they are not alone, and that there are a few of us who hang onto old fashion ideals and principles and who do have a genuine wish to prevent more of our fellow countrymen, making the same mistakes we and many others have made in the process of buying property in Spain, and perhaps elsewhere.

    I have been most fortunate in as much where I am now an extraordinary event has recently been announced and an exceptional budget will be spent on its development over the next 10 years. It is estimated that this will lift the economic growth rate of Portugal by one per cent per year. However this is not necessarily the place where people who are looking to buy in Spain would consider ever buying. You have to love horses.

    I have found for myself my own small niche market for an unusual sport which is played by 17,000 worldwide as compared to the 70 million who play golf. This forum is unlikely to help me commercially.

  • #77373

    Anonymous
    Participant

    “I regret that Shakeel considered one of my comments to be puerile. “

    Barnard, no I did not consider your comments as puerile. I just stated that I was not uncomfortable with your comments/views as you saw it.
    Like you I do respect your & other views. some times I agree with them 100% other times less.

    As most of the issues discussed on the forum are in generic terms and at times we on the forum gets out wires crossed.

    I hope that you enjoy your stay in the horses & and cork making area of Portugal. Sorry don’t know the name of the tree. I have been a city boy

  • #77374

    Anonymous
    Participant

    Dear Shakeel

    Thanks, there are no hard feelings, and the reason I have not imposed my views on others is that I know that property market to be so opaque that its analysis might even defeat me.

    We are all skating on ice, but none of us know how thick or thin the ice is in relation to where we are, nor what load it can or cannot take, and if it were to crack we haven’t a clue as to what we might all fall into.

  • #77375

    Anonymous
    Participant

    Bernard, absolutely no hard feelings at all, it will be a sad day if people cannot agree to disagree and impose their views on others.

    On a one to one basis I have always express my views and backed it up with arguments and facts. I do not expect people to take them on board as we all are different and our circumstances too.

    I, remember on my first day at work my boss told me to treat everybody as an idiot. I felt that was not nice and besides very arrogant on his part.

    very soon I understood and saw what he meant. .

  • #77379

    mike
    Participant

    @shakeel wrote:

    I, remember on my first day at work my boss told me to treat everybody as an idiot. I felt that was not nice and besides very arrogant on his part.

    very soon I understood and saw what he meant. .

    Get your revenge in first?

  • #77380

    Anonymous
    Participant

    I believe Bernard was under the mistaken impression that Shakeel’s “puerile” comment in the post immediately following his, was aimed at him, when in fact it was a response to another post made earlier on!

    The dangers of not putting the subject matter in

    >>quotes<<

    eh?!!

    Fascinating reading Bernard’s long-term thinking (4-5 years) about the economy (and the property market by association) should the crash happen this year.

    That maybe, *this* is the time to consider the positives that may arise in the aftermath of a recession. Prices will naturally drop, and this, coupled with the weather/culture/history should make Spain an attractive proposition for tourism once again.

    But, as he makes clear, not solely the N.European ‘lobster’ brigade flocking to the beaches.

    The Chinese have been mentioned. In 2006, approximately 34 million Chinese tourists went abroad. Most of these are currently discovering places closer to home in SE Asia, like Hong Kong and Singapore.

    But there is a huge pent up demand to travel, and with their increasing wealth, exposure to western media, and the lifting of travel restrictions, means the Chinese will be in a position to broaden their horizons and travel farther afield.

    The Chinese are discovering and enjoying sports like golf, horse-riding, ski-ing and sailing in ever increasing numbers. They even play Polo now! They also enjoy watching football, tennis and Formula 1 racing.

    The new Shanghai F1 circuit and the Beijing Olympics later this year, should result in ever-increasing interest in sport generally. Sports tourism, as well as the conventional cultural/historical tourism, could be huge.

    Areas such as Valencia (America’s Cup & F1), and Barcelona, are going to be in a fantastic position to capitalise on this explosion, should they have the vision to seize the opportunity.

    Train-wreck or not, there is light at the end of this particular economic tunnel, if you look for it and are patient, and is the point, I believe, that Bernard is trying to make.

  • #77381

    Anonymous
    Participant

    @mark wrote:

    Big Brother is watching you all.

    Mark

    As you know I sell all the developments that you have recommended on your site.

    Just wonder what your advice would be to friends of yours about those developments in the current climate

  • #77382

    Anonymous
    Participant

    To all the doom and gloom merchants on here where do see this train wreck ending up at what point do you reckon its going to bottom out.

    Whilst I dont share your views Id be interested to see how negative you really feel about the Spanish housing market

    So at what price level do think it would be safe to re enter the market.

    Personally I cant see anyone losing money who buys at 55% of current bank valuation obvioulsy in the right location

    Be interested in the doom mongers view on this

  • #77383

    Anonymous
    Participant

    Senor Nick

    why not ask the ‘doom and gloom merchants’ who have just had their house pulled down in front of them, or all the thousands of others at the mercy of the low-life of all sorts involved in the current Spanish housing fiasco. What with all that and the current credit sqeeze, the bad publicity (and about bloody time to), what will stop the train?, mass protest perphaps?. Justice being seen to be done would be a good start to give confidence that change will come from the unacceptable situation at present.

    Doom mongers? i don’t think so. More like realists.

  • #77384

    Anonymous
    Participant

    Dear Bernard,

    I took a brief look over Portuguese property and it seems that the prices are similar to the ones in Spain. Considering this, what advantage would be to purchase in Portugal versus purchasing in Spain?

    I guess there are regions in Portugal less known and most of the developments are around Algarve and Lisbon. Which regions of Portugal do you think will develop better in the next say 15-20 years?

    Thank you.

  • #77385

    Anonymous
    Participant

    Senior Nick

    It’s not a question of negative v positive. If individuals believe (after looking at all the macro, micro and anecdotal data/evidence coming down stream at us) that the Spanish property market is going to end in a train wreck and use that information/belief to position themselves to ride it out i.e. Don’t buy, put off buying, sell, don’t over borrow and restructure/pay down debt…..then that is very positive surely?

    I’m positive that prices in the β€˜Spanish, UK general public, retail off plan Costa market’ peaked some time in 2003 and have been soft landing since and will now crash.

    I base this on the fundamentals that underpin/drive all markets… Property, Financial and County/Global level Economics. Spain are very poorly positioned or prepared to ride out the credit crisis and slow down in the global economy that we are only just at the beginning of!

  • #77386

    katy
    Spectator

    ADH has large slogans plastered all over their windows in Fuengirola saying “its a buyers market” and we know they don’t lie…don’t we πŸ˜† All the Estate Agents are now using the falling prices myth after they were talking up the market for a few years and denying sales were declining. I have said before its a fallicy, the reductions are on vastly overpriced property.

  • #77388

    Anonymous
    Participant

    Once we build enough aircraft to carry them in, The Chinese will start to travel in their millions to Europe and this will be beneficial to Spain as well. They are also a cruel race who appear to enjoy buying live animals to throw at predators so that they can view the massacre. The Spanish bullring will provide a certain attraction for these Chinese, who will empathise with the Spanish in this sport?.

    Portugal is already suffering from the Spanish fallout. Firstly many Spanish speculators are being forced to sell their investments in Portugal because they need the cash, and secondly there are about 200,000 Portuguese working in the construction industry in Spain and they will be the first to lose their jobs. There are not enough jobs for them all here.

    The Algarve or “Allgrave” as I refer to it is in much the same position as the Costas, seasonal boom bust trajectory and suffering from an oversupply. Now the Portuguese are in danger of developing their Atlantic Coast further oversupplying an oversupplied market.

    As to the next micro market in Portugal which will deliver secure long term assured capital growth from a current low base. I need Mark’s authority to reveal my thoughts as it is near to where I am now, and where I do have a commercial interest in selling property. Suffice to say it is an event which has been debated for 40 years, has an estimated budget of 6,600 million Euros, will provide 7,000 jobs now and many more in 10 years time, and is one of 10 hubs which Europe needs to build. These are solid economic fundamentals on which to make investment decisions, as ultimately a principal home property market is all about supply and demand, affordability and employment close by.

  • #77389

    Inez
    Participant

    Entering the market is a matter of personal choice and interest. You culd buy an overvalued property today, sit on it for 10 eyars or 20 and it will increase in value.

    If you are looking to buy to sell, then dont bother at any price, unless its marbells/Banus beachfront 600sm penthouse, sea views for 250,000 euros!

    Its all relative and the percentage is also relevant to what figure? Bank valuation? Estate agents evaluation? Owners requrement??

    Its only worth what you are prepared to pay for it today and what someone else is prepared to pay for it tomorrow.

    Personally I feel some properties have already bottomed out in price and if they are not bought, then they will sit there until the demand catches back up with it.

    The smart money is moving in now, as firms and as individuals BUT ONLY if it makes sense to them. There is no actual figure than can be put onto it, only an average, but for the reasons I have put above, those figures are dependant on which amount you use to take the percentage of.

  • #77391

    katy
    Spectator

    I still think Bernard’s posts are leading to some sort of sales pitch. Like on Watchdog when they talk bull**** to gullible people for a couple of hours and then get to the bottom line. He certainly seems to be gathering some followers though πŸ™„

  • #77393

    Inez
    Participant

    If it is a pitch then it is a very eloquent and entertaining one. One doesnt have to buy the product but I am enjoying the tantalising snippets from the postings.

  • #77396

    Anonymous
    Participant

    Dear Inez and Katy

    I have attempted to answer all the questions posed to me by all who have contributed to this forum without making a sales pitch. However it is difficult to do this and therefore I have written with complete transparency and sincerity. I consider myself an expert and I have run for cover. If others wish to know what I have done and why, then I believe that I have now completed this explanation to this forum. I have enjoyed doing so and I have learnt much from doing so, above all as the current poll suggests, as well as the news we read everyday, my views are shared with the majority. Spain will crash.

    I took a bet, went to the poorest area of Portugal, which really did crash as a result of property speculation back in 1998, saw it was in a desperate state, knew that something had to be done to kick start the local economy, heard about the possibility of a new international airport, followed this for three years, and when I felt sufficiently comfortable, I left Spain and took the plunge. I risked everything, and here I am with property acquired at less than 100 Euros per square metre now valuing up at 900, when everything else around me is falling apart. I knew this would happen and this time last year I showed Mark around, so he has a clear idea of the pattern of events, my thoughts and the huge risks I took.

    I don’t see those who look to buy in Spain buying here other than those looking to make a medium to long term investment. The speculators moved in last year, and that jump in the market was last week and for those of you hoping to make a quick buck, in my opinion it is now too late.

    What has happened is that those who need to live here because of their new employment are looking to buy and as there is very little quality product on offer demand exceeds supply. Had the airport not been sited at Alcochete then I would have been wiped out. Had I remained in Spain I would have been wiped out as well. Never measure a man by how high he climbs but by how high he bounces when he reaches rock bottom. Believe me I have been there, and as a result of buying property in Spain.

  • #77398

    Anonymous
    Participant

    If a door is slowly being opened here, some will wonder what lies beyond.

    Doesn’t mean they’re going to enter. 😐

  • #77402

    Anonymous
    Participant

    Why is it that people take for granted that house prices have risen by 300% in 10 years but then consider it impossible for them to go down by 40% ?

  • #77403

    Anonymous
    Participant

    Senior Nick πŸ™‚ Do you want lend my tin hat. 😯

    Katy πŸ™‚ Say what you feel gal and dont you hold back now,take it your not interested in Portugal then πŸ˜†

    Drakan ,Most dont but would like to know from what year we are talking about.
    Is ir from the peak of 2003? Surely it will also depend if they paid over the top at that point and where it is.

    Frank 8)

  • #77404

    Anonymous
    Participant

    To put an end to all of this sales pitch taboo. My advice is to adopt a very cautious strategy at the moment. Property and financial markets are in turmoil and Spain is closer to the US disaster than other European countries are. Investment is all about timing and now is not the time to be investing, it is the time to recognise the value of cash, it is the time to create liquidity and it is the time to wait for the moment when property in Spain is once again priced at an affordable level not just for you but for four million other prospect buyers as well, as that is the number of property buyers which will be required to stabalise the property market in Spain.

    For those of you who are considering buying in Spain unless you have found your perfect property and are willing to pay a premium price for it, do consider renting with an option to buy as a more cautious strategy than making a purchase now. I think that this is the safest way to proceed at the moment.

  • #77405

    Anonymous
    Participant

    What about people who have bought off plan and is now having to complete. Would your advice be to get out of the contract and loose the 30% or so deposit? It seems to me that the way prices are going and the developer drastically reduces the prices of all the units that remains unsold it might not such a bad idea?

  • #77407

    Anonymous
    Participant

    Why is it that people take for granted that house prices have risen by 300% in 10 years but then consider it impossible for them to go down by 40% ?

    Because, over a 10 year period at an inflation rate of 4% per year, a property will have increased 50% on the original value. BUT there has been absolutely no increase in real value.

    Now a 40% reduction of it’s new increased (300%) value is a LOT.

    To illustrate the distortion that figures quoted in percentages can portray, how about this ridiculous example.

    300% increase over 10 years, then a fall of 100%. And of course our property is now worth ZERO.

    To be more specific….with some numbers

    100k original price
    150k 10 year price (no gain. adjusted for inflation)
    400k (we have made some money!! 400k is an increase of 300% on original price)
    240k ( Oh dear we have had a 40% fall)
    —-
    90k (real increase in value)

    And 90k of 150k is a 60% increase.

    So what your figures hide in the language of mathematics is that…

    We had a 300% increase and now this has reduced to 60%. Described this way you can see that a 40% reduction is significantly wiping out the gains.

    That’s why I consider it difficult (but not impossible) to believe

  • #77408

    Anonymous
    Participant

    Oh…

    Forget to add, that estimates of a 70% reduction give the following.

    New value = (400k less 70%) = 120k.

    Now the more observant amongst us will realise that this is a 30k reduction from the inflation adjusted 150k figure. A 20% reduction in price!!

    So for those that have said they see a 70% fall possible. What this means is that prices will fall 20% below the value before the housing boom even started!! And that maybe mathematics wasn’t their strong point at school

  • #77409

    Anonymous
    Participant

    Top man JP

    Spot on

    In 2 short posts you have sorted it.

    Steve

  • #77410

    Anonymous
    Participant

    Don’t understand nuffink…………..

  • #77411

    Anonymous
    Participant

    Charlie

    You had to much vino tonight.

    JP

    Looking again, the off plan buyers of the last 2-3 years are still in the brown stuff, but hey most of them where in for the fast buck anyway

    SV

  • #77412

    Anonymous
    Participant
    laggen wrote:
    What about people who have bought off plan and is now having to complete. Would your advice be to get out of the contract and loose the 30% or so deposit? It seems to me that the way prices are going and the developer drastically reduces the prices of all the units that remains unsold it might not such a bad idea?

    This is the current national sport in USA. People get rid of deposits for off-plan as the decline of prices are 2-3 times more than the deposits.

    Buying off-plan is like a lotery, you can win or you can lose. People that did not know this are learning life lessons the hard way.

  • #77413

    Anonymous
    Participant
    jp1 wrote:
    So for those that have said they see a 70% fall possible. What this means is that prices will fall 20% below the value before the housing boom even started!! And that maybe mathematics wasn’t their strong point at school

    You forgot something in your computations: you are talking about human beings not about robots.

    Human beings have sentiments and the fear is one the strongests ones.
    The fear alone can drag prices down by 20%. In the case of Spain, the fear will be a mass phenomenon when the banks are going to take control of abandoned properties and will sell them for pennys on the pound.

    What overshoots on the way up will always overshoot on the way down.

  • #77414

    Anonymous
    Participant
    Bernard Hornung wrote:

    As to the next micro market in Portugal which will deliver secure long term assured capital growth from a current low base. I need Mark’s authority to reveal my thoughts as it is near to where I am now, and where I do have a commercial interest in selling property. Suffice to say it is an event which has been debated for 40 years, has an estimated budget of 6,600 million Euros, will provide 7,000 jobs now and many more in 10 years time, and is one of 10 hubs which Europe needs to build.

    I had heard about the GIrassol solar station but I did not know where was supposed to be located. That means that the area has lots of Sun which is obviously a big plus. It is a bit far from the Ocean and the Sea, I guess it is similar to the off-coast areas in Almeria.

