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Well I thought I’d set the ball rolling…
My take is that the health of a property market should be measured in sales volumes rather than house prices, and that away from the costas there is no chance of sales volumes increasing. The new austerity measures combined with tighter lending criteria, increased mortgage interest rates and high levels of negative equity will mean renting remains much more attractive to all but the tiny few who are in a financial position to take advantage of the bargains that will appear.
On the costas there is the possibility that Spain will drop out of the euro and that the ensuing currency devaluation would make coastal property more attractive to foreigners. However I don’t think that will happen this year.
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@Chopera wrote:
Well I thought I’d set the ball rolling…
My take is that the health of a property market should be measured in sales volumes rather than house prices, and that away from the costas there is no chance of sales volumes increasing. The new austerity measures combined with tighter lending criteria, increased mortgage interest rates and high levels of negative equity will mean renting remains much more attractive to all but the tiny few who are in a financial position to take advantage of the bargains that will appear.
On the costas there is the possibility that Spain will drop out of the euro and that the ensuing currency devaluation would make coastal property more attractive to foreigners. However I don’t think that will happen this year.
I wonder what people do with the holiday properties… If 95% of them were empty in the Christmas/New Year period and the weather was glorious, when do people use their holiday properties? Only during the Summer? Is it worth paying loads of money for something which is not used most of the year?
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In the past holiday homes looked an attractive purchase because buyers intentions were to let them to others for holidays. Once the figures made sense. Cost and overheads on paper at least could be covered by rental income and an annual holiday for the owner.
They could sit back and watch his investment rise every year. Everyone was a winner.Now things have changed for many diverse reasons. Not least of these is the chronic over supply and the desire by many for a more adventurous holiday experience.
In 2012 it makes absolutely no sense at all to buy a holiday home either in Spain or elsewhere unless you are young, have money to burn and can afford to wait for years to see any return.My prediction for the Spanish property market in 2012 is more of the same only worse, much worse. Wish I could be optimistic, I am about most things but not this.
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@flosmichael wrote:
[I wonder what people do with the holiday properties… If 95% of them were empty in the Christmas/New Year period and the weather was glorious, when do people use their holiday properties? Only during the Summer? Is it worth paying loads of money for something which is not used most of the year?
To answer your question we have our holiday property 7 years now up until 2008 I used to fly out when kids were off school which is approx every 6 weeks and then for 5 weeks in summer, we certainly got great use out of it and it was great to be able to leave personal things there. However with the recession and austerity measures here in Ireland, flights have become expensive so we don’t travel as often perhaps once/twice a year – we rent it out instead. I have enjoyed the holidays in Spain over the years and it was great for the kids but I will be honest hindsight if I had a crystal ball and saw what was coming down the line I would have rented instead of buying.
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@flosmichael wrote:
I wonder what people do with the holiday properties… If 95% of them were empty in the Christmas/New Year period and the weather was glorious, when do people use their holiday properties? Only during the Summer? Is it worth paying loads of money for something which is not used most of the year?
Yes these days I can’t see any reason for a non-resident to buy a holiday home in Spain (even if they used it over Christmas as well). Prices need to come down to real bargain levels for it to be worth their while.
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@flosmichael wrote:
@Chopera wrote:
Well I thought I’d set the ball rolling…
My take is that the health of a property market should be measured in sales volumes rather than house prices, and that away from the costas there is no chance of sales volumes increasing. The new austerity measures combined with tighter lending criteria, increased mortgage interest rates and high levels of negative equity will mean renting remains much more attractive to all but the tiny few who are in a financial position to take advantage of the bargains that will appear.
On the costas there is the possibility that Spain will drop out of the euro and that the ensuing currency devaluation would make coastal property more attractive to foreigners. However I don’t think that will happen this year.
I wonder what people do with the holiday properties… If 95% of them were empty in the Christmas/New Year period and the weather was glorious, when do people use their holiday properties? Only during the Summer? Is it worth paying loads of money for something which is not used most of the year?
