[Anonymous]

Happy New Year to all.

So what is the consensus on what will happen during 2011 in the property market here in Spain?

Will the banks finally release the 10’s of thousands of properties they have? If they do will the price be realistic?

What effect will this have on the market as a whole?

Will it mean more property sales or do people simply not have the money?

Will banks actually give mortgages?

Imo 2011 looks like being even more difficult than 2010 and the property markets will be at least 5 years before it starts to turn around.

Ian

[Anonymous]

Speaking to a friend of mine who works for the property division of one of the banks. She says they have done reasonably well this year by hitting their sales targets, which they did by selling their best stock with big discounts. She is worried that next year will be much more challenging. She expects they will have less room to move on price, and what they have left isn’t very nice anyway (and there’s a lot of it).

There’s a lot more to say about the market outlook for 2011. But first I want to go back and read what was said about 2010…. 😉

[Anonymous]

What has been said for 2010 can be cut & pasted here. All the research etc can become meaningless because of so many permutations, constraints, improbables mix it with political dogma.

I agree the stock that banks have been pushing or are going to be pushing will be undesriable as a holiday/retirement/second home. The best ones we as outsiders will not get a sniff.

[Anonymous]

Relevant article in today’s Wall Street Journal

By WILLIAM BOSTON | Special to the WSJ

Amid all the uncertainties facing European real estate in 2011, there is one abiding belief: Spain is headed for more pain.

It is tempting to think the time is ripe to get back into Spanish property. After all, Madrid office rents have fallen 30% since the peak in the third quarter of 2008. And capitalization rates are at about 6.5%, 2.25 percentage points wider since the third quarter of 2007, representing an erosion of commercial-property prices. The capitalization rate measures the annual return of income-producing properties.

But private-equity investors, property analysts and even Spain’s prime minister agree that the decline in the Spanish economy and weakening of property markets isn’t over yet. Rents still are falling and even if a few recent deals have been done at slightly lower cap rates, prices aren’t improving.

“There could be some opportunistic deals, but I’m not sure we’ve seen the peak of the crisis in Spanish property yet,” said Ralph Winter, founder of private-equity group Corestate Capital AG.

In a survey of 154 real-estate professionals by property analysts at J.P. Morgan Cazenove, 77% of those polled predicted Spain would be the worst-performing property market in Europe in 2011. The best performers are expected to be the U.K., Germany and France.

Mr. Winter, whose firm has more than €1.5 billion ($2 billion) in assets under management, is looking for opportunities to buy distressed property around Europe. While real estate in Spain fits that bill, Mr. Winter said it still is too soon to invest in Spanish property.

To be sure, there still are some deals getting done in Spain. Just before the year’s end, an affiliate of New York-based W.P. Carey & Co. completed the €80 million sale and lease-back purchase of the headquarters of Distribuidora de Television Digital SAU. As part of the deal, DTS agreed to remain a tenant in the building for 20 years, illustrating the kind of secure rent income that investors require to do deals in Spain.

“It is true that the fundamentals of the market are still very weak and rents will adjust further, but these deals have the security of long leases and, therefore, are immune to short-term adjustments, said Adolfo Ramirez-Escudero, executive managing director of capital markets at CB Richard Ellis Group in Spain, an adviser to the buyer on the deal.

But the outlook is bleak. Spain’s real-estate industry still is recovering from a decade of overbuilding, fueled by low interest rates, a robust economy and an influx of British snowbirds seeking second homes on the Spanish seaside. When the subprime-mortgage crisis hit in 2007, Spain’s property bubble burst, leaving developers with big loans and about one million unsold, newly completed homes on their books.

If that wasn’t trouble enough, Spain has been swept up in Europe’s debt crisis, with speculation rife that regardless of the Spanish government’s austerity measures, Madrid won’t be able to escape a bailout by the European Union. That has raised the cost of borrowing and caused mortgage lending to come to a standstill.

In October, the number of Spanish home mortgages issued was down 24% from the same month a year ago, according to data published last week by Spain’s National Statistics Institute. Home sales fell 18% in October to the lowest level on record, according to the data. The Bank of Spain estimates that Spanish banks have nonperforming or at-risk property loans of about €181 billion on their books.

Relief can come only from economic recovery. But Prime Minister Jose Luis Rodriguez Zapatero told Spanish lawmakers last month that it could be years before Spain fixes its economy.

Edward Farrelly, head of Spanish property research at CB Richard Ellis, remains bearish on Spanish property, but said some investors might begin to come back to “pre-empt the expected recovery of the market in 2012.” That scenario is subject to a number of significant risks, however.

For one, a weak economy means higher unemployment, which damps consumer spending and hits shopping-center landlords. As the economy slows, companies require less office space, and that causes vacancies to rise and puts pressure on rents. And with the existing surplus of up to one million new, unsold homes in Spain, banks are unwilling to lend for mortgages unless the loan will finance the sale of a home that already is on the bank’s books.