    I am not sure if 7000 jobs can take one of the poorest regions of Portugal and make it much richer though…

  • #77415

    Anonymous
    Participant

    Dear Ralita

    The Portuguese have been debating where to locate the new airport since 1969. In 2006 the decision was confirmed as Ota, but when I studied this option I saw that it was not going to be big enough to be more than a destination airport for Lisbon, and Europe needs to create 10 new transit hubs. An option which had once been considered was The Portuguse Air Force Firing Range at Alcochete but at the time as it was at the height of the Colonial Wars in Africa, the Portuguese Air Force needed the training facility. Now the new International Airport is going to be sited at Alcochete and it will be one of 10 hubs that Europe needs to have. It will immediately employ 7,000 in the construction phase which is expected to last for 10 years and many thousands more when it becomes operational. There is also all the infrastructure which needs to be built including motorways and high speed rail links. A third road and rail bridge will be buit over the river Tagus and the metro is being extended under the river to Montijo. The total investment is currently estimated at 6,600 million Euros.

    Many speculated in buying property at Ota, and indeed many develpments have ben sold off plan recently in that area.

    This reinforces the point which many have made on this forum, if you speculate in property be prepared to win and lose without regret. I did and this time I have won, but I could have easily lost had the decison not gone ahead in favour of Alcochete.

    Add to all this that Lisbon, theCapital City will now expand towards us.

    As for being close to the beach. Never again after my experiences in Spain will I ever be involved with property development near to a baech. I have seen at first hand how greedy developers behave and the way in which coastlines are ruined. Sadly I fear the same will happen in Portugal and I wish no part in it.

    There was one more question concerning off plan deposits. If you want out my recommendation would be to try and get the deposit back. If this fails try to negotiate an extension to the contract whereby no further payments are made until completion, and you can take a view then. If this is impossible then it may be wiser just to do nothing, the chances are you might lose your deposit but if the developer is in a bigger mess than you are he will possibly not be able to meet his obligations, giving you room to negotiate. I would not pay any more money at this stage. If you have an independent lawyer, and I mean independent then ask him.

  • #77416

    Anonymous
    Participant

    Dear Bernard, In this case the FLO has been granted and the developer insisting on final payment or the deposit will be lost. Apparently the developer has reduced the unsold units with up to 30.000 Euros in a bid to get them sold, which is not good news for purchasers that will have to pay the full price. It is either to ride out the storm, complete and hope prices will pick up or loose 80.000 Euros deposit.
    Steve6, not everybody bought off plans to get a fast buck. There are many that bought in good faith and at no fault of their own ended up with properties illegally built without building licence, LFO etc and is set to loose everything.

  • #77418

    Anonymous
    Participant
    Bernard Hornung wrote:
    There was one more question concerning off plan deposits. If you want out my recommendation would be to try and get the deposit back.

    Well, sorry, why would the deposits be returned?

    If the prices of off-plan increased by 100K Euros before completion, everybody would be happy to complete and sell further for the 100K profit.

    If the prices of off-plan decerased by 100K Euros, is it the developer’s fault? No, it is the market’s fault and the buyer has just been unlucky to time the market wrong. I do not think anybody would return the deposits just because the buyer was unlucky…

  • #77420

    Anonymous
    Participant

    In a rising market a developer marks his price according to the volume and velocity of sales. During this phase there is no secondary market, and therefore normal market forces are absent. The purchases are being made on emotion and expectation. Vast sums of money are spent on marketing and high pressure sales techniques are used to induce a purchase.

    If a developer has now reduced the price of the remaining properties in order to sell them, then clearly if you complete you will, if you have agreed to buy at a higher price, crystalise a loss. That loss may or may not be recovered in time. If the other units are not sold and if the developer goes bankrupt completion will place you in a worse position.

    You can either allow your option to expire and lose the deposit you have paid, or negotiate. If you really must buy and there is no turning back, suggest to the developer that unless he is willing to sell the unit to you at the price he is now selling all the others, you may not wish to complete. Star negotiating as you never know how strong your position is until you push the other party to the brink.

  • #77421

    Anonymous
    Participant

    @Bernard Hornung wrote:

    Now the new International Airport is going to be sited at Alcochete

    It doesn’t appear to be a ‘done deal’ yet though.

    http://www.forbes.com/markets/feeds/afx/2008/01/10/afx4516319.html

    “Socrates said the selection of Alcochete is preliminary, and that a final decision will only be made after a public consultation.”

    Including an environmental impact study….

  • #77422

    Anonymous
    Participant

    Dear Iano

    Subject to an environmental study to be carried out by both Portugal and Brussels, which is now being completed. The precise issue is the possibility of bird strike and the possible pollution of the largest natural reservoir of potable water in the Iberian Peninsula. The Tagus river basin.

    The bird strike issue was a red herring and has been resolved. The other issue will be too. If you consider Heathrow and that all around Heathrow and indeed all the way from Heathrow to London there are all the water reservoirs for the city, and in 50 years London has survived.

    How air pollution will affect aquifers 30 metres below the surface defeats me and therefore I am cautiously optimistic that the decision to build the airport at Alcochete will remain firm, and this is the view held here and by those closley involved. Plans are well advanced for Alcochete. Socrates is just being careful, no bad thing.

  • #77428

    Anonymous
    Participant

    @goodstich44 wrote:

    Senor Nick

    why not ask the ‘doom and gloom merchants’ who have just had their house pulled down in front of them, or all the thousands of others at the mercy of the low-life of all sorts involved in the current Spanish housing fiasco. What with all that and the current credit sqeeze, the bad publicity (and about bloody time to), what will stop the train?, mass protest perphaps?. Justice being seen to be done would be a good start to give confidence that change will come from the unacceptable situation at present.

    Doom mongers? i don’t think so. More like realists.

    But that something completely different and at best will only have a small bearing on the current housing market situation

  • #77429

    Anonymous
    Participant

    @pablo Silver or Lead? wrote:

    Senior Nick

    It’s not a question of negative v positive. If individuals believe (after looking at all the macro, micro and anecdotal data/evidence coming down stream at us) that the Spanish property market is going to end in a train wreck and use that information/belief to position themselves to ride it out i.e. Don’t buy, put off buying, sell, don’t over borrow and restructure/pay down debt…..then that is very positive surely?

    I’m positive that prices in the β€˜Spanish, UK general public, retail off plan Costa market’ peaked some time in 2003 and have been soft landing since and will now crash.

    I base this on the fundamentals that underpin/drive all markets… Property, Financial and County/Global level Economics. Spain are very poorly positioned or prepared to ride out the credit crisis and slow down in the global economy that we are only just at the beginning of!

    The question I asked was where do people think the bottom of the market will be and at what % price reduction do they feel it would be safe to re enter the spanish property market

  • #77436

    Anonymous
    Participant

    Dear Senor Nick

    There will never be a defining moment in the property market when it has reached the bottom or indeed peaked. This is not a currency exchange with closing prices. This is a market with a huge myriad of different factors and influences and personal situations with many micro markets. All you will get in a property market are trends, and it takes great judgement, skill and local knowledge to know when to sell and when to buy.

    For the sake of interest the November year on year figures for the construction industry are now available and the results are: Portugal a decline of 26%, Spain a decline of 6.2% and Germany a decline of 6.3%.

    House prices declined in Portugal by 6% last year and so you can see for yourselves how much worse the position is in Portugal and where Spain could end up. Given what is happening in Spain today I believe that the outlook for Spain is worse than it is for Portugal, where there is a surplus of 200,000 homes as opposed to 4 million homes in Spain, even taking into account that Spain has a population four times the size and that Portugals population is declining.

  • #77437

    Anonymous
    Participant

    Senor Nick

    i’m not sure it is completely different? Even if prices fall much further, how many people that would have bought, would buy now with the demolitions, over supply, fraud, poor justice, unused apartments etc. Until Spain puts its house in order, i think many will think it’s only cheap because you get what you pay for?

  • #77438

    Anonymous
    Participant

    Dear Bernard,

    what is the reason why Portugal is lagging so much with property developments?

    Places like Bulgaria and Egypt are more popular even though they are far away.

  • #77439

    Anonymous
    Participant

    Bernard,

    Thats an intesting point of view

    The one thing thats different to portugal is Spain is a much more dynamic economy and their investment in education is starting to pay dividends with the inward investment starting to come into the country.

    There are other outside factors that differ from portugal.

    I can only talk about Andalucia but the Junta here is really going to town on giving grants for inovative projects and there also now trying to top into the international market not just the local spanish.

    You’ve also got the techno park in Malaga.

    With the new train you’ll also have what I call the old london effect where people will be selling there madrid properties for London prices and commuting.

    Spain has a large poor population but I’m a lot more positive than most about the future in Andalucia than most and Im not just looking at property.

    There has already been a change away from a tourist economy to a business economy.

    People still want to come here and live from all over Europe and Andalucia is the place that offers the best total package in the whole of western Europe imo.

    The working class brits will be less and less and there will be some correction Imo but more middle and upper classes will come here especially when the northern european states become more and more politically correct and less atractive to live in by the day

    The thing about Andalucia now is you need to have money to live here and there is a lot less work opportunities for the brits.

    I just dont see deflation of 30% in a modern dynamic western economy.

    Its all about opinions

  • #77440

    Anonymous
    Participant

    @goodstich44 wrote:

    Senor Nick

    i’m not sure it is completely different? Even if prices fall much further, how many people that would have bought, would buy now with the demolitions, over supply, fraud, poor justice, unused apartments etc. Until Spain puts its house in order, i think many will think it’s only cheap because you get what you pay for?

    If you have the right lawyer then that shoudnt be a factor, also if you stick to towns and urbinizations then your on pretty safer ground. even if you buy in the campo then as long as you have a top notch lawyer then a lot of the things you talk about can be avoided.

    You know for example if you buy an apartment of Sototgrande S.A you aint gonna have a problem

  • #77441

    Anonymous
    Participant
    Senor Nick wrote:
    The working class brits will be less and less and there will be some correction Imo but more middle and upper classes will come here especially when the northern european states become more and more politically correct and less atractive to live in by the day

    The thing about Andalucia now is you need to have money to live here and there is a lot less work opportunities for the brits.
    Its all about opinions

    The regions around Vera, garrucha, MOjacar and Cabo di Gata really look like they are meant for white collar people. :))

    I am not sure about Costa del Sol, but Almeria does not offer anything for
    non-working class people. Nada.

  • #77443

    Anonymous
    Participant

    “You know for example if you buy an apartment of Sototgrande S.A you aint gonna have a problem”
    You ain’t gonna have a problem? What is that in losing money or coming across crooks? Spivs are like jackdaws and they congregate in areas like Sotogrande.

  • #77444

    Anonymous
    Participant

    @forestfire wrote:

    “You know for example if you buy an apartment of Sototgrande S.A you aint gonna have a problem”
    You ain’t gonna have a problem? What is that in losing money or coming across crooks? Spivs are like jackdaws and they congregate in areas like Sotogrande.

    I was referring to the legallities and the chances of it being knocked down due illegal planning licenses.

  • #77446

    Anonymous
    Participant

    @jp1 wrote:

    That’s why I consider it difficult (but not impossible) to believe

    I’m afraid not so impossible over a five year period. How’s your Spanish ?:

    http://lavozdemarbella.com/marbella/00002100/el_precio_los_pisos_ha_bajado.html

    http://cl.invertia.com/noticias/noticia.aspx?idNoticia=200801171413_EFE_ET4222&idtel=

    Following your Spanish example:

    β€’ We will assume our property is the typical averaged priced property 2 bedroom property which is not in prime location. The property of this example is in the Spanish coast.
    β€’ I have taken average inflation to be 2% from 1998 to 2004. As we all know inflation is now closer to 4.3% in Spain p.a. as from last quarter 2007. As from 2004-2010 I take the average inflation to be 3% on average taking into account the rising inflation due to petrol. Normally people never deflate property values on calculation the capital appreciation btw.
    β€’ I take the average increase to be 300% as it is well documented that prices of properties in the Spanish coasts have risen threefold over a seven year period.
    β€’ Why a downfall of 40% ? It is just a random number, it could be 20 or 30% just the same.
    β€’ We assume prices began to increase in 1998 up to 2004 which marked the turning point. From 2004-2010 we assume prices will fall until they level off once again following the natural real estate cycle.

    3 different steps:

    1.- Starting value 1998= 100k

    2.- Value in 2004 after 300% increase over 7 year period = 300k
    Real value deflated= (1,02)7= 1.148 ; rounding off to 1.15
    So effectively 15% must be deducted from the value of the property on account of inflation.
    Real value of property in 2004= 300 x 0= 255k

    3.- As from 2004 property prices in Spain start to level off and then to fall at first gradually then more sharply.
    Value from 2004-2010 = decrease of 40% value over a five year period
    0.40 x 300= 120
    300 – 120= 180k

    Value of this unadjusted property in 2010= 180K.
    Deflated: this is tricky so we will estimate inflation to be only 3% over this 6 year period (2004-2010). (1,03)6= 1.19; so that is 19%.

    255 x 0.19= 48.45
    255 – 48.45=206.55
    206.55 x 0.60=123.93. Rounding off to 124k.

    Bottomline, your average property has really increased 24k over a 13 year period (full cycle) deflated. Which is 24%, this at a first glance seems very unrealistic.

    As already mentioned nearly no one deflates house values on calculating capital appreciation. So bearing that in mind, and not deflating, your home value has increased by 80k or 80% on a 13 year period after having fallen 40% during a recession lasting 6 years. This means that on average your property increased by 6.2% a year which I believe is quite realistic and close to the mark.

    However most people would rather come to believe that their homes have and will increase by 10% over this same 13 year period (1998-2010) in despite of a recession. High expectations I’d say.

    As we all know, the stock market on the long run has always given a higher yield than real estate, on average 10% p.a.

    The language of Maths can be tweaked to back whatever it is you are standing for really because the underlying premises are what must be questioned.

  • #77447

    mike
    Participant

    @jp1 wrote:

    Oh…
    So for those that have said they see a 70% fall possible. What this means is that prices will fall 20% below the value before the housing boom even started!! And that maybe mathematics wasn’t their strong point at school

    Or maybe they take both supply and demand into consideration.

    https://www.spanishpropertyinsight.com/spanish_property_market_report_2007_3T.htm

    The ministry of housing also gives figures on completed properties. There were 297,000 completed properties in the first half of the year, roughly the same as the same period last year, which was a record year. This implies a huge number of newly finished properties coming onto a market that has now gone cold, though not all these properties are for sale, as many will have been bought off plan.

    I’m afraid you can’t draw a line in the sand and state that as property was reasonably priced at that time it is impossible for property prices to fall below that level because the conditions that made property affordable at that level at that time may no longer exist.

  • #77448

    Anonymous
    Participant

    Goodstich 44 wrote
    i’m not sure it is completely different? Even if prices fall much further, how many people that would have bought, would buy now with the demolitions, over supply, fraud, poor justice, unused apartments etc. Until Spain puts its house in order, i think many will think it’s only cheap because you get what you pay for?

    I think the situation is the some bought a cheap property and paid a premium price
    These will be the ones that will suffer the most as its not what you sell for its what you paid in the first place.
    Those that did pay way over the top are the ones that normally are the most bitter as theyl hate to admit they made the wrong call.
    This is life just the same as investments,things dont always work out but in the end you have to move on.
    Said it before,how many would be complaining if they had made a fat profit.

    .

    Frank 8)

  • #77449

    Anonymous
    Participant

    “Those that did pay way over the top are the ones that normally are the most bitter as theyl hate to adimit they made the wrong call”
    Agree with that statement, it’s much like the car sales. Every buyer claims they had a good deal on their part ex., but it is usually the dealer that makes the profit.
    How many people have you oveheard saying “I was roobed” after purchasing a car.
    Many, many, many will never admit to loosing money on a deal. It is like the gambler, only tell you when their horse comes in first.
    “The language of Maths can be tweaked to back whatever it is you are standing for”
    Also agree with that. We have an in-house statistician, and find it entertaining how they make figures work. Pity they can’t influence the Revenue too much with their figures.

  • #77451

    Anonymous
    Participant
    Just Frank wrote:
    Even if prices fall much further, how many people that would have bought, would buy now with the demolitions, over supply, fraud, poor justice, unused apartments etc.

    Exactly!