After a few years some tire of holidaying in the same old place. Xmas flights can be prohibitive for families. The weather is not always glorious at Christmas and even marbella is dead in December with lots of chiringuitos and good restaurants closed. I can remember a couple of years with 20C but remember even more rainy ones with 13C average. Perhaps many 2nd home owners have been during the last few years and thought never again 😀
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@logan wrote:
In the past holiday homes looked an attractive purchase because buyers intentions were to let them to others for holidays. Once the figures made sense. Cost and overheads on paper at least could be covered by rental income and an annual holiday for the owner.
They could sit back and watch his investment rise every year. Everyone was a winner.Now things have changed for many diverse reasons. Not least of these is the chronic over supply and the desire by many for a more adventurous holiday experience.
In 2012 it makes absolutely no sense at all to buy a holiday home either in Spain or elsewhere unless you are young, have money to burn and can afford to wait for years to see any return.My prediction for the Spanish property market in 2012 is more of the same only worse, much worse. <span style="font-size:200]Wish I could be optimistic, I am about most things but not this.
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This made me laugh. Optimistic! Logan you are the last person I would call optimistic.
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If you have a ‘positive’ or optimistic personality and happen to be an investor, putting your financial wealth into market sectors where your ‘positive’ and optimistic personality sees growth against every trend you will soon arrive at penury.
Successful market investors are pessimists by nature but then become optimists only by tempering opportunity with knowledge and experience. -
@angie wrote:
Well said Angela, an honest assessment from someone who has a holiday home and a vested interest, I’m sure there are 1000’s of people abroad who would not be so frank, many of whom will be saying ‘all’s well’ where they bought.
I wish you luck renting and/or selling 😉
Thanks angie, well I think anyone who owns a second property in spain now should be nervous with the euro – we are in unchartered territory.
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Angela, we know several people who are very nervous at present with either holiday homes or permanent homes in Spain which they wish they could sell before they think the Euro could fail.
Presentation and price is very important now, but an idea I have passed to them is the simple fact that there are still lots of Brits who dream of living somewhere warmer and who can’t sell their UK homes easily. However on websites like Gumtree and house swap sites in the UK it is possible to find people who may just be willing to swap homes and lifestyles. It may be worth a try, I don’t think it costs anything either, and some sites might charge a small fee upfront of 70 euros or so but try the other free sites first. Just a thought! 😉
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Hi Angie,
Thanks for the reply – it is reassuring to know that others are nervous also, just speaking to one of my neighbours who has a place in Spain and reiterating what I was saying about being nervous if Euro collapsed – she basically didn’t want to hear! Thanks for tip on swap – I am based in Ireland – the place in spain is holiday home and when I sell – I don’t think I will be taking another foray into a second home!!!!
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I’m confused about the posts here. I’d be more concerned about the collapse of the euro than having real estate prices fall. I’m I missing something?
I don’t know if any of you are following Edward Hugh, but the forecast for the euro is not good.
And if any of you doubt the culpability of large financial firms in the crisis in Europe, see these:
http://www.nytimes.com/2010/02/14/business/global/14debt.html?pagewanted=1
http://www.nytimes.com/2010/02/25/business/global/25swaps.html
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@GarySFBCN wrote:
I’m confused about the posts here. I’d be more concerned about the collapse of the euro than having real estate prices fall. I’m I missing something?
The two risks are synonymous. If the Euro collapses so do Spanish real estate values and any other Eurozone capital investment.
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Angela, I’m back again and hope to re-assure you a bit more despite all the gloom and doom and confusion on this topic!
Firstly you hold a holiday home so some comfort to know it’s not your main home which is the real worry for many in Spain! They must be far more nervous about a Euro collapse!
Second, being in Ireland, should you sell you are not reliant on the UK sterling/euro exchange rate if you sell to Irish or other Eurozone buyers.
I think before a Euro collapse it’s more likely that this will take time, but just my opinion, and I think it more likely that Greece leaving will happen, first then quite a while before any other country leaves. This gives you more time perhaps.
At this stage no-one knows if the EU will break up and the Euro collapse, but before then I’m certain that there will be lots more propping up and delay because of the possible effect on the World economies. Not forgetting that the Euro might well be here to stay anyway.