“I am not very optimistic about the Spanish property market,” said Mr. Farrelly. “The general economic situation is weak. I expect office rents to continue falling next year, and there are still a lot of problems to be worked out in residential property.”

Another risk, said Mr. Farrelly, is a consideration by the Spanish government to try to boost the economy by creating incentives for home builders. If the plan were to go through, Mr. Farrelly said, it could have a short-term impact on the economy by boosting construction but at the cost of creating a new residential property bubble.

“I don’t think they will go through with it,” said Mr. Farrelly. “But it is a risk.”

http://online.wsj.com/article/SB10001424052748703808704576061772298554068.html

[logan]

An interesting article and one which mirrors my own opinion.
Spanish banks have finally realised the true extent of the situation and are currently heavily discounting their holdings.
The trouble is from an investors perspective the situation became considerably worse in the latter quarter of 2010. The banks held on far too long before making a move and now even the discounted stock looks relatively poor value.
With equities booming and an expected up tick in all sectors in the USA during 2011 and serious Eurozone debt worries the Spanish property markets look dead in the water for some time to come.

[katy]

The report states that the subprime mortgage crisis caused Spain’s bubble. Incorrect the property market was already in trouble. Estate agents had been closing for at least a couple of years earlier.

[Anonymous]

Happy New Year everyone! 😀

As I see it, all the things that made Spain appealing to investors several years ago are no longer there, with the exception of the sunshine! There are other places that can offer that though. I don’t think there are any Eurozone countries that are not affected by the current economic problems. Getting a mortgage in the UK is a lottery, and I think we will see unemployment figures rise.

[logan]

China seems to be interested in investment in Spanish debt.
http://www.businessinsider.com/the-market-is-seeing-right-through-chinese-promises-to-keep-investing-in-spain-2011-1
We should not take this as a sign that China expects Spain to rebound any time soon. More that they seek a high return on their enormous capital reserves.

[Anonymous]

Speaking to a Spanish property expert at ground level, a successful estate agent with his feet firmly on Spanish soil, he predicts a 30% decline in property values this year.

He neither takes on over-priced properties nor repossessions, but he has taken on an extra Scandinavian speaker because of the demand from that part of the world. His Mandarin lady is quite busy too, on the commercial side.

[Anonymous]

@Rocker wrote:

Speaking to a Spanish property expert at ground level, a successful estate agent with his feet firmly on Spanish soil, he predicts a 30% decline in property values this year.

He neither takes on over-priced properties nor repossessions, but he has taken on an extra Scandinavian speaker because of the demand from that part of the world. His Mandarin lady is quite busy too, on the commercial side.

..your expert friend is probably right…there are a lot of buyers who do need to reduce the price of their property. I must say, the area my property is based in, I have actually seen properties for sale at the same prices I was seeing in 2007! So there certainly are a lot of stubborn sellers out there, these are the sellers who are slowing things down after all…

[katy]

There was a comment a few days ago in El País that said in February the banks have to start writing down values and there will be lots of reductions….don’t shoot the messenger 😀

[Anonymous]

I think you’re right about stubborn sellers, especially the Spanish. They tend to pluck a value out of the air and stick with it, no matter what, for years.

My expert pal was asked to revalue a Spanish property that has been for sale for the past ten years, at 995,000 Euros. He valued it at 600,000 Euros and it looks as though it is finally going to be sold, for 550,000 Euros.

[Anonymous]

@logan wrote:

China seems to be interested in investment in Spanish debt.
http://www.businessinsider.com/the-market-is-seeing-right-through-chinese-promises-to-keep-investing-in-spain-2011-1
We should not take this as a sign that China expects Spain to rebound any time soon. More that they seek a high return on their enormous capital reserves.

http://online.wsj.com/article/SB10001424052748704405704576063564193989214.html

[katy]

http://www.diariosur.es/rc/20110107/economia/prima-riesgo-dispara-temor-201101071255.html
http://www.diariosur.es/v/20110108/economia/mercados-atacan-espana-disparan-20110108.html

Not looking so good here. The Chinese have money to burn and they want the high interest rates Spanish debt demands. Don’t know if you have noticed but the IBEX has been crashing since before christmas. Other European markets lose 0.01% whilst the Spanish loses an average of 1.5% daily. May pick up tomorrow though after the Chinese announcement.

Main point from above article.
Next week a delegation of 9 from the EU arrive in Spain to find out the true extent of Spain’s financial crisis.

Spain’s banks hold a huge amount of Portuguese debt.

[Anonymous]

@katy wrote:

http://www.diariosur.es/rc/20110107/economia/prima-riesgo-dispara-temor-201101071255.htmlot

Not looking so good here. The Chinese have money to burn and they want the high interest rates Spanish debt demands. Don’t know if you have noticed but the IBEX has been crashing since before christmas. Other European markets lose 0.01% whilst the Spanish loses an average of 1.5% daily. May pick up tomorrow though after the Chinese announcement.