    Greed on the way up = Fear on the way down

    Things always overshoot on their way up or down.

    This is why the 70% discounts will come in the next years. The only question will be: why buy properties in a bad location even for 10K Euros?

  • #77452

    Anonymous
    Participant

    Dear Ralita

    I think that the reason why Portugal has become the poorest country in Western Europe is perhaps because the Portuguese tend to be very conservative and ponderous. They debate matters for years on end and resist reaching conclusions and making decisions, unless they are imposed upon them.

    This is the slow to dead slow country of Europe. I remember in the fifities and sixties when I travelled frequently between Lisbon and Madrid as a small boy, how much further advanced Portugal was in comparison to Spain. From about 1988 onwards (The Barcelona Olympics) Spain accelerated in terms of development and Portugal went backwards. Now Spain is about 20 years ahead of Portugal.

    Portugal needs to catch up and I forsee a convergence between the two countires with parity being reached over the next few years. The Portuguese are unlikely to be as dynamic as the Spanish, they are for the most part happy to remain poor. They are just so happy where they are, no ambition or motivation. Spaniards are hungry to be the best and rich.

  • #77454

    Anonymous
    Participant

    m.g πŸ™‚
    Yep its always someones elses fault and the same ole record keeps playing.
    Some would be best advised that its time to turn it over play the other side. πŸ™‚
    You always get the one down the pub pooring his problems out to everyone and usually clears the place in 5 mins flat,
    We are all are all aware of the corruption,the lies,the cheats.the liars in Spain and every country, mainly from,government.
    I have made a few bob then lost a few bob and I trusted a friend in business only last year and he well and truly screwed it.
    Who do I blame ? ME :cry:I will make 2008 a good year to make up for it as whats the point on living in the past.
    We can all play at the ole figures game to show off however ,bit like a business plan we can show the expenditure but it income is another matter and every excuse is used by some as to poor sales other than they didnt move their lazy arses.( pass the buck)
    There are many with difficult decisions to make this year regarding property,investments and business.as its going to be very uncertain times and its time to keep the head and not panic.
    Off the soap box 😯

    Frank 8)

  • #77456

    Anonymous
    Participant

    Ralita πŸ™‚
    Didnt quote that but never mind πŸ˜•
    Where this 70 % comes from is beyond me as its down to location price paid and if you need or have to sell.
    Now you just sit on the fence and hope they do and bag yourself a bargain if someone is willing to drop.
    As the majority have a good percentage on mortgage which they could not clear, I think the lenders may also have a say in the matter.
    Now if you feel that a good apartment in say Marbella at todays rice of 200,000 euros is going to be sold for 70% off then dream on

    Frank 8)

  • #77457

    Anonymous
    Participant

    “Now if you feel that a good apartment in say Marbella at todays rice of 200,000 euros is going to be sold for 70% off then dream on”
    I would imagine the former owners of one of my premises, who suffered a 75% loss are more than likely to be having nightmares, not dreaming.
    There are still those out there who don’t believe things like this can happen, but they have already, so why can’t they again?

  • #77459

    Anonymous
    Participant

    Is it not the case that beach side property will not depreciate much if at all,

  • #77460

    Anonymous
    Participant

    The value of property depends upon supply and demand as well as on location. It also depends upon other factors which I have mentioned before. If you are referring to Sotogrande then there is also another factor to consider. Some of the properties are Crown Lease, expiring in 2057. You need to have intimate knowledge of the local market and of individual properties. I have seen properties fall by as much as 70% in the last 22 years. In some cases properties were expropriated to build the motorway. I have also seen properties rise in value by 1000%. Beachside is no guarantee to market value. There is no safe haven in Spain.

  • #77462

    Anonymous
    Participant
    Just Frank wrote:
    Now you just sit on the fence and hope they do and bag yourself a bargain if someone is willing to drop.
    Now if you feel that a good apartment in say Marbella at todays rice of 200,000 euros is going to be sold for 70% off then dream on

    Frank 8)

    Sorry Frank, I do not intend to purchase in Spain in the near future.
    Only maybe in Fuerteventura if they develop some nice and cheap resort in Costa Calma.

    Of course Marbella will not see 70% reduction. I was refering to the stretch between Mojacar and Vera or to Mazarrron or many places in Costa Calida or even La Manga.
    Nevertheless, I would never purchase anything in that area for any price.

  • #77463

    Anonymous
    Participant

    “Is it not the case that beach side property will not depreciate much if at all”
    This is absolute rubbish and proof that some do not want to believe fact, for whatever the reason.
    If there is a serious slump in property it does tend to affect all properties.
    The premises I mention was a city centre commercial property, who many believed in bygone years would be banked profit forever.

    “The value of property depends upon supply and demand as well as on location”
    This is the most sensible response. In good times it is considered location to be better that demand. When money is short, lack of demand tends to be the lead.
    No good boasting of a superb location if there are no buyers for it, hence, even in good locations, at such times, the value will have to drop.

  • #77464

    Anonymous
    Participant

    “Is it not the case that beach side property will not depreciate much if at all,”

    Thats what the Real Estate and Estate Agents tell you when they’re trying to close out the deal! Try telling that to the hundreads of thousands with properties near the stunning beaches in Florida. Spain is no differant from the UK (or any other market in this regard), if you are in a nice location/aspect, say beachside there is no reason in a crashing market why they won’t fall in value at the same level as other on a like for like basis, just as the rose in a ‘booming’ market.

    Good property, in a good location will always be more desirable than poor property in poor location but it is still subject to the same supply demand dynamic.

    People say Property by the Sea will always hold its value, if thats the case why did some of the most desirable sea front real estate in the UK fall by 50% in the last UK crash?

    PS. Sandbanks in Poole has seen many asking prises reduced by between 10 and 30% in the last 18 months. In a boom the higher prices stretch from the fundimentals the further they fall in the crash and has been mentioned they tend to over correct in the down cycle.

  • #77465

    Anonymous
    Participant

    I agree with the last two posters. Some estate agents over play the argument that you will be ok if you buy in the right area. It’s yet another attempt at trying to put a positive spin on the train wreck that is the spanish property market.
    I would argue that the “right” areas might be more vulnerable. Take Sotogrande for example. People have been sold the dream there and paid a premium for it but when it comes down to it the area is as badly built as everywhere else, lacks basic infrastructure like many places and has a history of serious crime that is exclusive to such areas. In a falling market, when premiums are not paid, the top end of the market could in fact be the most vulnerable.

  • #77467

    rt21
    Participant

    I would liken good properties in good locations to cream floating on top of milk. If the level of the milk falls then so does the cream.

  • #77468

    Anonymous
    Participant

    I am not an expert on property prices but what I can say is that we bought a new property a year ago between San Pedro and Estepona which are still being sold at the same price although not as quickly and not to Brits. πŸ˜•

  • #77469

    Anonymous
    Participant

    Drakan,

    At the risk of boring everyone I was just trying to highlight how figures quoted as precentage can be misleading.

    For your example it’s incorrect and shows again how figures can mislead. I am not going to disect them but these are some mistakes.

    A 100k value increasing to 300k is an increase of 200% not 300%

    If your property increases by 100%, I am sure you would agree that it has doubled, If it increases by another 100% then it has trippled. 200% of 100k is 200k. But you forget the original starting price of 100k.

    Now when you adjust for inflation you have to adjust the original starting price, not the new higher value. As I did in my calculation. If you apply your inflation figure to the higher value as you did to find a figure to deduct then it wrong. Here’s an example.

    Property 100K increases to 200k after 1 year. Inflation is 20%. So what is real increase in value.

    Your way… 20% of 200K = 40k… Real value is 200k – 40k = 160k.

    Correct way 20% of 100k = 20k…. Real value is 200k – 20k = 180k

    To show you how your way is wrong. Lets assume there was no real growth.

    So property is only worth the 20% inflation value.

    100 +20% = 120k.

    So adjust for inflation to get to back to the real price at the start of the year using your method.

    20% of 120k = 24k Inflation adjusted price (120 – 24) =96k!

    my way.

    20% of 100k = 20k Inflation adjusted price (120 -20 ) = 100k Which is where we started at the beginning of the year and hence as if we had no inflation.

    Ok.. Now everyone is really bored now… If you do you cals again you will get a very different figure.

    I also wanted to say that yes I am sure you will see falls of 40% or more on some properties. But these are properties where a developer/seller has added 100~200k or more to similar properties in the area at the height of the frenzy. This is a prime example where I have property. An almost identical apartment marketed by the same developer is 200k more than mine for being 50 m closer to the beach. Of course building has yet to start. This is cazy and I suspect that these will fall by 40% or more.,to at least equalize with my property.

    But for established properties or new builds that may be been bought of plan 5 or 6 years ago I don’t think the 40% fall will occur if ecomonic conditions remain generally as they are today.

  • #77473

    Anonymous
    Participant

    @mg wrote:

    “Now if you feel that a good apartment in say Marbella at todays rice of 200,000 euros is going to be sold for 70% off then dream on”
    I would imagine the former owners of one of my premises, who suffered a 75% loss are more than likely to be having nightmares, not dreaming.
    There are still those out there who don’t believe things like this can happen, but they have already, so why can’t they again?

    Couldnt have put it better myself.

    Investment funds from the uk will jump is and snap up the good stuff at 50% of bank valuation and just sit on it. If enough volume gets to that level.

  • #77474

    Anonymous
    Participant

    I have a friend who has top top location Villa with fantastic views, money couldnt buy that view because once your front line with his views your always gonna get a premium he certainly would only sell at a premium.

    He also moves out of his house between June to September and basically lives off the holiday rental income that generates with the majority of the same customers comming back each year.

  • #77476

    Anonymous
    Participant

    The value of any property in any market can go up or down. There are several factors which influence price, the main ones being supply and demand. Historically the top end of the market tends to be more robust. There are fewer properties at the top end of the market and the owners are normally sufficiently liquid to service any loans and the costs of maintaining the property.

    Location is another influence and proximity to the beach or other amenities as well as outstanding views help to enhance value, but these factors alone will never guarantee price or a resale. The free market forces of supply and demand are the basic fundamentals of any market. If the market slumps, and it will in Spain as it has in many other countries such as in Portugal, then the whole lot goes down the pan, good and bad locations, beachside, outstanding views, everything gets hit. Don’t be taken in by some desperate owner, agent or developer with hard sales talk in this current climate of adverse and deteriorating property market conditions. Remember that for as long as you do not buy, the problem is theirs and not yours. Don’t even make a discounted offer as if you are patient and hang onto your money for a few years there will be some spectacular bargains. Rent with an option to buy and live in your selected area and do your own research. Do not trust commission hungry sales people.

  • #77477

    Anonymous
    Participant

    @jp1 wrote:

    A 100k value increasing to 300k is an increase of 200% not 300%

    Yes you are right JP, my mistake, it would be 400k which is a 300% increase on the original 100k not 300k.

    My point is that prices will just have to continue to go down, are going down and have been going down for a couple of years now. Granted properties in prime locations will not go down and may even increase their value over the next 5 years, however slightly.

    I’m refering to the normal 2 bedroom properties in the costas of which there is a gut of supply to say the least. These properties should be valued at 180k or less. But with the real estate bubble they are now priced -irrealistically- at 300 or even 400k and falling steadily. Bank valuations valued them at 300/400k. The Bank of Spain sent a stern letter early last year to these valuation companies and they reacted immediately.Valuations fell from 350 to 250k. The same property in a week had fallen 30% following exactly the same methodology employing the same surveyor. It is widely acknowledged that property in Spain is overpriced by 30% (OECD, S&P etc….). Even the BoS believes that property is overvalued between 24-35%:

    http://www.abc.es/hemeroteca/historico-11-06-2005/abc/Economia/el-banco-de-espa%C3%B1a-dice-que-la-vivienda-esta-sobrevalorada-entre-un-24-y-un-35_203062682438.html

    This recession will wipe out for this kind of property most of the increase in price over the last 6 years because they were irrealistically valued in the first place by valuation companies nudged on by banks and hyped on by sellers. However as long as there is a punter willing to buy it then that is it’s price although not it’s value, which remains steady at 180k.

    Many people seem uncaple of coping with the idea that what they bought at 300 or 400k is really worth half that value or even less. Who’s to blame for the negative equity ?

    Anyway despite all the doomongering, prices will rebound by two digits in the distant future as they always have done in the past with the next cycle. It’s really a matter of timing getting in at the right price close to the “real” value of the asset.

    But people shouldn’t deny the fact -and I’m not refering to yourself- that prices are and will continue to go down. In my opinion getting in now has the danger of catching a falling knife. However, if people are willing to buy for “lifestyle” reasons and not as a “investment” well it might be worth buying and not losing the next 5 years of their lives waiting. 5 years they will never recover. You really have to think of the opportunity cost. That is why astutely many sellers are dropping the investment angle and focusing on the quality of life of Spanish property.

    Not a single spaniard believes that prices of property have increased by 5% in 2007 as our Government would have us believe in their manipulated “official” housing statistics.

    Keep track of the rising unemployment and crime figures in Spain. We are in for a very hard ride.

    National elections are drawing near.

  • #77478

    Anonymous
    Participant

    Draken

    You are absolutely right. It is a real mess and nobody wants to admit to it.

    I remember as a non working Name at Lloyd’s intially being told that the results were begining to deteriorate slightly. This was in 1987. By the early 90s Lloyd’s was technically bankrupt and 26,000 Names lost fortunes, many individuals were bankrupted.

    So those of you who are still listening to the misguided professionals in The Spanish Property Market, do be careful, as once your money is lost it is very difficult to recover. DO NOT BUY PROPERTY AT THE MOMENT AS AN INVESTMENT.

  • #77479

    Anonymous
    Participant

    @Bernard Hornung wrote:

    By the early 90s Lloyd’s was technically bankrupt and 26,000 Names lost fortunes, many individuals were bankrupted.

    I like your posts Bernard, they are very interesting read.

    I remember the Names losing their wealth, it was very shocking. I think the average person should concentrate in preserving their wealth in times like these rather than make a risky gamble which outcome will only be known in 5 years time.

    I won’t refute there is big money to be made in the aftermath by pros, large predatory funds, but I think the average Tom, Dick and Harry would do better waiting bearing in mind the opportunity cost that is.

    Unless they are aware of the risks and accept the high risk of their newly purchased property plunging into the red falling a further 20%. And be careful because when you take on a mortgage Spanish banks include clauses in the event of the collateral losing 20% of it’s valuation value.

    The market hasn’t bottomed out yet. Sales prices are still far too high and unrealistic.

  • #77483

    Anonymous
    Participant
    Drakan wrote:
    The market hasn’t bottomed out yet. Sales prices are still far too high and unrealistic.

    “Bottomed yet”? The real fall has not even started.

  • #77485

    Anonymous
    Participant

    Spain + US + UK commercial = Train Wreck but what of UK residential???

    Is there anyone who still thinks that the UK property market will avoid going the way of the US, Spain and all the other ones puffed up off the back of easily available cheap money in the first half of this decade?

    The omens are not good. Commercial property (a lead indicator) of past residential crashes in the UK, is falling at the fastest rate for 21 years! Falling faster than it did ahead of the big crash in residential properties in 1989 to 1994!

    All the excuses that have been put forward as to why we won’t have a crash in the UK are generally wishful nonsense put forward by people with a vested interest, they are……………

    We have high rates of employment, we do not have a recession, demand will continue to outstrip supply and interest rates are low! So why are property prices falling at a record rate in the commercial sector? In London residential prices fell almost 6.5% in the last quarter of 2007

    http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article3193242.ece

    http://www.telegraph.co.uk/property/main.jhtml;jsessionid=EE1VSJF0QWF2BQFIQMGSFGGAVCBQWIV0?xml=/property/2008/01/19/pjanuary119.xml

    http://www.telegraph.co.uk/property/main.jhtml;jsessionid=EE1VSJF0QWF2BQFIQMGSFGGAVCBQWIV0?xml=/property/2008/01/19/pjanuary119.xml

  • #77487

    Anonymous
    Participant

    About time that someone has mentioned this.
    In the next quater or even this week will see a further run from commercial property in the U.K
    Unless anyone hasnt realised,domestic prices will follow, no point in saying its a supply and demand as peolpe will stop buying property in any country if prices are falling and lenders valuations force prices down as they are very husrt at the moment.