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I don’t think the Euro will collapse but I do think some countries will eventually have to leave, Greece being the first favourite.
If no major changes are made to treaties allowing a more prominent role for the ECB, the creation of Euro bonds and full fiscal integration with tax harmonisation the woes will undoubtedly continue.
From an investor perspective as long as the risk on of collapse of the single currency remains high, staying out of it is the only realistic option. Risk returns do not justify the investment.
That applies particularly to property within the Eurozone. Even buying at the moment for sole domestic use carries with it high risk of capital loss. Renting does not and is the only sensible option. -
Here’s a very interesting bit of news, which will have implications in many areas
http://www.typicallyspanish.com/news/publish/article_33286.shtml
Buildings which are more than 50 years old are to be obliged to have a so-called ITV/MOT inspection from July. The new legislation affects buildings older than 50 years in towns of more than 25,000 inhabitants. Buildings will be obliged to display a certificate before any flats can be sold.
If I read that correctly, buildings in small settlements (less than 25,000 inhabitants) won’t need the certificate. But if you buy a city flat that is (or soon will be) over 50 years old, then refurbishment may be compulsory if it doesn’t meet the required standards?
I can see this providing some much needed work in the construction sector, and increase the desirability of buildings in smaller settlements. But add extra living costs to the equation for city dwellers. -
In most cities the old buildings are in a deprived area ( I know there are exceptions ) These buildings are occupied by people with low income. The question arises as to how this is going to be paid for not forgetting that the miminum salary in Spain is €641.
How many brown envelopes will be required to obtain this certificate that has to be displayed. I for one will have no confidence in them.
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In Madrid at least any building over 30 years old has to pass the ITE (Inspección Técnica de Edificios) every 10 years. This has been the case for as long as I can remember. I think it’s pretty good because it gives greater peace of mind if you want to buy a flat in an older building, many of which contain older people who tend to be less inclined to carry out building maintenance work.
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@Chopera wrote:
In Madrid at least any building over 30 years old has to pass the ITE (Inspección Técnica de Edificios) every 10 years. This has been the case for as long as I can remember. I think it’s pretty good because it gives greater peace of mind if you want to buy a flat in an older building, many of which contain older people who tend to be less inclined to carry out building maintenance work.
Interesting – thanks for that update. Am I right in assuming the cost of the refurbishment is distributed between the flat owners?
I remember seeing a lot of reburbishment work in Lavapies (an old quarter close to the centre, but with a certain reputation) and thought it was an attempt to attract investors, but it maybe also that legal pressures also forced the issue. But (as with many things in Spain) I suppose the situation differs throughout the provinces. My friend in Valencia once asked me many years ago (early 90s iirc) if I were interested in jointly buying up a delapidated property in the Carmen area – at that time the local council were giving grants to owners who were refurbishing properties in the area. One of those “I wish I’d taken up his offer” moments. -
@DBMarcos99 wrote:
Interesting – thanks for that update. Am I right in assuming the cost of the refurbishment is distributed between the flat owners?
I remember seeing a lot of reburbishment work in Lavapies (an old quarter close to the centre, but with a certain reputation) and thought it was an attempt to attract investors, but it maybe also that legal pressures also forced the issue. But (as with many things in Spain) I suppose the situation differs throughout the provinces. My friend in Valencia once asked me many years ago (early 90s iirc) if I were interested in jointly buying up a delapidated property in the Carmen area – at that time the local council were giving grants to owners who were refurbishing properties in the area. One of those “I wish I’d taken up his offer” moments.I think the Madrid council also provides grants to renovate “edificios señorales” like the ones in Lavapies. They also pumped a load of money into the area to improve it in general. We even looked at buying a flat there a few years ago since it’s so central but cheap(ish) – but in the end we decided against it because we were planning on having kids and there’s a lack of parks and open space in that area. Also those old buildings aren’t laid out that well: lots of corridors and few exterior windows. The area certainly is “colourful” with people from every background there and I think it would be a great place to live for anyone who is adventurous. I don’t think it is a dangerous area – at least not by UK standards – you still get the older generations of Spaniards there who put their sofas on the streets on hot summer evenings so they can have a get together with the neighbours. And next to them you have immigrants from Africa, Bangladesh, Morrocco, China and, well, anywhere really. Which makes it great for trying different cuisines from the regular Spanish fare – a bit of a Brick Lane area, but with much prettier buildings.