Main point from above article.
Next week a delegation of 9 from the EU arrive in Spain to find out the true extent of Spain’s financial crisis.

Spain’s banks hold a huge amount of Portuguese debt.

sorry katy but your link is not working.

[katy]

Sorry now edited. The second one is worth translating.

[Anonymous]

Extract from yesterday’s New Statesman online:

Q: What will be the best trade of 2011?
A: Buying sovereign debt. I’ll be buying cash bonds in short-dated maturities issued by Portugal, Ireland and Greece. Everyone else is selling still, and the returns are amazing for what is basically German and French risk. Portugal is the raciest, because if Spain does go down, it will be massively hit.

A more off-the-run trade is buying up Spanish property. The cajas won’t sell you foreclosed property at the clearing price, but they will sell it at the price they hold it on their books and give you a 98 per cent, non-recourse mortgage at close to nought per cent interest. It means you put down a couple of grand and, if my nightmare scenario doesn’t play out and Spanish property recovers, you make a fortune.

Q: A final message for New Statesman readers?
A: Warren Buffett got it right: “Be fearful when others are greedy, and greedy when others
are fearful.”

http://www.newstatesman.com/banking-and-insurance/2011/01/european-bank-spain-property

[katy]

Probably come out as one of the most stupidest financial tips of the year 🙄

Buy an overpriced bank property, mortgage yourself to the limit (don’t spanish mortgages have a high set up cost?). 11% oncosts for fees and taxes. Rental market dead. Yearly community fees and council taxes to pay. Unless prices rise by about 30% over the next couple of years it is a no brainer.

Why does everyone use that overworked quote from Buffet…it is correct but he wasn’t refering to the spanish property market 😆 There is also another quote from him. Can’t remember the exact words but it said to leave alone old asset booms which have since failed and try something different.

[Chris M]

@katy wrote:

Probably come out as one of the most stupidest financial tips of the year 🙄
Why does everyone use that overworked quote from Buffet…it is correct but he wasn’t refering to the spanish property market 😆 There is also another quote from him. Can’t remember the exact words but it said to leave alone old asset booms which have since failed and try something different.

Jeeze, that blew a hole in my boat, was going to use that in my next post!

Only happened to glance up and see this I tend to ignore the top four of five, but was very interested to see the comment about the advice to buy a bank financed unit… I get your points Katy, they all good enough, but if there was a number of units that were in a development that was 90% plus sold, done and dusted, all finished and well managed.

If these units were down from prices that were genuinely purchased at 4 years ago, by 30% – 40%, and if the bank does have a genuine offer of 100%, surely to goodness there is mileage in that.

I want to start a thread on that very subject, but I don’t want to be commerical or ‘up talking’ but I am fascinated by the prospects of one resort, and i do think the Buffet comment works in that regard.

You are bang on with your comments, but some people could do very well if there is any kind of recovery.

[Anonymous]

well, never mind any recovery; anyone buying at 40% off 2005 prices with 100% loan at current low interest rates is going to be very happy and gets a good deal!!! as long as they buy in a good location (and we now know what that means) a business opportunity Mr McCarthy i would think????????some Spanish agents i know have sold a few hundred to locals who still have jobs and by luck hadn’t bought a property before the crunch came!!!!

[Chris M]

@UBEDA wrote:

well, never mind any recovery; anyone buying at 40% off 2005 prices with 100% loan at current low interest rates is going to be very happy and gets a good deal!!! as long as they buy in a good location (and we now know what that means) a business opportunity Mr McCarthy i would think????????some Spanish agents i know have sold a few hundred to locals who still have jobs and by luck hadn’t bought a property before the crunch came!!!!

An exceptional opportunity Mr Ubeda and one that is becoming more and more evident as being an outstanding deal for a number of people, can’t quite decide whether I want to talk about that or not though, there is perhaps a bit of a mini boom in that scenario – after the storm stuff really.

[katy]

Said in today’s diariosur that over 90% of embargoed property auctions in Marbella are deserted. Even luxury villas at 50% off are not selling. They comapre this with over 4 years ago when they were queuing to get in.

[logan]

Mr McCarthy.
There are no ‘outstanding deals’ on property in Spain. Just some finally getting close to fair value and most having a very long way to go before reaching their true worth.

[Chris M]

@logan wrote:

Mr McCarthy.
There are no ‘outstanding deals’ on property in Spain. Just some finally getting close to fair value and most having a very long way to go before reaching their true worth.

With respect Mr Logan,

If someone gets close to fair value, how does that translate to then being conversely, a long way from reaching their true worth?

Regardless, your perception of what is an outstanding deal – I presume to be that of a speculator / investor, or whatever other term you prefer – is perhaps somewhat different from that of others.

So, I venture you might be wrong, I don’t see that you alone get to decide for everyone what is an outstanding deal per se, it is all down to the individual is it not?

[logan]

@Chris McCarthy wrote:

So, I venture you might be wrong, I don’t see that you alone get to decide for everyone what is an outstanding deal per se, it is all down to the individual is it not?