    Frank

  • #77493

    Anonymous
    Participant

    Once upon a time people bought property when they could afford to do so. Property was a store of wealth, it was the capital built up over the years. Those who could not afford to buy, rented or lived in tied housing or council housing. People were disciplined to spend what they could afford.

    Then we became clever with mortgages and financial services and all sorts of exotic debt instruments, equity release, sub prime lending and, in between the banks, derivatives of these instruments. Suddenly we all became rich on debt. Work that one out. Well of course we did not, we were able to convert capital into income thereby having more money to spend, increasing our standard of living but having less wealth.

    Now property has gone from being a stack of wealth to a container of recycled debt. Spain is very exposed to this situation as a result of irresponsible lending, at both individual and corporate level. The tidal wave of non performing debt sweeping the country, under which both the property market and economy will be submerged, will drown those who are long on property, and that includes the Spanish economy.

  • #77494

    Anonymous
    Participant

    Bernard

    I’m confused

    Once upon a time people bought property when they could afford to do so

    Spain is very exposed to this situation as a result of irresponsible lending

    Is lending a typo ?

    Regards

    Paul

  • #77495

    Anonymous
    Participant

    Dear P0800aul

    The banks in Spain were too eager to lend and became irresponsible in the way they lent their money to individuals and to corporations who now find themselves unable to service the interest payments on the debt let alone repay the capital borrowed.

    Together the banks in Spain now have accummulated a non performing debt estimated at 1 billion Euros and this will be the year when they will have to take action.

    The lending was irrresponsible as the process of due diligence and criteria used was insufficient to determine the status of the borrower to service the debt.

    This means that many homeowners in Spain have borrowed too much money on the back of rising property values. The equity which remains, that is the value of the property less the debt registered on it, will possibly move into negative territory as the debt remains unserviced and interest payments become rolled up into the overall amount owed thereby increasing the debt, whilst at the same time property values will drop. When the amount of debt exceeds the value of the property you achieve negative equity, which with thin equity margins and a deteriorating property market can happen sooner than expected.

    Exceptionally if the loan continues to be serviced and if it is not called in, then this in itself does not pose a problem. The problem occurs when the loans can no longer be serviced and the banks call in the debt, the property goes through the process of foreclosure, followed by a forced sale and the borrower still owes money to the bank.

  • #77496

    Anonymous
    Participant

    Bernard, whilst I agree with your comments, as they are points I have mentioned on numerous occasions, maybe earlier in this thread, the comments you make could easily refer to UK at present, and USA and ….The one thing I would add is that many borrowers have been totally irresponsible also.

  • #77497

    Anonymous
    Participant

    m,g
    How very true that both borrowers and lenders are at fault as its all to easy to look at one side.
    One development where I have an apartment is a prime example where a large percentage of buyers where investors or people looking for profit as the development had a price tag well below others in the same area.
    Some say that this develpment has been completed to a higher standard but due to the legal mess those that shoulld have completed have had a good reason not to.
    Now many cant afford to complete and they never intended as they were going to flip before completion.
    This leaves a right mess in particular when (or in) the legals are sorted and money must be found at poor exchange rates,difficult to now get credit and prices under threat.

    Frank 8)

  • #77498

    Anonymous
    Participant

    Dear MG

    I agree with everything you say and on Continental Europe, Spain is the country which is closest to the crisis facing USA and UK at the moment.

    Borrowers were equally irresponsible in living beyond their means.

  • #77499

    Anonymous
    Participant

    What with the currrent financial climate, the exchange rate, greedy developers and agents, who until to date, have survived because of many greedy purchasers, who could never afford, or should never have taken the risk to purchase. All leads to disaster.
    The innocent may unfortunately suffer but to the rest, sorry, no sympathy.

  • #77510

    mike
    Participant

    @mg wrote:

    What with the currrent financial climate, the exchange rate, greedy developers and agents, who until to date, have survived because of many greedy purchasers, who could never afford, or should never have taken the risk to purchase. All leads to disaster.
    The innocent may unfortunately suffer but to the rest, sorry, no sympathy.

    I feel sorry for young people. They get advice from older people who should know better having lived through previous property booms and busts. For example, a man I know who is now retired and seems to have done well for himself told me that he would advise any young person to buy property. I questioned this and he clammed up immediately. If I had been a young person who dreams of riches for no work I might have shown him an undue respect and he may have expanded but when challenged he didn’t have the decency to explain himself. I suspect he had never been challenged before, maybe he felt offended at being challenged.

    When you were young and naive would you have listened to an apparently rich man who gave you the secret to riches? I may have done.

  • #77512

    Anonymous
    Participant

    “When you were young and naive would you have listened to an apparently rich man who gave you the secret to riches”
    If I had not been given a brain so I could think for myself , maybe, otherwise, would always question.
    Perhaps that may be a problem with young people. They read the junk media, watch TV and think they can get money for nothing.
    Perhaps with the financial crisis now, all lenders will revert back to as it was and lend to only those who can prove that they can afford to repay the loan, even in times whene there is a blip.
    “I feel sorry for young people”
    I don’t. Look back through time and see how few people in early/mid twenties had their own house.
    It was rent, live with parents or try the Local Authority and that was the case for hard workers also.
    Now, too many have “dreams of riches for no work”.

  • #77514

    Anonymous
    Participant

    mg, for some reason best known to yourself you appear to put everyone into one category, and have a low opinion of everyone. What section of the population do you have any respect for ……if any?

  • #77533

    Anonymous
    Participant

    1. Those who work hard
    2. Those who live within their means
    3. Those who do not expect things for free
    4. Those who use common sense when dealing with money
    5. Those who use their brain instead of following the mass
    6. Those who ……

    “you appear to put everyone into one category”
    Perhaps I should have stated “many”, but I cannot see where I stated “all”

    “Look back through time and see how few people in early/mid twenties had their own house.
    It was rent, live with parents or try the Local Authority and that was the case for hard workers also.
    Now, too many have “dreams of riches for no work”.”
    Can I assume you disagree with these comments?

  • #77534

    Anonymous
    Participant

    6. Those who…. don’t have an enlarged sense of entitlement

  • #77538

    Anonymous
    Participant

    “Those who…. don’t have an enlarged sense of entitlement”
    That is the problem. NOBODY has an entitlement (enlarged or not), unless they have the money to be able to buy.

  • #77539

    Anonymous
    Participant

    mg, I will be so bold as to say that we (my husband and I) fall into the category of respect then! πŸ˜‰

  • #77541

    Anonymous
    Participant

    I feel sorry for young people. They get advice from older people who should know better having lived through previous property booms and busts. For example, a man I know who is now retired and seems to have done well for himself told me that he would advise any young person to buy property. I questioned this and he clammed up immediately. If I had been a young person who dreams of riches for no work I might have shown him an undue respect and he may have expanded but when challenged he didn’t have the decency to explain himself. I suspect he had never been challenged before, maybe he felt offended at being challenged.

    When you were young and naive would you have listened to an apparently rich man who gave you the secret to riches? I may have done.[/quote]

    Mike I would still advise any young person to buy a property sure there are ups and downs but then again there are no free rides in life and i the long term property has always been a good bet and I believe always will be. It is not dissimilar to the stock market, I have seen my pension fund decrease by around 18% recently but that wont stop me continuing to have a pension. When I was young I was told by an older man “when people are getting out of something you go in” and I have found this in most cases not to have been bad advice.

  • #77551

    Anonymous
    Participant

    “I would still advise any young person to buy a property sure there are ups and downs but then again there are no free rides in life and i the long term property has always been a good bet “
    Can’t disagree with that statement, but would say “I would still advise any young person to buy a property” if they can afford it without overstretching.

  • #77566

    Anonymous
    Participant

    A true professional is an individual who places his clients interests before his own. The same must go for older people when approached for advice by a younger generation. The young will for the most part respect advice imparted from an older person, especially if they have asked for advice.

    Each one of us has the right to the truth, and I believe the point which you are all very close to making is mis-selling.

    For so many to be in the position in which they are now, in the USA, in the UK and in Spain, their misguided aspirations of immediate wealth on the back of a speculative buy to let and second home property markets, must in some cases have been stimulated by a number of individuals all working in collusion. The developers, the agents, the lawyers, the bankers, the independent financial advisers, so called “professionals.”

    Sadly we all know that to be the case. Which brings me firmly back to what I wrote early on in this debate, a number of less than professional individuals spent vast sums of money in marketing which combined with high pressure hard sales techniques, induced a number of individuals to embark upon a course of action which under normal circumstances they would have never dreamt of doing. Too late its happened.

    Admittedly some were greedy, but I do feel for all who have been sucked into this, young and old, as the misery which they now all face will set them back for the rest of their lives, if it hasn’t already ruined their lives.

    We all have a moral obligation not to induce more people in the property market in Spain during such volatility. Times such as these are only for the experts and not for those who think that they know what they are doing. It is safer and wiser not to buy just now and to accept the worst case scenario of a train wreck. When the market recovers then by all means review what I have written. There will still be spectacular bargains.

  • #77567

    Anonymous
    Participant

    m.g
    Like many I had sleepless nights after stretching myself when I tokk out a Β£30,000 mortgage on the Β£50,000 house I live in today ? Value now Β£600,000 + ❓

    Frank 8)

  • #77569

    Anonymous
    Participant

    m.g

    For sure

  • #77570

    Anonymous
    Participant

    Frank, and your point?

    “Like many I had sleepless nights after stretching myself when I tokk out a Β£30,000 mortgage on the Β£50,000 house I live in today ? Value now Β£600,000 +”
    So what profit have you truly made.
    Sell up and buy like for like, or do you believe that your property has increased in value, whilst all others aroud have decreased or remained static?
    When was the property purchased?
    What was the average income when the property was purchased?
    What has inflation been since purchase?
    Can I assume that you have not spent Β£1 on the property, improving, extending, altering, since purchase?

  • #77571

    Anonymous
    Participant

    Maybe the bottom line in all of this is instead of Location, Location, Location – we should be considering Destination, Destination, Destination……. 8)

    and for me, it definitely shouldn’t be Spain at the moment.

  • #77572

    Anonymous
    Participant

    …………

  • #77573

    Anonymous
    Participant

    πŸ˜† So true Charlie.

  • #77574

    Anonymous
    Participant

    m.g πŸ™‚
    You are 100% correct in advising that you should only purchase anything within your means.
    The only point is that sometimes we do step outside of the box to get things we really want and work our nuts off to make it work.
    P/S I do have more than one property ?
    Destination ? Well Greece or even the U.K do not do much for me either. πŸ˜‰

    Frank 8)

  • #77575

    Anonymous
    Participant

    Well, I’m happy so far Frank.
    I’ve just had an offer for land I bought 18 months ago, 30% more than I paid. Not bad considering what has been happening in Spain in the same period.

    And the best part – it’s 100% legally mine! πŸ˜€

    (….and no maintenence charges, goat doo-doo is bio-degradable πŸ˜‰ )

  • #77577

    Anonymous
    Participant

    Frank,
    It still doesn’t give answer to my questions:
    Β£600,000 + Current Value, but:

    So what profit have you truly made?
    Sell up and buy like for like, or do you believe that your property has increased in value, whilst all others aroud have decreased or remained static?
    When was the property purchased?
    What was the average income when the property was purchased?
    What has inflation been since purchase?
    Can I assume that you have not spent Β£1 on the property, improving, extending, altering, since purchase?

    Charlie, if it is commercial development land, I would be interested to take a look. PM me if you wish.

  • #77578

    Anonymous
    Participant

    Charlie πŸ™‚
    Well done πŸ™‚ Still hate the place. πŸ˜‰
    Just one day I may have a legal place in the sun just like the one you wanted,on the same development none the less. πŸ™‚

    Frank 8)

    m.g I simply pointed out the good advice is not always the right advice.
    Lets just say that I have considerable equity in this property and another that I own and you play with your figures as you appear to not have taken my posting in the manner intended. πŸ™‚

    Frank 8)

  • #77579

    Anonymous
    Participant

    It’s all swings and roundabouts in buying and selling property.

  • #77580

    Anonymous
    Participant

    Dear Charlie

    You are right.

    When it comes to resort property development, never before has destination thinking been so important.

    Destinations which span generations and seasons and which combine family ambience with business tourism, modern luxury with environmental responsibility. Contemporary property schemes which allow for a lower density and a higher occupancy, multi-use resorts as opposed to their single-use predecessors, create higher visitor levels, generate more revenue streams and provide for a more stable real estate market. Greater income means more investors and a re-sale market with a greater velocity and volume of sales.

  • #77582

    Anonymous
    Participant

    Frank, just trying to make a point, which many seem to overlook, especially those who only see what the sale value of their home is and not consider outgoings.
    My own personal experience, for the home I have at present is that it was in superb condition when purchased for Β£x, but in the first 12 months, more than the purchase price had been spent and altering, extending, decor, etc. In year 3, 4 times Β£x was offered, although the property was not for sale. I was discussing this with a friend who thought me silly not to consider. But sitting back and thinking, what would I purchase if I sold, what would it cost to have altered to my requirements, what would I have to pay for the base property, the upheaval, etc.,
    I have lived in the premises for 10 years now, and its value is way into 7 digits. Again, if I wanted to sell now, I will have to pay simialr sorts of money, then fit out to my own taste, so what would be the profit there.
    May look good on paper and may make some feel good to say my house is worth Β£xxxx, but to me it is a home and I make my business interests make me the profit I require.

  • #77589

    mike
    Participant

    @mg wrote:

    @mike wrote:

    “When you were young and naive would you have listened to an apparently rich man who gave you the secret to riches”

    If I had not been given a brain so I could think for myself , maybe, otherwise, would always question.
    Perhaps that may be a problem with young people. They read the junk media, watch TV and think they can get money for nothing.

    Well, to be fair, that’s always been the case that the young wanted to take short cuts. And it’s hardly the young who have caused the current crisis. I’m just rather protective of people who are encouraged to jump on a bandwagon by people who do know better but who feel less insecure if everyone is copying their mistake.

    @mg wrote:

    Perhaps with the financial crisis now, all lenders will revert back to as it was and lend to only those who can prove that they can afford to repay the loan, even in times whene there is a blip.

    I agree. In fact I agree with most of your points except for your downer on the young, I think that they should challenge the accepted wisdom and make mistakes. And we should stand in their way when they are being exceptionally erm, brave.

  • #77590

    mike
    Participant

    @Just Frank wrote:

    m.g
    Like many I had sleepless nights after stretching myself when I tokk out a Β£30,000 mortgage on the Β£50,000 house I live in today ? Value now Β£600,000 + ❓

    Frank 8)

    Frank, if you could afford a 40% deposit then you were, and still seem to be, rather rich. And with that much equity in the house from the start you are probably a wimp for having sleepless nights.

  • #77591

    Anonymous
    Participant

    Hi Mike
    Well at 28 years old it seemed a fortune at the time and the equity was hard earnt I can assure you.
    It was every penny I had and more and yep I worried and if thats a wimp then thats me. πŸ™‚
    m.g All I was saying is that sometimes you have to step outside of the box in life and make your own decisions both good and bad.
    Thank you for your profit and loss account but in the end you have made money out of property its called the property ladder .Yawn 😯

    Frank 8)

  • #77592

    Anonymous
    Participant

    Perhaps we should sue the estate agents. 😈

  • #77593

    mike
    Participant

    @Just Frank wrote:

    Hi Mike
    Well at 28 years old it seemed a fortune at the time and the equity was hard earnt I can assure you.
    It was every penny I had and more and yep I worried and if thats a wimp then thats me. πŸ™‚ Frank 8)

    Only joking, Frank, maybe I should have put a smiley. It’s lovely to see someone doing so well.

  • #77595

    Anonymous
    Participant

    “And it’s hardly the young who have caused the current crisis”
    Can’t agree here. It is the young who want, but many are not prepared to work that bit harder to save, accumalate funds, wait a while doing so, but take the easy option and borrow to the hilt. Therefore, many, many first time buyers and as demand increases, so do prices.

    “I’m just rather protective of people who are encouraged to jump on a bandwagon”
    Haven’t they a brain to think for themselves?

  • #77602

    Anonymous
    Participant

    m.g
    I assume you are looking for a reaction on the last comment.
    Lets hope they have more brains than some of us that brought them into the world. πŸ˜₯
    They will make mistakes,one being they listened to the likes of your goodself and tried to save for a deposit while renting over the past 5 years while U.K.property has doubled in price.

    Frank 8)

  • #77603

    Anonymous
    Participant

    “I assume you are looking for a reaction on the last comment.”
    No, just stating my opinion.

    “Lets hope they have more brains than some of us that brought them into the world.”
    Let’s hope so, otherwise there will be blanket bankruptcy if some take the lead from their parents.

    “They will make mistakes,one being they listened to the likes of your goodself”
    Hope that they don’t just read my comments and accept, if so, they need educating and education.

    “They will make mistakes,one being they listened to the likes of your goodself”
    Could do worse I suppose, just hope that they are not in my employment if they are so easily influenced by a starnger.

    “tried to save for a deposit while renting over the past 5 years while U.K.property has doubled”
    Don’t expect tears from me on this. Read recent history, just 50 years ago majority couldn’t afford to save enough for a deposit in 5 years.

  • #77609

    Anonymous
    Participant

    Is this the ‘new age of cynicism’?

    The younger you get the more cynical you become.

    πŸ˜•

  • #77621

    Anonymous
    Participant

    Hi Jsmith,

    Perhaps we should sue the estate agents.

    http://www.nytimes.com/2008/01/22/business/22agent.html?ex=1358744400&en=c4be3f9c1dc913bb&ei=5088&partner=rssnyt&emc=rss

    Am I the only one here to pick up on the significance of this. If the case proves miss-selling then the agents are in BIG DOGGIES S***.

    And, lets face it, what happens in The States is often copied in the UK then eventually Europe.

    This could have massive implications – if agents are nervous about miss-selling it ‘knocks corruption on the head’ overnight πŸ˜•

  • #77779

    Anonymous
    Participant

    Hi Jsmith,

    Perhaps we should sue the estate agents.

    http://www.nytimes.com/2008/01/22/business/22agent.html?ex=1358744400&en=c4be3f9c1dc913bb&ei=5088&partner=rssnyt&emc=rss

    Am I the only one here to pick up on the significance of this. If the case proves miss-selling then the agents are in BIG DOGGIES S***.

    And, lets face it, what happens in The States is often copied in the UK then eventually Europe.

    This could have massive implications – if agents are nervous about miss-selling it ‘knocks corruption on the head’ overnight πŸ˜•

  • #77625

    Anonymous
    Participant

    Theres no excuse for paying too much.

    1. Establish if the market is going up or down (in this case it was going down).

    2. Look in the local news paper to what prices are being asked for like for like properties in the same area.

    3. Check recent sold prices (via the internet) takes 2 minutes!

    4. Negociate a price that you’re prepared to pay or walk away!

  • #77787

    Anonymous
    Participant

    Theres no excuse for paying too much.

    1. Establish if the market is going up or down (in this case it was going down).

    2. Look in the local news paper to what prices are being asked for like for like properties in the same area.

    3. Check recent sold prices (via the internet) takes 2 minutes!

    4. Negociate a price that you’re prepared to pay or walk away!

  • #77835

    Anonymous
    Participant

    Dear Maximus

    I have certainly picked up on this as the problem with most professionals is that they will look to place the blame on another person, when in fact so many of them have actually been working in collusion.

    Interestingly in Portugal ReMax has come under pressure from several homeowners who feel that they paid too much for their homes and they are now looking at ways to assist these homeowners to cover the mortgage payments with the lending institutions by re negotiating the lending terms on their behalf.

    So at least in Portugal there is a feeling of responsibility and integrity even if there is no admission to culpability. Estate Agents advise individuals on decisions which if made can make or break that individual. I believe that Estate Agents should be regulated and assume responsibility for collecting all the information required from various specialists and presenting this in a transparent and responsible way to the purchaser. There must be a duty of care.

    I advise people on the purchase of property and I am pleased to record that for the last 18 months I have not sold a single property in Spain or in Portugal because I felt that the risks are too high, and that it is more important to place my clients interests ahead of my own. The result is that I now have a list of potential buyers who have asked to be contacted when I feel the time is right for them to invest.

    Sometimes cash is King, and any investment portfolio should always retain a level of liquidity.

  • #77649

    Anonymous
    Participant

    Dear Maximus

    I have certainly picked up on this as the problem with most professionals is that they will look to place the blame on another person, when in fact so many of them have actually been working in collusion.

    Interestingly in Portugal ReMax has come under pressure from several homeowners who feel that they paid too much for their homes and they are now looking at ways to assist these homeowners to cover the mortgage payments with the lending institutions by re negotiating the lending terms on their behalf.

    So at least in Portugal there is a feeling of responsibility and integrity even if there is no admission to culpability. Estate Agents advise individuals on decisions which if made can make or break that individual. I believe that Estate Agents should be regulated and assume responsibility for collecting all the information required from various specialists and presenting this in a transparent and responsible way to the purchaser. There must be a duty of care.

    I advise people on the purchase of property and I am pleased to record that for the last 18 months I have not sold a single property in Spain or in Portugal because I felt that the risks are too high, and that it is more important to place my clients interests ahead of my own. The result is that I now have a list of potential buyers who have asked to be contacted when I feel the time is right for them to invest.

    Sometimes cash is King, and any investment portfolio should always retain a level of liquidity.

  • #77881

    Inez
    Participant

    Buyer Beware! End of really.

    From the article it wasnt mis representation of the proeprty per se – they shouldnt have trusted him, but I think the difference is while I am an agent in the middle he was the buyers agent so should he not have had a higher duty of care for his client!

  • #77681

    Inez
    Participant

    Buyer Beware! End of really.

    From the article it wasnt mis representation of the proeprty per se – they shouldnt have trusted him, but I think the difference is while I am an agent in the middle he was the buyers agent so should he not have had a higher duty of care for his client!

  • #77884

    Anonymous
    Participant

    Dear Inez

    Each one of us are as good as our last deal. If a deal is going to ruin your reputation, walk away from it.

    I once represented a firm whose only intent was selling anything to anyone, and which I only discovered after a few weeks after opening a franchise. I immediately handed over the franchise to another individual who chose not to agree with me. I gave it to him for free, I did so because I also received advice from Mark, that was enough for me to make up my mind that what I was about to get involved with was wrong.

    Personally I lost Β£100,000 in setting up the franchise and the best thing I ever did was to walk away from it before ever having concluded a sale.

    I also worked for a developer who when approached directly by another group encouraging speculation in property did the same thing. I walked away from that as well. Character is what we have left when we have lost everything else. This is what enables you to move on, and to recover your position whilst at the same time restoring your reputation which has inevitably been tarnished by previous association with unscrupolous individuals. That has been my experience in Spain.

  • #77684

    Anonymous
    Participant

    Dear Inez

    Each one of us are as good as our last deal. If a deal is going to ruin your reputation, walk away from it.

    I once represented a firm whose only intent was selling anything to anyone, and which I only discovered after a few weeks after opening a franchise. I immediately handed over the franchise to another individual who chose not to agree with me. I gave it to him for free, I did so because I also received advice from Mark, that was enough for me to make up my mind that what I was about to get involved with was wrong.

    Personally I lost Β£100,000 in setting up the franchise and the best thing I ever did was to walk away from it before ever having concluded a sale.

    I also worked for a developer who when approached directly by another group encouraging speculation in property did the same thing. I walked away from that as well. Character is what we have left when we have lost everything else. This is what enables you to move on, and to recover your position whilst at the same time restoring your reputation which has inevitably been tarnished by previous association with unscrupolous individuals. That has been my experience in Spain.

  • #77894

    Inez
    Participant

    I totally agree with you Bernard. I have ‘lost’ many sales as I am not a hard sale person and strive to ensure the best deal for both parties. I usually end up losing a little on the financial side, but my priority is to sleep at night and my reputation is above all else.

    I am very comfortable in the knowledge people trust me in what I do – consequently in all these years of trade I have had no complaints – even when we havent sold a property its not for want of trying!

    As you say without integrity you are nothing!

  • #77694

    Inez
    Participant

    I totally agree with you Bernard. I have ‘lost’ many sales as I am not a hard sale person and strive to ensure the best deal for both parties. I usually end up losing a little on the financial side, but my priority is to sleep at night and my reputation is above all else.

    I am very comfortable in the knowledge people trust me in what I do – consequently in all these years of trade I have had no complaints – even when we havent sold a property its not for want of trying!

    As you say without integrity you are nothing!

  • #77895

    Anonymous
    Participant

    @Drakan wrote:

    Not a single spaniard believes that prices of property have increased by 5% in 2007 as our Government would have us believe in their manipulated “official” housing statistics.

    Keep track of the rising unemployment and crime figures in Spain. We are in for a very hard ride.

    National elections are drawing near.

    Back on this topic, I’m not the only one that disagrees with the manipulated government statistics. Economists think likewise, article of today’s newspaper -in Spanish-:

    Los economistas no se creen que el precio de la vivienda haya subido en 2007

    http://www.cotizalia.com/cache/2008/01/23/97_ciudadanos_creen_precio_vivienda_subido.html

    The “real” figures for 2007 should be a loss of between 5-10% of Spanish property price. Closer to to the latter in fact IMHO.

    But politics are forever politics and it’s not in the Spanish government’s interest to show the real figures.

  • #77695

    Anonymous
    Participant

    @Drakan wrote:

    Not a single spaniard believes that prices of property have increased by 5% in 2007 as our Government would have us believe in their manipulated “official” housing statistics.

    Keep track of the rising unemployment and crime figures in Spain. We are in for a very hard ride.

    National elections are drawing near.

    Back on this topic, I’m not the only one that disagrees with the manipulated government statistics. Economists think likewise, article of today’s newspaper -in Spanish-:

    Los economistas no se creen que el precio de la vivienda haya subido en 2007

    http://www.cotizalia.com/cache/2008/01/23/97_ciudadanos_creen_precio_vivienda_subido.html

    The “real” figures for 2007 should be a loss of between 5-10% of Spanish property price. Closer to to the latter in fact IMHO.

    But politics are forever politics and it’s not in the Spanish government’s interest to show the real figures.

  • #77897

    Anonymous
    Participant

    @Bernard Hornung wrote:

    I advise people on the purchase of property and I am pleased to record that for the last 18 months I have not sold a single property in Spain or in Portugal because I felt that the risks are too high, and that it is more important to place my clients interests ahead of my own. The result is that I now have a list of potential buyers who have asked to be contacted when I feel the time is right for them to invest.

    This is how good professionals should act, putting the client’s interest at heart and foremost and not their own personal interests. Kudos to Bernard for honesty. People will take notice of this and they will return to buy properties from you when things sooth out in the future. πŸ˜‰

  • #77697

    Anonymous
    Participant

    @Bernard Hornung wrote:

    I advise people on the purchase of property and I am pleased to record that for the last 18 months I have not sold a single property in Spain or in Portugal because I felt that the risks are too high, and that it is more important to place my clients interests ahead of my own. The result is that I now have a list of potential buyers who have asked to be contacted when I feel the time is right for them to invest.

    This is how good professionals should act, putting the client’s interest at heart and foremost and not their own personal interests. Kudos to Bernard for honesty. People will take notice of this and they will return to buy properties from you when things sooth out in the future. πŸ˜‰

  • #77903

    Anonymous
    Participant

    Dear Drakan

    Thank you for your kind words.

    The Government of Spain does not wish to disclose the true state of the Spanish Property Market or indeed of the Spanish Economy as it has an interest in winning the elections. Really bad news will not help them win.

    The Opposition Party does not wish to be seen as scaremongers in order to win the elections. So they are keeping quiet.

    The result is that the cover up continues with the delivery of suspect data which any reasonably intelligent person knows cannot be true. The situation is far worse than admitted and reality will soon reveal all, as it has in the USA.

    As for those of you who believe that predatory investment funds are circling overhead, dream on. Most Fund Managers have had a shocking start to the New Year, their funds have been decimated by a reduction in value and by withdrawals, and for those who are in a position to look for opportunity, Spain is possibly well down on their list, as there are other safer and more attractive opportunities elsewhere.

  • #77703

    Anonymous
    Participant

    Dear Drakan

    Thank you for your kind words.

    The Government of Spain does not wish to disclose the true state of the Spanish Property Market or indeed of the Spanish Economy as it has an interest in winning the elections. Really bad news will not help them win.

    The Opposition Party does not wish to be seen as scaremongers in order to win the elections. So they are keeping quiet.

    The result is that the cover up continues with the delivery of suspect data which any reasonably intelligent person knows cannot be true. The situation is far worse than admitted and reality will soon reveal all, as it has in the USA.

    As for those of you who believe that predatory investment funds are circling overhead, dream on. Most Fund Managers have had a shocking start to the New Year, their funds have been decimated by a reduction in value and by withdrawals, and for those who are in a position to look for opportunity, Spain is possibly well down on their list, as there are other safer and more attractive opportunities elsewhere.

  • #77942

    Anonymous
    Participant

    You, Inez and JiminSpain are the kind of real estate agents I would hire to purchase my properties in Spain.

    Honest, experienced and down to the point unbiassed advice with the clients interest foremost in mind and not their own.

  • #77742

    Anonymous
    Participant

    You, Inez and JiminSpain are the kind of real estate agents I would hire to purchase my properties in Spain.

    Honest, experienced and down to the point unbiassed advice with the clients interest foremost in mind and not their own.

  • #77944

    Anonymous
    Participant

    Jiminspain has returned to the UK about two weeks ago after five years in Spain.

  • #77744

    Anonymous
    Participant

    Jiminspain has returned to the UK about two weeks ago after five years in Spain.

  • #77946

    Anonymous
    Participant

    I’m sorry to hear that, I didn’t know. I wish him well.

  • #77746

    Anonymous
    Participant

    I’m sorry to hear that, I didn’t know. I wish him well.

  • #77953

    Anonymous
    Participant

    Dear Drakan

    Thank you but after all the terrible experiences I had in property development in Spain, and being a witness to the lengths to which people would go to grab other peoples hard earned money, I vowed never ever to get involved in the property market in Spain again. I concluded that the risks of something going wrong are too high.

    No single individual ever gets to have effective control over the human, financial and material resources to ever be able to offer the guarantees which were offered. It was all false, and everytime we suffered a disaster we were assured that it would never happen again it did. We went through a downhill spiral of lies and cover ups and a constant battle between commercial department and technical department leaving the client stranded in the middle of this mess.

    Personally I think that Spain is an unsafe place, to live, to invest, and to trust. At some stage it blows up in your face.

  • #77753

    Anonymous
    Participant

    Dear Drakan

    Thank you but after all the terrible experiences I had in property development in Spain, and being a witness to the lengths to which people would go to grab other peoples hard earned money, I vowed never ever to get involved in the property market in Spain again. I concluded that the risks of something going wrong are too high.

    No single individual ever gets to have effective control over the human, financial and material resources to ever be able to offer the guarantees which were offered. It was all false, and everytime we suffered a disaster we were assured that it would never happen again it did. We went through a downhill spiral of lies and cover ups and a constant battle between commercial department and technical department leaving the client stranded in the middle of this mess.

    Personally I think that Spain is an unsafe place, to live, to invest, and to trust. At some stage it blows up in your face.

  • #77961

    Anonymous
    Participant

    Thanks for your good wishes and vote of confidence Drakan, unfortunatly being honest, truthful, offering exceptional customer service etc.etc. does not cut through the current problems being experienced in Spain.

    I love Spain with a passion, we have kept our property and would not try to sell (even if I could) When our son finishes his education and finances allow “I’ll be back” as Arnie say’s.

    Good luck to you all will contribute again when we get settled.

    Jim (cold and wet Devon) why do I keep looking at the weather in Spain πŸ˜₯

  • #77761

    Anonymous
    Participant

    Thanks for your good wishes and vote of confidence Drakan, unfortunatly being honest, truthful, offering exceptional customer service etc.etc. does not cut through the current problems being experienced in Spain.

    I love Spain with a passion, we have kept our property and would not try to sell (even if I could) When our son finishes his education and finances allow “I’ll be back” as Arnie say’s.

    Good luck to you all will contribute again when we get settled.

    Jim (cold and wet Devon) why do I keep looking at the weather in Spain πŸ˜₯

  • #77966

    Inez
    Participant

    Hi Drakan, thanks for that. I feel for yu Jiminspain, its bloomin hard work to keep ones head above water but I do like to sleep well at night.