Of course I don’t speak for others. I only write from my extensive personal experience as a property investor and hope to alert potential buyers to be aware what a minefield Spain is for the inexperienced.
It’s true that I have a dislike for property agents and their like who hype up the truth and spin situations to suit themselves without a care for their victims and yes they are victims.
Spinning the true situation in the Spanish property market like suggesting a very ordinary purchase as an “outstanding deal” is what I protest about.
How can 100% LTV mortgage ever be outstanding? Interest rates are expected to rise in the EZ soon. How will the debtor pay back the debt? Plus the other rising obligations.
If the buyer had cash the seller would reduce the price further. Especially if it’s a bank. They are desperate for cash.
The true worth of a property is what someone is willing to pay and what the seller is willing to receive.
Headline prices are meaningless.
Fair value is based on many differing criteria and from my knowledge most property for sale right now in Spain remains far from it.

[Anonymous]

If 40% off 2005 prices reflect the bottom of the market, then a 100% mortgage deal could represent good value, providing the mortgage rate was fixed over a lengthy period.

If prices fall further and mortgage (interest) rates rise, such a buyer would only be buying into negative equity.

It’s back to the perennial problem for any prospective property buyer in a volatile market, a market which has plummeted for at least three years now. Because of its volatility, and one just needs to look around the events in the Middle East, almost anything can happen and happen quickly.

If market sentiment changes, if Spain is once again considered as a safe destination in a turbulent world of uncertainty, and if the bottom has truly been reached, then, despite the overhang and sour taste of corruption still in the air, prices could start rising again, and rapidly at that.

Those sitting on their hands, complaining at every opportunity, will have missed out.

[rt21]

Well well well. The Spanish Government really do need us Brits to kick start their property market and by implication their economy.

“The British are our highest priority and are those about whom we are most concerned,” Mrs Corredor ( the Spanish housing secretary) told The Sunday Telegraph. “It is true that there has been… an image problem. Now we want to reassure the British, and all foreigners, that we are doing everything possible to put the details clearly on the table.”

see the following link

http://www.telegraph.co.uk/news/worldnews/europe/spain/8305743/Spanish-housing-minister-appeals-to-British-buyers-to-return.html

Very reassuring words from Mrs Corredor and I am so pleased that it is just an image problem because I had thought the problems went deeper than that!

She might have used the words of Lord Kitchener “Our Country needs you (Buy Now)”

Richard

[Anonymous]

If she thinks this is a Image problem even allowing for the political language. clearly shows she has little or no idea of the issues. If she needs to clear the image. She should do the following:
Pay people like Mr & Mrs Prior now with compensation, return all the land grab with compensation, enforce all bank guarantees, get rid of all the corrupt lawyers with zero tolerance of the others, sack all at the Colegio de Abagados and replace it with a beefed up system, sack all the Notary & judges & again zero tolerance of the others, break the power of Junta de Andalucia. Certain rules regulations should be common to all Provinces/Regions, monthly presentation of Bank statement/activities to a regulatury bodies of Mayors of different town, cities etc. A punative stances anybody found guilty i.e. throwing the key away. Once the above is enforced for say atleast five years than we have a start, Treat the forignors the same as Spaniards in terms taxes, laws. The situation is really like Preseident Mubarak nobody beleives or trust what he says. Spain finds itself in the same position. Yes an EU member state.

[logan]

I agree with Shakeel, major political reforms are needed in Spain. Not least a reduction of regional political power.
However we should remember that Spain does not have a long history of pluralist democracy, rule of law and political accountability.
Spain simply does not function like northern EU states where liberalism and political freedoms have existed in their institutions for a very long time.
Even before Franco and the civil war, Spain was a political mess, with a useless monarchy, where paternalism and the Catholic Church ruled every aspect of Spanish life.
Spain has made great strides to overcome its past since Franco. There is still a very long way to go.
It takes many generations to overcome negative culture even with shiny new laws the EU implement and are mostly ignored on the ground.
In my view the major fault lines which breed so much corruption is a lack of accountability and effective supervision.
They could start by creating a whole new structure with the political will to make that effective and laws to back it up to give it teeth.

[Anonymous]

Wow, although I never really agree with most of the opinions on this forum, I think Logan has painted a very clear picture of the sociological and historical structure of Spain’s past and present. I really do hope that something new is put in its place although regional governments will always have far too much clout.

[Anonymous]

Logan. I fully agree with your analysis. Spain has the advantage of not evolving but jumping straight onto that desired level. Just like the road, train infrastruture etc.

Yes, regions may have variotions but fundamental rights & wrongs should be comman. One region cannot allow for shooting some one & other does not. The Accountabilyty & supervision should be done from yesterday & with vigor.