    I have been involved in property for 24 years now and never once missold a property. Its a personal thing and its inside people in all walks of life.

    I detest the way people have been treated and yes the arguments are they were naive, they should not have listened is quite frankly crap (sorry Mark) and really gets my goat.

    In the UK if you mis sell, its an offence, to tell people lies is appalling and comes down to the individual – easy to blame the company.

    Daily I have tales from people in terrible situations bought about by the current circimstances, and whilst it was very vry tempting to go into the offplan sales years ago, I never did on principle because I knew it was going to end in tears and this situation would come down the line. It was inevitable with the cards on the table over 8 years ago!!!

    Ok calmed down, back to pacifying weeping people as best I can now.

  • #77766

    Inez
    Participant

    Hi Drakan, thanks for that. I feel for yu Jiminspain, its bloomin hard work to keep ones head above water but I do like to sleep well at night.

    I have been involved in property for 24 years now and never once missold a property. Its a personal thing and its inside people in all walks of life.

    I detest the way people have been treated and yes the arguments are they were naive, they should not have listened is quite frankly crap (sorry Mark) and really gets my goat.

    In the UK if you mis sell, its an offence, to tell people lies is appalling and comes down to the individual – easy to blame the company.

    Daily I have tales from people in terrible situations bought about by the current circimstances, and whilst it was very vry tempting to go into the offplan sales years ago, I never did on principle because I knew it was going to end in tears and this situation would come down the line. It was inevitable with the cards on the table over 8 years ago!!!

    Ok calmed down, back to pacifying weeping people as best I can now.

  • #77967

    Anonymous
    Participant

    Inez,

    If we do decide to purchase a property, when the current turmoil calms down, we will be in touch. πŸ™‚

  • #77767

    Anonymous
    Participant

    Inez,

    If we do decide to purchase a property, when the current turmoil calms down, we will be in touch. πŸ™‚

  • #77968

    Inez
    Participant

    You would be very welcome. Have a good weekend

  • #77768

    Inez
    Participant

    You would be very welcome. Have a good weekend

  • #77970

    Anonymous
    Participant

    “I detest the way people have been treated and yes the arguments are they were naive, they should not have listened is quite frankly crap (sorry Mark) and really gets my goat”
    Bring on the nanny state. Many who have been caught are the same people who know every wrangle to swindle and cheat DSS, Revenue, etc., but don’t like it when they have been conned.

    “In the UK if you mis sell, its an offence, to tell people lies is appalling and comes down to the individual – easy to blame the company”
    Maybe illegal but often unpunished, just the same as in Spain. This week’s case. Investor (own funds – insurance payout), trusted an advisor (financial – salesman) and gave deposit for 3 properties. No such properties. Whereabouts of advisor and builder now unknown.

    Such things happen in all Countries. Be real.

    “I never did on principle because I knew it was going to end in tears and this situation would come down the line”
    So no fault of the purchaser, not satisfied with buying one, but put deposits on another 2 or 3, just to “turn” and make a quick buck.

    There are always going to be innocent who will suffer and do not deserve to, but the greedy punters are also to blame.
    Remember, if it wasn’t for the punters waiting to sign, there would be no developers and agents.
    Again, be realistics, more often than not, there are two sides.
    (2 to tango!!!!)

  • #77770

    Anonymous
    Participant

    “I detest the way people have been treated and yes the arguments are they were naive, they should not have listened is quite frankly crap (sorry Mark) and really gets my goat”
    Bring on the nanny state. Many who have been caught are the same people who know every wrangle to swindle and cheat DSS, Revenue, etc., but don’t like it when they have been conned.

    “In the UK if you mis sell, its an offence, to tell people lies is appalling and comes down to the individual – easy to blame the company”
    Maybe illegal but often unpunished, just the same as in Spain. This week’s case. Investor (own funds – insurance payout), trusted an advisor (financial – salesman) and gave deposit for 3 properties. No such properties. Whereabouts of advisor and builder now unknown.

    Such things happen in all Countries. Be real.

    “I never did on principle because I knew it was going to end in tears and this situation would come down the line”
    So no fault of the purchaser, not satisfied with buying one, but put deposits on another 2 or 3, just to “turn” and make a quick buck.

    There are always going to be innocent who will suffer and do not deserve to, but the greedy punters are also to blame.
    Remember, if it wasn’t for the punters waiting to sign, there would be no developers and agents.
    Again, be realistics, more often than not, there are two sides.
    (2 to tango!!!!)

  • #77989

    Anonymous
    Participant

    @jiminspain wrote:

    Thanks for your good wishes and vote of confidence Drakan, unfortunatly being honest, truthful, offering exceptional customer service etc.etc. does not cut through the current problems being experienced in Spain.

    I love Spain with a passion, we have kept our property and would not try to sell (even if I could) When our son finishes his education and finances allow “I’ll be back” as Arnie say’s.

    Good luck to you all will contribute again when we get settled.

    Jim (cold and wet Devon) why do I keep looking at the weather in Spain πŸ˜₯

    That line originally was from general MacArthur in WWII.

    Hey Jim, good to see you around again. I’m sure we’ll see each other again in the next cycle. Best of luck in your new life in the UK ! Btw here it’s cloudy and windy right now. πŸ˜‰

  • #77802

    Anonymous
    Participant

    @jiminspain wrote:

    Thanks for your good wishes and vote of confidence Drakan, unfortunatly being honest, truthful, offering exceptional customer service etc.etc. does not cut through the current problems being experienced in Spain.

    I love Spain with a passion, we have kept our property and would not try to sell (even if I could) When our son finishes his education and finances allow “I’ll be back” as Arnie say’s.

    Good luck to you all will contribute again when we get settled.

    Jim (cold and wet Devon) why do I keep looking at the weather in Spain πŸ˜₯

    That line originally was from general MacArthur in WWII.

    Hey Jim, good to see you around again. I’m sure we’ll see each other again in the next cycle. Best of luck in your new life in the UK ! Btw here it’s cloudy and windy right now. πŸ˜‰

  • #77998

    Inez
    Participant

    MG – I do realise people get swayed and make decisions that they shouldnt do and then expect others to get them out of it, but if we all thought that way there would be no trade and no economy.

    Does it make it right to go to the doctor or specialist with a complaint, be told a treatment, pay for it and then find its wrong – shrug your shulders and say hey ho, my problem I will just go away and die now?

    No.

    Many of these agents profess to be proffessional and are affiliated to some marvellous club or other. They have dark suits, nice cars, money and wealth and use it to CON people – its not fair or square!

    Yes some have been greedy, but the single purchasers buying in good faith when all the while the agents KNEW there would never be permissions, knew it would be illegal and it is still happening – there are properties for sale in agents windows/websites which are ILLEGAL and where you cannot obtain a mortgage as no bank will do so. It is against the decree 218 to offer them without paperwork, so why are they still doing so??

    Its so they can grab a deposit and then either shift the client to another property or grab the money and run as things get harder here.

    Its not right and there is no argument against it!

  • #77820

    Inez
    Participant

    MG – I do realise people get swayed and make decisions that they shouldnt do and then expect others to get them out of it, but if we all thought that way there would be no trade and no economy.

    Does it make it right to go to the doctor or specialist with a complaint, be told a treatment, pay for it and then find its wrong – shrug your shulders and say hey ho, my problem I will just go away and die now?

    No.

    Many of these agents profess to be proffessional and are affiliated to some marvellous club or other. They have dark suits, nice cars, money and wealth and use it to CON people – its not fair or square!

    Yes some have been greedy, but the single purchasers buying in good faith when all the while the agents KNEW there would never be permissions, knew it would be illegal and it is still happening – there are properties for sale in agents windows/websites which are ILLEGAL and where you cannot obtain a mortgage as no bank will do so. It is against the decree 218 to offer them without paperwork, so why are they still doing so??

    Its so they can grab a deposit and then either shift the client to another property or grab the money and run as things get harder here.

    Its not right and there is no argument against it!

  • #77999

    Anonymous
    Participant

    Three cheers for Inez!! Well written. πŸ˜€

  • #77822

    Anonymous
    Participant

    Three cheers for Inez!! Well written. πŸ˜€

  • #77824

    Anonymous
    Participant

    Inez, you seem to have “cherry picked” what you have chosen to reply to.
    What about:

    “In the UK if you mis sell, its an offence”
    Maybe illegal but often unpunished, just the same as in Spain. This week’s case. Investor (own funds – insurance payout), trusted an advisor (financial – salesman) and gave deposit for 3 properties. No such properties. Whereabouts of advisor and builder now unknown.
    Such things happen in all Countries. Be real.

    “I never did on principle because I knew it was going to end in tears and this situation would come down the line”
    So no fault of the purchaser, not satisfied with buying one, but put deposits on another 2 or 3, just to “turn” and make a quick buck.

    Remember, if it wasn’t for the punters waiting to sign, there would be no developers and agents.

    Many who have been caught are the same people who know every wrangle to swindle and cheat DSS, Revenue, etc., but don’t like it when they have been conned.

    “Does it make it right to go to the doctor or specialist with a complaint, be told a treatment, pay for it and then find its wrong – shrug your shulders and say hey ho, my problem I will just go away and die now? “
    If you go to a “quack” you may experience this. Proves that you should not listen to all that is told to you (guaranteed rental income, guaranteed growth *5+ p.a. and they still fall and are falling for it).

  • #78000

    Anonymous
    Participant

    Inez, you seem to have “cherry picked” what you have chosen to reply to.
    What about:

    “In the UK if you mis sell, its an offence”
    Maybe illegal but often unpunished, just the same as in Spain. This week’s case. Investor (own funds – insurance payout), trusted an advisor (financial – salesman) and gave deposit for 3 properties. No such properties. Whereabouts of advisor and builder now unknown.
    Such things happen in all Countries. Be real.

    “I never did on principle because I knew it was going to end in tears and this situation would come down the line”
    So no fault of the purchaser, not satisfied with buying one, but put deposits on another 2 or 3, just to “turn” and make a quick buck.

    Remember, if it wasn’t for the punters waiting to sign, there would be no developers and agents.

    Many who have been caught are the same people who know every wrangle to swindle and cheat DSS, Revenue, etc., but don’t like it when they have been conned.

    “Does it make it right to go to the doctor or specialist with a complaint, be told a treatment, pay for it and then find its wrong – shrug your shulders and say hey ho, my problem I will just go away and die now? “
    If you go to a “quack” you may experience this. Proves that you should not listen to all that is told to you (guaranteed rental income, guaranteed growth *5+ p.a. and they still fall and are falling for it).

  • #77830

    Inez
    Participant

    My point is if you go to a professional you expect to get professional advice.

    If they say there are guarantees whether its the bank version or rental version, then it should be there. Thats what these people paid for.

    Yes it is to you if you decide to act on it, but conmen are very clever with their victims.

    As was Myra Hindley and Ian Brady, but I guess it was the kids fault they were tortured and murdered.

  • #78003

    Inez
    Participant

    My point is if you go to a professional you expect to get professional advice.

    If they say there are guarantees whether its the bank version or rental version, then it should be there. Thats what these people paid for.

    Yes it is to you if you decide to act on it, but conmen are very clever with their victims.

    As was Myra Hindley and Ian Brady, but I guess it was the kids fault they were tortured and murdered.

  • #77832

    Inez
    Participant

    And your example is a rather isolated one, yes it happens in the UK but did it happen hundreds of thousands of times all over the country?

    I think not

  • #78004

    Inez
    Participant

    And your example is a rather isolated one, yes it happens in the UK but did it happen hundreds of thousands of times all over the country?

    I think not

  • #77834

    Anonymous
    Participant

    “your example is a rather isolated one” – OK, if you say so that is fine. Pity you don’t keep up to date with matters prior to making such a statement. One advisor robbed over 200 customers of their money, one of which was a pensioner and life savings gone.
    I suppose that when it is in UK, it gets lost amongst other thing, as much as the news in Spain possibly does with the ex-pats, but anything concerning Brits and it is expected to be World news.
    In my mind the idiots who run up huge debts they cannot afford, just because they see an overseas property as an easy form of income, are as bigger thieves and conmen as the developers and agents rubbishe on here. Who picks up the bill when they default?
    The savers through loss of interest and the taxpayers.
    I have sid before. Be real. You maybe a trustworthy agent in that part of Spai, but there is a world outside.

    “As was Myra Hindley and Ian Brady, but I guess it was the kids fault they were tortured and murdered.”
    Such stupidity is not worth commenting on, stick to sales.

  • #78005

    Anonymous
    Participant

    “your example is a rather isolated one” – OK, if you say so that is fine. Pity you don’t keep up to date with matters prior to making such a statement. One advisor robbed over 200 customers of their money, one of which was a pensioner and life savings gone.
    I suppose that when it is in UK, it gets lost amongst other thing, as much as the news in Spain possibly does with the ex-pats, but anything concerning Brits and it is expected to be World news.
    In my mind the idiots who run up huge debts they cannot afford, just because they see an overseas property as an easy form of income, are as bigger thieves and conmen as the developers and agents rubbishe on here. Who picks up the bill when they default?
    The savers through loss of interest and the taxpayers.
    I have sid before. Be real. You maybe a trustworthy agent in that part of Spai, but there is a world outside.

    “As was Myra Hindley and Ian Brady, but I guess it was the kids fault they were tortured and murdered.”
    Such stupidity is not worth commenting on, stick to sales.

  • #77836

    Anonymous
    Participant

    Inez there are some people who use this forum who just love to be antagonistic. They are not worth responding to although it is sometimes difficult not to. πŸ˜‰
    Genuine people recognise the good and the ugly. You are good and I’m sure beautiful! πŸ˜†

  • #78006

    Anonymous
    Participant

    Inez there are some people who use this forum who just love to be antagonistic. They are not worth responding to although it is sometimes difficult not to. πŸ˜‰
    Genuine people recognise the good and the ugly. You are good and I’m sure beautiful! πŸ˜†

  • #77840

    Anonymous
    Participant

    If seeing both sides, having evidence to support comments is “antagonistic”, I am antagonistic.
    In my world it is called honesty and unblinkered.
    beautiful“, what the hell that has to do with corruption, mis-selling, business, etc., only few would know.

  • #78008

    Anonymous
    Participant

    If seeing both sides, having evidence to support comments is “antagonistic”, I am antagonistic.
    In my world it is called honesty and unblinkered.
    beautiful“, what the hell that has to do with corruption, mis-selling, business, etc., only few would know.

  • #77842

    Anonymous
    Participant

    As was Myra Hindley and Ian Brady, but I guess it was the kids fault they were tortured and murdered.

    Wow Inez really poor and tasteless analogy, not worthy of you.

  • #78009

    Anonymous
    Participant

    As was Myra Hindley and Ian Brady, but I guess it was the kids fault they were tortured and murdered.

    Wow Inez really poor and tasteless analogy, not worthy of you.

  • #77850

    Anonymous
    Participant

    I do take my hat off to Inez for not having succumbed to being involved with the off plan sales racket.

    As a Sales Director for three Spanish Property Development Companies, I did so and in good faith.

    However with only one exception when I worked for an outstanding individual in Valencia, were developments handed over correctly and on time. It was perfection at its best. Quite outstanding in attention to detail.

    My experience with the other two developers was disastrous and chaotic. I did not suffer, quite the reverse I was extremely well looked after and well compensated when I was sacked from one company, the other I decided to leave to take up my current appointment.

    I know that several clients I induced into making a purchase have since been completely ignored with lists of complaints and defects. One couple have yet to move into an apartment I sold them 5 years ago! If they were to show you the photographs of how a luxury 2 million Euro apartment was handed over you would all be speechless.

    I have ruined certain peoples lives and I will take this guilt with me to the grave. And Inez is right, and in these circumstances Inez also right to quote the examples given. Clients, genuine buyers not wanting to speculate, were treated like lambs going to the slaughter. They were like children, conducting business in a foriegn country and sometimes in a language they could not even speak or understand. They placed all their trust in us. We deliberately mis-sold and mis-led, because it was more important to satisfy our shareholders than our clients.

    However shocking the remarks made by Inez may be, they highlight the true state of affairs and what really went on. I know as I was in the middle of it all. I am not looking for forgiveness or absolution or indeed pity. My life has improved dramatically since leaving Spain. I miss it very much and we will always return to Spain each summer, if only to watch the polo. But one thing I do not miss is everyone lying in business. And for me that will always be the reason why I will never conduct any business in Spain again.

    Sometimes we are blind and we do terrible things which we live to regret. Jack Kipling failed the Royal Navy eyesight test, he then failed his Army medical on account of asthma and bad eyesight. His father knew The King and Lord Roberts, Colonel-in-Chief, and Colonel respectively, Irish Guards.

    Kipling used his influence and secured his young 17 year old son a commission as well as writing to The Commanding Officer of the Second Battalion that his son Jack had his fathers permission to go into action underaged.

    To quote Rudyard Kipling when he came to terms that his only son Jack had been killed, the day after his 18th birthday.

    “And if they ask you why you died, tell them your father lied.”

    Now reflect upon this, perhaps some of you have seen “My Boy Jack”, and draw parallels and you will have some understanding of the lengths that people go to in order to convince themselves and others that what they are doing is right. Anyone involved in off plan sales in Spain today, is in my mind inducing individuals to take risks that neither they nor their clients truly understand.

  • #78013

    Anonymous
    Participant

    I do take my hat off to Inez for not having succumbed to being involved with the off plan sales racket.

    As a Sales Director for three Spanish Property Development Companies, I did so and in good faith.

    However with only one exception when I worked for an outstanding individual in Valencia, were developments handed over correctly and on time. It was perfection at its best. Quite outstanding in attention to detail.

    My experience with the other two developers was disastrous and chaotic. I did not suffer, quite the reverse I was extremely well looked after and well compensated when I was sacked from one company, the other I decided to leave to take up my current appointment.

    I know that several clients I induced into making a purchase have since been completely ignored with lists of complaints and defects. One couple have yet to move into an apartment I sold them 5 years ago! If they were to show you the photographs of how a luxury 2 million Euro apartment was handed over you would all be speechless.

    I have ruined certain peoples lives and I will take this guilt with me to the grave. And Inez is right, and in these circumstances Inez also right to quote the examples given. Clients, genuine buyers not wanting to speculate, were treated like lambs going to the slaughter. They were like children, conducting business in a foriegn country and sometimes in a language they could not even speak or understand. They placed all their trust in us. We deliberately mis-sold and mis-led, because it was more important to satisfy our shareholders than our clients.

    However shocking the remarks made by Inez may be, they highlight the true state of affairs and what really went on. I know as I was in the middle of it all. I am not looking for forgiveness or absolution or indeed pity. My life has improved dramatically since leaving Spain. I miss it very much and we will always return to Spain each summer, if only to watch the polo. But one thing I do not miss is everyone lying in business. And for me that will always be the reason why I will never conduct any business in Spain again.

    Sometimes we are blind and we do terrible things which we live to regret. Jack Kipling failed the Royal Navy eyesight test, he then failed his Army medical on account of asthma and bad eyesight. His father knew The King and Lord Roberts, Colonel-in-Chief, and Colonel respectively, Irish Guards.

    Kipling used his influence and secured his young 17 year old son a commission as well as writing to The Commanding Officer of the Second Battalion that his son Jack had his fathers permission to go into action underaged.

    To quote Rudyard Kipling when he came to terms that his only son Jack had been killed, the day after his 18th birthday.

    “And if they ask you why you died, tell them your father lied.”

    Now reflect upon this, perhaps some of you have seen “My Boy Jack”, and draw parallels and you will have some understanding of the lengths that people go to in order to convince themselves and others that what they are doing is right. Anyone involved in off plan sales in Spain today, is in my mind inducing individuals to take risks that neither they nor their clients truly understand.

  • #77862

    rt21
    Participant

    I read an interesting article this morning regarding a study of house prices in Holland over a couple of centuries, which suggests that house prices maintain a sort of equilibrium over the long term but include periods of steep increases and decreases. (Bubbles)

    The academic who drew up the index said that “home-owners worldwide may need to brace for double-digit losses in once-booming markets”

    the link for the article is below

    http://uk.news.yahoo.com/rtrs/20080127/tbs-uk-dutch-housing-7318940.html

    Richard

  • #78019

    rt21
    Participant

    I read an interesting article this morning regarding a study of house prices in Holland over a couple of centuries, which suggests that house prices maintain a sort of equilibrium over the long term but include periods of steep increases and decreases. (Bubbles)

    The academic who drew up the index said that “home-owners worldwide may need to brace for double-digit losses in once-booming markets”

    the link for the article is below

    http://uk.news.yahoo.com/rtrs/20080127/tbs-uk-dutch-housing-7318940.html

    Richard

  • #78020

    Anonymous
    Participant

    @Bernard Hornung wrote:

    As a Sales Director for three Spanish Property Development Companies, I did so and in good faith.

    Which companies were these Bernard?

  • #78024

    Anonymous
    Participant

    Dear Mr Ben

    The rules of this forum and my own professional circumstances prevent me from answering your question.

  • #78030

    Anonymous
    Participant

    @Bernard Hornung wrote:

    Dear Mr Ben

    The rules of this forum and my own professional circumstances prevent me from answering your question.

    That’s a great pity. It appears to me that it is becoming increasingly difficult these days to “tell it like it is” don’t you think? pm me.

  • #78032

    Anonymous
    Participant

    I have known Inez professionally well before I discovered this forum.
    I like her professionalism, integrity and up front manner.

    This is essential in business and it is a pity that many people don’t realise this aspect of client relationship.

    As an adult. I don’t expect people to be nice and condescending in the business dealing with me and for this reason that I like straight talking people.

    Whether an example is good, bad or insensitive is very much depends on personal sensitivities. Certain matters in life need strong and shocking example to bring the message home or to draw parallels.

  • #78033

    Anonymous
    Participant

    Shakeel
    Gets me into problems at times but 100% agree.
    Sometimes its great to be liked ,sometimes you are not liked the most important thing is your honest and in particular to yourself and what you beleive is right.
    Bernard πŸ™‚ It wasnt O.V.P was it ?
    Go on you can tell us we wont tell anyone . πŸ™‚

    Frank 8)

  • #78035

    Anonymous
    Participant

    Dear Shakeel

    I agree as however gruesome her analogy is, it does actually hit the nail on the head. I think it brilliant and brave, and what is required right now is courage, above all moral courage to admit to what has happened.

  • #78037

    Anonymous
    Participant

    @shakeel wrote:

    I like her professionalism, integrity and up front manner.
    This is essential in business and it is a pity that many people don’t realise this aspect of client relationship.
    .

    What you describe are basic fundamentals in dealing with each other in any matters. Would you not agree?

  • #78038

    Anonymous
    Participant

    I agree as however gruesome her analogy is, it does actually hit the nail on the head

    So we are now suggesting those who kidnapped innocents off the streets (in the days when it was thought safe to play in the streets) took them to the moors, sexually abused and murdered them, should be compared to the sales person who sold three apartments to the idiots who believed they could make free money, even though they only wanted to buy one.

    Or are we saying that the idiots who bought three apartments are as blameless as the children.

    I’m lost …….

    NO I’M NOT…… YOU’VE ALL GONE MAD.

    You certainly have a large cross to bare Bernard as I would find it hard to take the crimes worthy of an comparison to the sexual abuse and murder of children, to my grave.

    What utter rubbish!

  • #78039

    Anonymous
    Participant

    You need to draw parallels from the examples quoted and not make exact comparisons. The parallels are that people were offered an opportunity to be misled and induced into a course of action by commission hungry sales people who knew full well that the promises being made were unlikely to be fulfilled.

    Inevitably things went wrong and once again clients were misled with guarantees that all would be well, Sales Contracts were signed, more stage payments made.

    Finally when there was now no hope of delivering what was promised, the last payments were called for, with threats that if they were not made on time the properties purchased would be sold to another buyer.

    The abuse was not sexual nor did it include murder. That is not the point being made.

    Of relevance is how serious this is, that it was pre meditated, and that it continued through a progress of lies and cover ups in order to continue to receive payments.

    Sometimes the worst injuries you can inflict on an individual are those you do not see. Clearly you have not been on the receiving end of all the anguish and disappointment let alone panic and depression being suffered by perfectly genuine buyers, many retired, and many who have had their lives wrecked. Some people had sold up and were for a time left homeless because they were assured that their new homes would be ready, and they were not.

    As to murder, I do not discount the possibility of one or more suicide cases, if they have not happened already.

    Yes I have a large cross to bear, as does any other individual with the moral courage to admit we destroyed peoples lives. I cannot rectify the past, I am helping my last 11 buyers to get the urbanisation which they bought into re-painted and generally brought up to the standards promised.

    I feel I have a moral duty of care towards others who are considering purchasing in Spain at the moment and I am advising them to wait, and to avoid any off plan purchase, let alone buying anything, as you can still obtain utility value from renting. There is no need to buy property in Spain at the moment.

    If you think that all this is rubbish, then there is little point in attempting to convince you that it is as serious as described. Others however have understood and generally accepted what has happened, with different views as to what the future might hold, and with different experiences to mine. That helps us to obtain a fuller picture and to contribute to informed debate, without having to reduce ourselves to making personal remarks.

  • #78040

    Anonymous
    Participant
    The parallels are that people were offered an opportunity to be misled and induced into a course of action by commission hungry sales people who knew full well that the promises being made were unlikely to be fulfilled. 

    My point is that there is no parallel at all between these two deeds, they can not be. Or are you suggesting the children where motivated by greed?

    The rest of your post are just words Bernard and convince me of nothing, except to say I’m sure those in despair are glad of the Paint.

  • #78043

    Anonymous
    Participant

    Dear P800aul

    No you have missed the point completely.

    The motivation on the part of a few to move to or to retire to Spain was not greed.

    You have failed to distinguish between the buy-to-let investors, the speculators, those buying a second or holiday home and those buying a principal home.

    It is the last category of genuine buyers who were ensnared by commission hungry sales people and instead of buying a sensibly priced completed home or a re-sale in an established and safe area they were mis-sold properties which delivered the most sales commission, regardless of their needs and circumstances.

    However there is no need to agree with me, and if you think what I have written is paint, dream on. Recently legislation in Portugal has been changed as a result of a paper I wrote to the Government. I have the satisfaction that individuals in positions of authority have taken note of what has happened in Spain and are doing their best to prevent this sort of client abuse from happening in their own country, on account of a paper recently submitted by an individual with knowledge and experience and who in 20 years possibly handled or was closely associated with over 2,000 sales of development property in Spain.

    What is your profile in this industry and what levels have you achieved? I feel disappointed that you should choose to disabuse my contributions and accept that it is your perogative to do so, but perhaps you could express yourself in a more courteous and professional manner.

  • #78044

    Anonymous
    Participant

    My Dear Bernard

    No you have missed the point completely.

    Clearly I have missed YOUR point I still say the analogy was crass and distasteful, period.

    The motivation on the part of a few to move to or to retire to Spain was not greed.

    You have failed to distinguish between the buy-to-let investors, the speculators, those buying a second or holiday home and those buying a principal home.

    No i have not, you have, or are you saying that none of the above buying a second holiday home where drawn into the buy two get one free con then? If you only ripped off the investor why are you so remorseful about?

    It would appear that you are now a poacher turned gamekeeper who played a part in this con, you also seem to be rebuilding the trust with past conned customers (by painting their apartment) and the government ready for the next “big thing”.

    Bernard I am not fooled by you, painting over the cracks with free paint would not earn my trust.

    You are clearly a very, very good sales person.

  • #78045

    Anonymous
    Participant

    “The motivation on the part of a few to move to or to retire to Spain was not greed”
    Agreed, but for the few who went for an easier, cheaper life, where they could get work cash in hand and boast they never had to pay tax. Don’t know what you would call that?

    “You have failed to distinguish between the buy-to-let investors, the speculators, those buying a second or holiday home and those buying a principal home.”
    “It is the last category of genuine buyers who were ensnared by commission hungry sales people”
    Are you saying that they didn’t try to “ensnare” buy-to-let investors, speculatorsand those buying a holiday home?

    “instead of buying a sensibly priced completed home or a re-sale in an established and safe area they were mis-sold properties”
    It was the purchaser’s choice. Or was a gun hald to their head?

    “Recently legislation in Portugal has been changed as a result of a paper I wrote to the Government”
    I compliment you on that, but if you feel so strongly, why not enter the political stage and try to change the system, as us Brits think the Spanish system is wrong?

    If your latest venture is showing great yields, rather that carry your burden to your grave, have you considered offering a buy-back to the people you considered may be suicidal from the purchases you refer to, which you were involved in?

    As for the “poacher turned gamekeeper”, easiest thing in the world to do, unless you have come out of it penniless and are more interested in where your next meal comes from.

  • #78046

    Anonymous
    Participant

    Possibly safer to allow the hatchet to be buried in my back, as it has so many times before. I can live or die with that.

    I am not in a position to rectify lives ruined, but I am in a position to continue to help where I can, and as to placing pressure on the Spanish Government my suggestions are contained in earlier posts.

  • #78050

    Anonymous
    Participant

    Bernard there are people on this forum….and they are always the same people, who jump at the chance of castigating people who tell it “as it is”. They just love to have a go and IMO, incite arguments.
    It has been great to read well written posts from you since you joined the forum. You obviously have first hand experience of the true level of corruption that has plagued Southern Spain. It has affected many REA’s and these are the very people (with the exception of Inez…who started this argument in the first place!! πŸ˜‰ πŸ˜† ) who always come onto the forum and gang up on singular victims and call all the people who lined their pockets so deeply ..IDIOTS. Very derogatory! That IMO IS libelous.

    As Drakan posted to you, your views are very welcome whether some like them or not. I sincerely hope you continue to tell it as it is.

  • #78053

    Anonymous
    Participant

    It has affected many REA’s and these are the very people (with the exception of Inez…who started this argument in the first place!! ) who always come onto the forum and gang up on singular victims and call all the people who lined their pockets so deeply ..IDIOTS. Very derogatory! That IMO IS libelous.

    Phew I thought you meant me there for a moment Claire

  • #78063

    Anonymous
    Participant

    You need to distinguish between responsibility and culpability and also the incremental knowledge gained with experience and how this changes your views. 22 years ago I was new to Spain, I acted in good faith and I let individuals down because I was let down, but not because I knowingly misled. I always acted in good faith.

    With years of experience and having left Spain with several million pounds less than when I went, and having refused to accept commissions owed to me because I was so disappointed with delivery, I left because I failed to make the difference required to sort things out.

    I was never a poacher in the first place, but I was certainly used as such. Yes I can write, I come from what was once a very rich family and I have a private education. I was the perfect puppet to put in front of prospect buyers. And we all wore suits and had company cars, magnificent support, immaculate sales material, and gorgeous sales staff and secretaries. The show was compelling and it worked. We had brilliant sales teams, together we were very productive. But as I said before the money was made when we sold off plan, and then lost when we built. The disasters came afterwards. We had no idea what was waiting for us around the corner, nor any knowledge of the potential hazards of off plan sales.

    The comments that some of you have decided to make confirm to me that those involved in off plan sales in Spain today do not fully understand the risks which they and their prospect purchasers are taking and however much you may hate me for what I have written, Inez was clever, far more clever than I to spot this 8 years ago and I support everything she has written and her analogies as I know and understand her feelings. Inez today must be a witness to a scale and depth of disappointment that no off plan sales person could have ever imagined 8 years ago. Full marks to her for having been so astute, and for a brilliant analogy of human suffering, however inflicted.

    Few of you have ever experienced depravity or human suffering to the levels to which I have, been responsible for refugee camps in Eastern Europe where fathers sold their 14 year old daughters, these are experiences which remain with you and give you a deeper and fuller understanding that life is not just about causing others to suffer so that you can make a fast buck. We all have a duty of care towards each other.

  • #78066

    mike
    Participant

    @p800aul wrote:

    It has affected many REA’s and these are the very people (with the exception of Inez…who started this argument in the first place!! ) who always come onto the forum and gang up on singular victims and call all the people who lined their pockets so deeply ..IDIOTS. Very derogatory! That IMO IS libelous.

    Phew I thought you meant me there for a moment Claire

    I was once accused of being an estate agent. I found it funny at the time but now I’m beginning to realise it was sad. That person thinks that they are still being tormented by the people who stole their money.