[rt21]

just read a rather cynical article on eye of Spain about the property market in Spain

see link below

http://www.eyeonspain.com/spain-magazine/property-crash-happening.aspx

This surely cannot be true particularly in Andalucia where the Junta has been keeping a very watchful eye on the industry over the last 20 years

Richard

[Anonymous]

I dont know in what context to do you mean watchfull eye ???? Whole blocks, Commercial center’s have been created in under their watchfull eye.

[katy]

Yes the junta have watched the whole coast being lined in concrete, the whole countryside ruined by illegal villas.

The article sounds about right to me. Those Developers always did work on the robbing Peter to pay Paul system.

[angie]

And some of these bar stewards who mis-sold are also relaxing in Thailand and other places, and still mis-selling off-plan properties, aren’t they Blagger Man et al? BTW he is ex Awful!!!

[logan]

Having read the posted article I think the writers have described quite accurately how Spain ended up in the mess it’s currently in.
Having been involved with similar projects myself some years ago I can confirm that’s how most of it was done.
Planning permission post building was simply the only way projects could get off the ground. You gave the town hall a ‘fait accompi’. They had to comply or face the wrath of locals anxious to have the developments built for local trade and employment. In those days regional and national government could not give a stuff if rustic land was built on.
Buyers deposits usually provided a percentage of the start costs and were happy with their completed purchase most of the time.
Of course it’s all very different now and had the recession not arrived elsewhere in the world the developers would be still at it. Although rustic land is now a taboo except for the really crooked. The likelihood of getting away with it is now zero.
The banks have learned a very sorry and expensive lesson. It’s unlikely they will ever be conned again in quite the same way. Yet I remember other recessions and they same thing was said then. There is nothing new under the sun.
Greed is a very powerful master.

[Anonymous]

Richard – oh the Junta was keeping a watchful eye alright, on their ever-expanding tax coffers. It must have been like Christmas everyday.

My developer (who openly admitted to us they bribed the Town Hall to get the building licence because “things were done differently in those days”, later revoked) is still in Spain doing very well thank you very much. So much so that last year they teamed up with RE/MAX and opened a new showroom bang in the middle of Centro Plaza, Nueva Andalucia. No skulking off to Thailand for him.

[rt21]

Yes Charlie that little lot in Seville “see no illegal hear no illegal” have a lot to answer for. The sooner those self serving PSOE politicians are booted out in the next election cannot be a day too soon.

Richard

[Anonymous]

It’s not my favourite newspaper, but I think you need to read all the news to get an accurate picture, whether it’s an endless list of statistics, prejudiced comment, or the occasional human touch.

http://www.dailymail.co.uk/news/article-1359029/They-dreamt-better-life-Costas-Now-villa-values-HALVED-pensions-crashed–afford-come-home-Now-really-bad-news-worse.html

Those little, exaggerated stories are worth a read and with a bit of mental editing, what Joe Bloggs says from Essex is just as important as some finance minister from Brussels.

2011 even sounds an awful year and so it has proved only a few weeks into it. Arabia is in flames and all eyes are on Saudi Arabia. If the oil stops, there will be financial meltdown all over the West, but even without such an extreme scenario, austerity measures will ensure that property prices will fall in most places.

Spain, having started off from an impossible high, is already well down and the country’s various problems will not go away in this troubled year. Thank God for the sunshine.

[Anonymous]

Hmm, won’t be going to A Place in the Sun this year after reading that!

Just out of curiousity, seeing as most of you are Brits, do you still think that there is a market for rural property in Spain?
(I’m talking about large, over 10.000 m2 plots). They really got a hard time (most of the time rightfully so, but not every single one was illegal built), but after all the press they had, do any of you think that there is a market for them?

thanks for the feedback.

[logan]

These are the obstacles against a market in such property:-
1. Rural land is by definition just that. Any planning permission is suspect. You might think you have it, have papers which say you have it and may be told so by developers/ local mayor. Until you are served a demolition notice by the regional government that you do not.
2. Trusting builders and developers to deliver said property on time and in budget without running off with your money.
3. Any rural property will be burgled on a regular basis when you are not there.
4. Not desirable for letting. Nobody wants holidays in the boom docks.
5. Quality of infrastructure, roads, street lighting, electricity and water. In summer rural properties have their water rationed.
6. If you need a mortgage banks in Spain are not lending, especially on rural properties which may turn out to be illegal.
7. Difficulties for resale should you wish to move.

Even buying an existing house on rural land is suspect. A lawyer can check it’s legality but do you trust even that? I have had personal experience. It took me years to legalise a property I had bought with such assurances. Fortunately back then it was possible, now it would be demolished.

[Anonymous]

I think where we Brits went wrong with those fincas on 10,000 metre plots was in our misunderstanding of their purpose. They’re parcels of land for growing vegetables and raising animals, with small dwellings not meant for permanent use, more for animal shelters and storing farm produce.

They could only ever be legally built upon by keeping exactly to the original size and character, and growing things or raising animals would be part of the deal. They were never meant to be connected to the utilities needed for permanent occupation, criss-crossed with ugly tarmac roads and satellite dishes everywhere.