    It’s also unthinking and that has long been my bugbear. As soon as I arrived on the Spanish mainland I wanted to discuss what made property there so expensive and how could the prices be maintained. I’ve since discovered that no one who was buying actually knew what they were doing and just listened to their betters.

    I think the next time I find myself in that situation I will leave sooner. I’m not going to change me, I quite like having an opinion on absolutely everything, but with that can come antagonism and conflict as those who don’t want to think get confused and those who don’t want anyone to think get devious.

    As much as it pleases me that I was right, I’ve done that now and any time in the future when someone tells me about the latest big thing I will nod enthusiastically and wait for someone else to raise their concerns before I pile in.

    Anyway, I hope that you all get what you want with the minimum of fuss and expense. I’ll still read here because I want to see how low it can go.

  • #78069

    Anonymous
    Participant

    Bernard

    You seem to be confusing me with a person who sold off plan when if fact I bought a holiday home off plan.

    I have never sold property in my life.

    these are experiences which remain with you and give you a deeper and fuller understanding that life is not just about causing others to suffer so that you can make a fast buck

    .

    I guess some of us just don’t need that type of experience (mind crushing though it must be) to understand.

  • #78072

    Anonymous
    Participant

    Thank you for clarifying your status and my reply was part in answer to you and to others, and to contribute to this forum. It was not directed to any individual.

  • #78073

    Inez
    Participant

    I apologize to anyone who was offended with my analogy – I do tend to get passionate at times.

    To clarify, what I meant was one cannot class everyone under the same umbrella as it being totally 100% their own fault. People were conned by very very clever people, in their own language with sales literature full of lies and then relied on experts being paid for a professional service to ensure what they had bought was correct (the lawyers).

    Perhaps I should have used the cigarette smokers arguments instead.

    Bernard I applaud your honesty regardless of what others may think or answer. We all do things at times we regret in hindsight – none of us are perfect, but it does give readers an insight as to what was going on here and is continuing in other corners of the world.

    I do know people who have become ill and passed on due to the problems their circumstances have caused and of 1 suicide. Very tragic but then people do the same under other circumstances when it all becomes too much.

    Pain and suffering is relative – it matters not the cause, it is the fact that the problem at the time tips that person over the edge.

    Im going to finish on this point now as its detracting from the thread.

    Have a good day everyone.

  • #78074

    Anonymous
    Participant

    Only those of us at the coal face of this industry began to realise what was going on. I was naive to start with and then it dawned on me. I wish I had been as astute as you were. When you now consider the scale of what has happened you begin to accept that the likelihood of a train wreck, cannot be discounted.

  • #78075

    Anonymous
    Participant

    “Bernard there are people on this forum….and they are always the same people, who jump at the chance of castigating people who tell it “as it is”. They just love to have a go and IMO, incite arguments.” – Don’t know who they are but couldn’t agree more.
    I just get fed up with saying as it is, always accepting that more often than not there are two sides to a story, then getting shot down and looked on as being argumentative.
    Back to the thread, the train seems to be getting closer to the buffers daily, unless you believ the sales hype.

  • #78076

    Inez
    Participant

    Exactly, and I am coming from 24 years in the business at all levels covering from working with a UK developer, going to auctions, running an agency in Wood Green London at the height of the 80s boom, mortgage brokerage, 2 years legally qualified (ILEX) and now out here, prop managment and rentals now into auctions.

    I have lived through this before, although in a different skin, so it didnt take a genious to see what was coming down the hill.

    The people selling were all in for the short term and now have left this incredible mess which will follow them around the world.

  • #78078

    Anonymous
    Participant

    Dear MG

    This forum has been excellent as it has extracted for your benefit the views and experiences of an individual over 20 years in Spain, and who failed completely in making any impression whatsoever upon those who knew that what they were doing was fundamentally wrong.

    I have written with complete sincerity and frankness. I am possibly public enemy number one in Spain right now, and a logical conclusion could be that I am fighting the corner for Portugal.

    I am comfortable living in a country where a Government Minister listened to my advice and experience and changed certain legislation in Portugal to facilitate shared freeholds in tourist developments, so as to be able to encourage low density development with moderate to high all year round occupancy. Accepting that the planet we all share has a limited biocapacity and that the choice to share holiday homes is a responsible one as it means that fewer holiday homes need to be built.

    How you choose to interpret what I have written and how you wish to use this to strengthen your arguments for or against a train wreck or soft landing is up to you. There are very few people who have the experience and moral courage in this industry and who have a genuine desire to improve industry standards than I. In short a true Brit with Grit, and I can take it.

  • #78080

    Anonymous
    Participant

    BH
    You say “I am possibly public enemy number one in Spain right now” – Obviosly a small catment, as the name does not stand out.

    “I am comfortable living in a country where a Government Minister listened to my advice and experience and changed certain legislation in Portugal”

    “There are very few people who have the experience and moral courage in this industry”
    Or is it that there are not too many who want to broadcast it and just get on with it.
    Try finding out what others have contributed and without wanting all to know.

    “share holiday homes” Don’t say that time-share or whatever fancy name they want to call it is coming back?

    Years in industry – possibly too many
    Years in business – ditto
    Wealth – my own business only
    Millions lost – never

  • #78081

    Anonymous
    Participant

    Dear MG

    Good for you, however do not confuse one type of property purchase with something quite so abstract as timeshare. You need to be more accurate with the terminology you use.

  • #78082

    Anonymous
    Participant

    mg why do you have to be so derogatory? Is that all you use this forum for?

  • #78083

    Anonymous
    Participant

    Inez wrote

    ‘To clarify, what I meant was one cannot class everyone under the same umbrella as it being totally 100% their own fault. People were conned by very very clever people, in their own language with sales literature full of lies and then relied on experts being paid for a professional service to ensure what they had bought was correct (the lawyers). ‘

    …….well said indeed. The opinions of those opposing yours and Bernards views in the last few pages, just prove to me that some people posting on this thread have similar morels deep down to those people who have caused so much misery to thousands in the last few years in Spain, and who would hope to hear reason from those people?

    Good for you Inez and Bernard, i feel you, along with a few other regulars on this site are making good sense from the viewpoint of decent people.

  • #78085

    Anonymous
    Participant

    “why do you have to be so derogatory” – Why not translate that to straight talking and seeing both sides and not just laying blame on one party, always?

  • #78086

    Inez
    Participant

    Thanks Goodstich – I agree with you and I suppose it does take one to know one if you know what I mean!

  • #78090

    Anonymous
    Participant

    Dear MG

    Culpability lies with all those who knew that what they were doing was wrong and who continued. Responsibility lies with people such as me who were naive as to what was going on until it was too late.

    Without apportioning blame on any individual or group, more than I have already, ultimately this is a very personal matter and one which comes down to the individual’s own conscience of what he believes to be the right thing to do.

    Clearly I have made points with which you do not agree and we would all be much poorer for this experience if we were denied the contributions which you have made. Your contrarian views help me to extract further argument to support my views, and together they nurture a positive experience in learning, a process which none of us ever complete.

    The purpose of ths forum is to stimulate open debate so that we vote on train wreck or soft landing. My comments may at times be verbose, but they are directed towards supporting my arguments suggesting a train wreck. You are welcome not to agree.

  • #78092

    Anonymous
    Participant

    “You are welcome not to agree.” – But why would I wish to disagree when I have stated:
    “the train seems to be getting closer to the buffers daily”

    “Culpability lies with all those who knew that what they were doing was wrong and who continued”
    Is that the agent who knew what he was doing was wrong, or the purchaser blined by greed and the chance of a quick buck.
    Claims that many premises due for demolition in Costa Blanca were disaster for owners, however, later reports were that owners knew that the properties did not have documentation and yet still more people purchased.
    All that being if reports read were correct.

  • #78093

    Anonymous
    Participant

    Dear MG

    I am so pleased we agree. Thank you.

    As to culpability, that rests with the individual. It can include agents, lawyers, developers, buyers, money launderers, associates, the list is endless, and the guilt can only come from within as there will be no justice in something of this scale and magnitude. It is just too big. Where would you begin to start to unravel it all and even if you did what would you achieve.

  • #78094

    Anonymous
    Participant

    I think we must be realistic as to the cause of the current property market decline here in Spain.

    We can cite many reasons that contribute to the present situation from exchange rates to rogue builders/agents etc. However there is one factor IMO which no-one has really touched on in depth and for me it is the largest factor in the cause of the decline.

    During the boom years of 1999 to 2004, the average property price in Spain (with few exceptions) were about half of their UK counterparts. Since the boom, prices have become much more aligned on both sides resulting in potential buyers looking for new emerging markets such as Bulgaria, Morocco, Turkey and Cyprus etc. No longer is it possible to sell your 3 bed semi in Leicester and buy similar in Spain and leave the difference in the bank or buy a little business here in Spain.

    Also in the intervening years, mortgage rates have gone from circa 2.75% to 5.5% here in Spain, along with equal increases in the UK.

    Another factor is over-supply, it was very difficult in the boom years to find enough property due to there being far less new-build in construction (CDS excepted)and few resales worth having.

    Gordon Browns u turn on SIPPΒ΄s certainly killed off what was left of the small to medium size investor markets.

    Now we have a world financial recession to weather for a few years or so there will be little or no speculative or 2nd-home-buying happening to measure.

    However, there will still be those who wish to move to Spain for a new life abroad. They are more savvy now and generally concerned about the horror stories in recent times, but, the abismal exchange rate at present adds about 15,000GBP to an average 200,000 euro property purchase causing exceptional increases in cancellations for new and resale properties.

    All in all, there has been a slow down in the last 4 years. Having sold property in Spain for 8 years from 1999, the year 2005 was the first year when our sales units not only stopped increasing, but actually declined, they have done so steadilly since. My sales are 92% less than they were in summer 2004. I would say those figures are quite a good litmus test as many of my collegues in the industry are showing similar declines.

    I see nothing generally that will change things for the better in the coming few years, so we all have to cut our cloth accordingly and be grateful we experienced the good times.

    To sum up, I would say itΒ΄s been a 4 year soft landing, however, those that never had the tools to measure it – such as declining sales figures- seem to have been caught by suprise!

  • #78095

    Anonymous
    Participant

    Inez wrote “I do tend to get passionate at times.”

    This is all getting very unpleasant. I say what is a women if she has no passion !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!.

  • #78096

    Anonymous
    Participant

    Dear Peter

    Very good to hear from you and thank you for bringing us all up to date with current market conditions and for your valuable additional points.

  • #78097

    Anonymous
    Participant

    ItΒ΄s a pleasure Bernard. I have to say it was your thoughful insight in this thread that brought about my desire to join in, so thank you also for the excellent and educated views you have posted.

  • #78098

    Anonymous
    Participant

    I did not think my thoughts on the “train wreck” were ever in question, but I now realise that when the question was asked at first by Mark, we are requested to PM, which is what I did. I now notice the question has bee re-phrased.
    So, for the record, I voted “train wreck” and sent a PM “train wreck”
    Personally, I don’t think the market will stop when train hits buffers, there will be still more damage done.
    Perhaps needless to say, but I am ready to invest, subject to conditions at the time, towards end of 2008

  • #78102

    Anonymous
    Participant

    Dear MG

    You are absolutely right as once the property market crashes you then continue with the ripple effect into other areas of the economy.

    You have done well to hold back and to watch the entire battlefield unfold in front of you and in your favour which it will. Enjoy.

  • #78103

    Anonymous
    Participant

    Peter + Bernard πŸ™‚
    Think the forum is better for every new member which brings up to date information,opinions and new areas for debate.
    Otherwise it gets like a closed shop and thats the last thing the editor would surely wish πŸ˜€

    Frank 8)

  • #78104

    Anonymous
    Participant

    “You have done well to hold back” – I would hope that so many years as an investor would give me some guidance in what can be an unpredicatble business.
    Statistics, trends, use them all, but above all, gut feelings most certainly come into it.
    Still, the it could be worse, at least the commercial market isn’t suffering as much at present. Suppose it has a lot to do with when money is short, holidays and holiday homes take a knock, whilst people still ahve to shop for food and still have to use banks.

  • #78106

    Anonymous
    Participant

    Provided that you understand the different methods by which residential property is valued. Few in this industry understand the difference between income capitalisation and comparative sales method. Most understand cost method.

    Resort property is normally valued on income capitalisation, rather similar to hotel rooms and indeed commercial and industrial property. It is this anomally which gives a resort property developer the ability to achieve a greater margin when selling residential property.

    However the income capitalisation method assumes that the property is deriving a higher than normal rental income from short term holiday lets, and when these values are blurred by being applied to principal homes because they happen to be sited within resorts, you get the distortions.

    This is one of the reasons you get such differing values on similar properties. If you are planning to move to Spain to set up a principal home, then you need to apply a comparative sales approach, as ultimately you need to get as close as possible to the real market value influenced by supply and demand for a principal home, rather than being influenced by the elevated values of resort property.

  • #78107

    Anonymous
    Participant

    “Few in this industry understand the difference between income capitalisation and comparative sales method” – Those that don’t are called “cowboys” and what makes it a farce that someone buys one or two properties to let and immediately calls themselves a property investor.

    “the income capitalisation method assumes that the property is deriving a higher than normal rental income” – This not being the case with commercial property investment, otherwise you get into the situation of over-renting which will not be of interest to institutional investors, therefore the CV will be lower.

  • #78108

    Anonymous
    Participant

    ..similar to ..as you have to allow for vacant periods, own use and seasonality price differentials, most of which will not apply to commercial or industrial.

  • #78109

    Anonymous
    Participant

    Which is why unless you sre selling a substantial portfolio of residential properties (not tourist let), the investment valus tends to be base on the property valuation and not yield, as covenants and lease duration does not apply, also, the FRI status is not in the equation.

  • #78110

    Anonymous
    Participant

    Correct.

  • #78111

    Anonymous
    Participant

    Which is why I posted it.
    Say it as it is, why use twenty words when 10 will do and use terms that all will understand, be they in property or not.

  • #78115

    Anonymous
    Participant

    You are contributing to a forum and what you write should be interesting to those who may wish to read it. Remember, power, punch, precision, clarity and timing. Whether they agree or not does not matter

    O how I wish my intellect was as sharp as yours and I wasn’t so verbose.

    I guess it is all about style.

  • #78124

    Anonymous
    Participant

    @mg wrote:

    Which is why I posted it.
    Say it as it is, why use twenty words when 10 will do and use terms that all will understand, be they in property or not.

    mg, are you implying that I and other members of this forum are too intellectually challenged to understand Bernards writing style.

    I actually find it refreshing, free of glib cliches and assuringly precise.

    We are fed poor quality journalism and dumbed-down information by most of the worlds media these days.

    We have forgotten how to construct eloquent articles and instead see the frequent use of dreadful “text speak” in so many posts.

    I admire Bernards style of writing, it takes time and effort to be so clear and concise. Keep up the excellent writing style Bernard.

  • #78125

    Anonymous
    Participant

    Yes, I can see how Bernard’s writing style could seem very credible.

  • #78129

    Anonymous
    Participant

    “mg, are you implying that I and other members of this forum are too intellectually challenged to understand Bernards writing style.” – I don’t recall stating that, but did state that I say it as it is. perhaps you could guide me to where I made such a statement?

    “We are fed poor quality journalism and dumbed-down information by most of the worlds media these days” – So is anyone forcing you to read such trash?

    “We have forgotten how to construct eloquent articles” – Have you. Shame.

  • #78133

    Anonymous
    Participant

    …….this is starting to sound like the muppet show!

  • #78134

    Anonymous
    Participant

    Quote mg – “I don’t recall stating that – another mg quote “and use terms that all will understand, “



    Seems you did mg, I donΒ΄t need you to tell other members what I will understand and what I wonΒ΄t.

    Quote mg “We have forgotten how to construct eloquent articles” – Have you. Shame.”

    Thanks for the perfect example mg, you had better let me have that spade before your hole gets any deeper πŸ˜‰

  • #78138

    Anonymous
    Participant

    It was of course Oscar Wilde who once wrote,”Sorry for my long letter, I did not have the time to write a shorter one.”

    When you write think of the reader, your style has to be sufficiently engaging to attract readership. Then you are taken seriously.

  • #78140

    Anonymous
    Participant

    Don’t know about the Spanish property market, but this thread has definitely gone off the rails.

    There will be plenty more threads on the state of the market this year. This one has lost its way. Time to lock it and move on.

    Mark

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