And if the coastal properties aren’t selling in the present climate, I doubt if the fincas will.

[Anonymous]

Definite signs of improvement

I am doing in-depth research into the Spanish holiday-home market the likes of which does not exist today in Spain.

Thanks to work-load of said research I’m too busy to go into it in depth right now, but I can tell you that I am seeing lots of signs of improvement.

The market is still depressed compared to normal times, and very depressed compared to the insanity of the boom, but some things do seem to be getting better. Quality property in all price segments is selling at the right price. Demand is more diversified than ever.

The only way to know this is to get in a car and spend weeks driving around the Spanish coasts talking to agents, developers, lawyers, and house-hunters, as I am doing. That is the only way to get a true picture and a bigger picture that what is going on in your street.

One of these days I’ll write an article about it.

Nice to be able to report some good news for once. 😀

[katy]

Best information would come from talking to people who have recently bought 💡 There should be a lot around if it’s true.

[Anonymous]

Mark, information has to be in the right, in right time & in the right format. By the time you write about it. Wjhat good it will be.

[Anonymous]

???????????????????????’

[Anonymous]

@mark wrote:

I am doing in-depth research into the Spanish holiday-home market…..

The only way to know this is to get in a car and spend weeks driving around the Spanish coasts talking to agents, developers, lawyers, and house-hunters, as I am doing. That is the only way to get a true picture…..

Mark, I do have to question the wisdom of taking the words of three groups of people (agents, developers, lawyers) many of whom were actively involved in colluding with the original corruption.
Agents bullshitted purchasers with investment potential and/or the legal status of properties. Developers bribed their way to do business, even using deposits to bolster their cash flow and fund other developments. Lawyers colluded with the first two groups in order to enjoy a huge flow of business, ignoring the interests of their clients. Their mass failure to obtain Bank Guarantees, their failure to ensure legality/acknowledge illegality of properties, and ignoring contact from clients once the doo-doos hit the fan being just three examples of their unprofessional behaviour.

No doubt you will reply the ones you talked to were not of that calibre but how would you know?
My developer had an excellent reputation, won awards in London, and is still operating from prestigious offices. Likewise my international agent and international law firm.
To anyone not in the know, they’re the face of complete respectability.
So having been screwed by all three groups re. my purchase, personally I would take anything any of them say with a pinch of salt.

There is only one way to know the true state of the market – the number of sales completed.

[Anonymous]

@UBEDA wrote:

???????????????????????’

Your best comment ever. Keep up the good work.

[katy]

Thanks Charlie, answers UBEDA’s questions. I also can’t see how talking to the bullshitters proves anything, that’s why I suggested talking to people who have bought recently (shouldn’t be any problem finding them…should they? 😆 ) I know a few spanish agents, used to play golf with them. Nice guys but regarding anything to do with property they lie through their teeth…even to each other

[Anonymous]

@mark wrote:

Definite signs of improvement

I am doing in-depth research into the Spanish holiday-home market the likes of which does not exist today in Spain.

Thanks to work-load of said research I’m too busy to go into it in depth right now, but I can tell you that I am seeing lots of signs of improvement.

The market is still depressed compared to normal times, and very depressed compared to the insanity of the boom, but some things do seem to be getting better. Quality property in all price segments is selling at the right price. Demand is more diversified than ever.

The only way to know this is to get in a car and spend weeks driving around the Spanish coasts talking to agents, developers, lawyers, and house-hunters, as I am doing. That is the only way to get a true picture and a bigger picture that what is going on in your street.

One of these days I’ll write an article about it.

Nice to be able to report some good news for once. 😀

Good work Mark. I too am hearing things are improving on the sales side of things. Can’t wait to read your blog. Positive good news is what is needed to help move the market in Spain. And as you say, being on the ground and living it is the best way to get a true picture. Sitting on the net all day guessing and moaning about what might happen is not! 😉

[Anonymous]

@jonas wrote:

Positive good news is what is needed to help move the market in Spain.

Which is why the bullshit from the bullshitters continues. 🙄

And actually Jonas, what is REALLY needed to help move the market is for the Spanish Government to address the problems of property buying, some of which was listed by Ozmunky:
Quote:
(i) tax residency rules in Spain if you buy — a desperate country in the future looking for money isnt good for your wealth
(ii) lack of rule of law — Spanish legal system isnt up to it if something goes wrong
(iii) market transparency is extremely poor
(iv) becoming a ripoff target for the local councils that have shown they are un-accountable and out of control

Saving the best ’til last: You can buy a property/build your new home with all the legal documentation in place complete with official stamps, only to have the said documentation later revoked and your property declared illegal. How special is that?!

[Anonymous]

@charlie wrote:

@jonas wrote:

Positive good news is what is needed to help move the market in Spain.

Which is why the bullshit from the bullshitters continues. 🙄

quote]

now I don’t think calling Mark a “bullshiter” is very nice or appropriate for that matter…

I assume that is who you are referring to as all I have done is merely agree with him…. 😕

[Anonymous]

Relax Jonas, I would never do that – would get booted off the forum PDQ! 😆

Was referring to the ‘group of 3’.

[Anonymous]

Charlie said”

There is only one way to know the true state of the market – the number of sales completed.”

Exactly Charlie, which if you look at last years figures; up 6% on 2009 at 460,000 – these figures widely reported on here; but disregarded by the “negative crowd” is a fact!!!!!!!!!…………. and don’t forget MOST people who have bought in Spain didn’t buy a problem!!! regards the “professionals”you dealt with – well, frankly It couldn’t have been to difficult to work out that they really were s_ _ m of the earth 👿 ❗ – those clothes, cars, rings and watches – never mind the accents YIKES!!!!!!!!!!!!!!!

[Anonymous]

Developer and lawyer/lawfirm were Spanish, agent wasn’t English either. Any other misconceptions you’d like to have a stab at?

[Anonymous]

@UBEDA wrote:

…………. and don’t forget MOST people who have bought in Spain didn’t buy a problem!!!

But tens of thousands did, but I don’t supppose they matter much to you. Must be crushing for you having to be reminded of them.

[kgpoc]

Wow hot and bothered under the collar over a spark, but it sounds like others see the beginning of a forest fire..

Lets not forget the US market sales volume has been rising for a year, but the price has stayed in decline.

I did a little leg work too and sat down with 2 realtors yesterday to see their views. They are seeing an increase in sales and activity however not a single buyer has needed a mortgage… I think that spark will remain a spark in 2011..

[Anonymous]

I don’t understand why everyone on here gets annoyed at any good news! Don’t make sense to me. Surely everyone on here is on here because they either want to buy or sell. Surely if the market is reaching a bottom that should be good news for all. Buyers can finally buy their apt. and sellers can sell. Or am I missing something ? The only thing I can think I am missing is maybe buyers aren’t happy with the prices and want even more of a drop! Whether people like it or not, you are going to start hearing good news about Spain at some point, so sooner rather than later I say. Mark lets see that blog!

[Anonymous]

jonas wrote:

I don’t understand why everyone on here gets annoyed at any good news! Don’t make sense to me. Surely everyone on here is on here because they either want to buy or sell. Surely if the market is reaching a bottom that should be good news for all. Buyers can finally buy their apt. and sellers can sell. Or am I missing something ? The only thing I can think I am missing is maybe buyers aren’t happy with the prices and want even more of a drop! Whether people like it or not, you are going to start hearing good news about Spain at some point, so sooner rather than later I say. Mark lets see that blog!

Of course buyers are not happy as they are certain that the asking prices are out of reality.
Maybe unique properties can sell, but what about the millions of 2 bedroom apts. which are in over-supply?

Spain has 20% unemployment so locals cannot afford to buy holiday properties unless they are very cheap.

UK buyers worry about their pensions and salaries, Germans have bough as much as they could. Who else is to buy?

Of course there is a big interest in Spanish property market but nobody is stupid to buy at the unrealistic current prices. Whoever buys now, they are knife-catchers or people who did not do their homework.

[Anonymous]

@ralita wrote:

@jonas wrote:

I don’t understand why everyone on here gets annoyed at any good news! Don’t make sense to me. Surely everyone on here is on here because they either want to buy or sell. Surely if the market is reaching a bottom that should be good news for all. Buyers can finally buy their apt. and sellers can sell. Or am I missing something ? The only thing I can think I am missing is maybe buyers aren’t happy with the prices and want even more of a drop! Whether people like it or not, you are going to start hearing good news about Spain at some point, so sooner rather than later I say. Mark lets see that blog!

Of course buyers are not happy as they are certain that the asking prices are out of reality.
Maybe unique properties can sell, but what about the millions of 2 bedroom apts. which are in over-supply?

Spain has 20% unemployment so locals cannot afford to buy holiday properties unless they are very cheap.

UK buyers worry about their pensions and salaries, Germans have bough as much as they could. Who else is to buy?

Of course there is a big interest in Spanish property market but nobody is stupid to buy at the unrealistic current prices. Whoever buys now, they are knife-catchers or people who did not do their homework.

Most properties have already dropped in price, some up to a staggering 50% off boom prices. The only ones which will drop are in the run down locations where no one wants to buy anyway. I doubt very much any good value properties in good locations will drop by much more than they already have. If they are in good locations the owners will just rent them out until the market picks up as they are always rentable in good locations. It depends if you don’t mind settling for second best I suppose.
Most buyers only go by what sites like this say so are in a lot of ways misguided. Maybe Mark will enlighten us to his findings, as things do change on the ground.

[katy]

Jonas I agree (more or less) about prices but not the rental. Rental income has dropped drastically and many are unable to rent at all. I know someone who bought an investment property 18 months ago at Miraflores golf. He was told the property had a long term tenant. Of course, it didn’t and it has remained unrented since that time, even after reducing to less than anyone else is asking around there.

[Anonymous]

@katy wrote:

Jonas I agree (more or less) about prices but not the rental. Rental income has dropped drastically and many are unable to rent at all. I know someone who bought an investment property 18 months ago at Miraflores golf. He was told the property had a long term tenant. Of course, it didn’t and it has remained unrented since that time, even after reducing to less than anyone else is asking around there.

As I say renting also depends on location. If it is in a good location then it will rent easily. This is why I say that the ones in the worst locations prices will drop as they will struggle to even rent. But for summer rentals properties in good locations will always rent feasably well. I speak as I own a well located property and it rents no problem. On the other hand I also have friends who have properties in second line locations in not such good areas and they are struggling to rent, but saying that, they are getting bookings for 2011. So it depends where your property is based. As far as properties on golf courses, who wants to spend their whole holiday on a golf course and pay over the odds for it with high golf fees? Thats the reason that person is struggling to rent. I wouldn’t touch an apartment on a golf course even it you gave it to me for free! ( well, maybe for free I would think about it 😀 )

[Anonymous]

I’m not expecting the market to blast off or anything, but I was surprised by how much activity there is.

Norwegians in particular are out in force. They are taking advantage of up to 50pc house price falls plus a 20pc appreciation of the Norwegian Krone against the Euro, then of course they have all that oil, and not much sun. A villa in sunny Spain now looks like great value to them. Makes perfect sense.

Bit like when the Brits had a strong pound, surging house prices, and Spain seemed cheap as chips. The difference is the Brits bought on the way up and Norwegians are buying on the way down.

It always boils down to relative wealth and perceptions of value.

[Anonymous]

I know we focus on holiday homes in popular tourist areas, but sometimes we need to look at the bigger picture.

Latest figures from Eurostat (“housing conditions in Europe 2009”) show that 83pc of Spaniards are owner-occupiers, one of the highest levels in the EU. Only 57pc of Austrians, in contrast, are owner-occupiers.

Spaniards are the biggest market for holiday homes in Spain, and they definitely have the property-ownership bug. You can be sure there is a lot of pent-up demand.

[katy]

Precisely why I pointed out that the Germans, Swedish, Dutch etc. are unlikely to be flocking to buy right now….they have some of the lowest home ownership in the world!

The spanish are rarely in the market for 2/2 glut of homes. They cannot travel without the extended family 😆 (Infact they even do their weekly shopping in groups of 10+). They also do not go for homes with high community fees.

[Anonymous]

The Spanish ownership by 83%. One of the factors is that Spanish people leave the property to the family & not to “Battersea dogs home” THe same applies in Italy .

[Anonymous]

Why a Brit should buy presently is beyond me. The pound’s tumbling v the euro and the market is saturated with empty units (so the prices are still, by definition, very soft too). These are classic economic indicators as why not to buy now.
Renting is the way to go for me. Far, far less hassle. Who wants to invest(?) in an asset that is probably overpriced, using a soft curency to buy it and paying massive expenses to buy, and hold, too?
Let the landlord take the hassle. If the Spanish authorities are serious about encouraging foreigners to invest in property then they should address their cumbersome laws and taxes towards non-Spaniards and make it easier for us to make our minds up.
I’d love to hear some unbiased reasons why now is a good time to buy (not from those with vested interests in talking the market up because they earn a living from property deals).

[Chopera]

@rialto wrote:

Why a Brit should buy presently is beyond me. The pound’s tumbling v the euro and the market is saturated with empty units (so the prices are still, by definition, very soft too). These are classic economic indicators as why not to buy now.
Renting is the way to go for me. Far, far less hassle. Who wants to invest(?) in an asset that is probably overpriced, using a soft curency to buy it and paying massive expenses to buy, and hold, too?
Let the landlord take the hassle. If the Spanish authorities are serious about encouraging foreigners to invest in property then they should address their cumbersome laws and taxes towards non-Spaniards and make it easier for us to make our minds up.
I’d love to hear some unbiased reasons why now is a good time to buy (not from those with vested interests in talking the market up because they earn a living from property deals).

I guess a Brit might buy if they held a lot of money in something other than pounds (e.g. euros, gold, etc) and were looking to buy heavily discounted property in prime locations with an international appeal. Personally I agree that the Spanish market has further to fall overall, but that’s largely irrelevant since a buyer should only be concerned with the local property market where they intend to buy. Yes there is an oversupply in Spain but you have to consider where that oversupply is (and avoid it like the plague).

Also I suspect a lot of these empty houses in Spain will simply never be bought, since they are grouped together in new towns which may well eventually be abandoned. They show up on the stats but they aren’t really part of the market.

[Anonymous]

@Chopera wrote:

@rialto wrote:

Also I suspect a lot of these empty houses in Spain will simply never be bought, since they are grouped together in new towns which may well eventually be abandoned. They show up on the stats but they aren’t really part of the market.

Good point.