I know people who bought in the 90s in central Madrid (places like Malasaña and Chueca that have now been redeveloped) and they are laughing – mortgages for €6000! Lavapies was the obvious contender for the next up and coming place during the boom years, but I’m glad we didn’t buy there.
Certainly if you look at buying any flat in Madrid you must speak to the Administrador who will let you know whether a building has passed its ITE and what other maintenance has been taking place. We almost bought another flat in Madrid because it appeared cheap, but we found out why when we spoke to the Admistrador – they were spending lots of money each year filling in cracks that kept appearing all over the building.
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Lavapies sounds idyllic, a bit like Hackney 😆 Didn’t they have a few problems last summer? Looked but couldn’t find the link. Saw this
“Main complaints….loud music, general dirtiness…2 or 3 families living in 30M2. 3 weeks special Police operation saw more than a 1000 detained and 100 weapons siezed” 😯
http://www.madridhabitable.org/digital/modules.php?name=News&file=print&sid=163
Could be a good investment though. Buy a studio and rent it out to 3 families 8)
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@katy wrote:
Lavapies sounds idyllic, a bit like Hackney 😆 Didn’t they have a few problems last summer? Looked but couldn’t find the link. Saw this
“Main complaints….loud music, general dirtiness…2 or 3 families living in 30M2. 3 weeks special Police operation saw more than a 1000 detained and 100 weapons siezed” 😯
http://www.madridhabitable.org/digital/modules.php?name=News&file=print&sid=163
Could be a good investment though. Buy a studio and rent it out to 3 families 8)
Not too bright a comparison 🙄 , although both Chopera (“colourful”) and myself (“a certain reputation”) alluded to the reputation of Lavapies. Hackney is known by most Londoners as a place of muggings, shootings and killings – I know people who’ve worked there and witnessed murders. You only need to look at the headlines for the last week (not try and confuse folk with a webpage from a year ago, like you did)
“A teenager has appeared in court charged with the murder of a young mother found dead in a car.”
http://www.guardian.co.uk/uk/2012/jan/05/teenager-court-kirsty-trelaor-murderYes, you’re right Hackney had the riots last summer. But it’s the general gun and knife crime that takes place week on week, that’s the scary thing about the place. Much as Lavapies has its edgy side (and I wouldn’t walk around with a lot of money on my possessions there) it’s got a long way to go before it gets as bad.
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There’s a feature here on Lavapies.
As with a lot of these promotional pieces, it mentions the renovation schemes, and the advantages of the area eg transport links, closeness to the city centre. What it does neglect to mention is it does have crime issues, which I suspect will remain for many years to come.
I personally find it a bit “un-Spanish” – a bit like Gracia in Barcelona or Brixton in London – where the number of migrants give the area a distinctive atmosphere. Great for going out and sampling food from different cultures, but a bit loud and in your face for me (but maybe that’s my age showing). Certainly a great place to be based for youngsters heading to the capital.
For me, if I had the money to invest in Madrid, I don’t think I’d choose Lavapies. Plenty of other areas that allow you to sleep at night, but that’s me being an old fuddy-duddy. But for renting out (especially to young expats) – maybe. -
@DBMarcos99 wrote:
@katy wrote:
Lavapies sounds idyllic, a bit like Hackney 😆 Didn’t they have a few problems last summer? Looked but couldn’t find the link. Saw this
“Main complaints….loud music, general dirtiness…2 or 3 families living in 30M2. 3 weeks special Police operation saw more than a 1000 detained and 100 weapons siezed” 😯
http://www.madridhabitable.org/digital/modules.php?name=News&file=print&sid=163
Could be a good investment though. Buy a studio and rent it out to 3 families 8)
Not too bright a comparison 🙄 , although both Chopera (“colourful”) and myself (“a certain reputation”) alluded to the reputation of Lavapies. Hackney is known by most Londoners as a place of muggings, shootings and killings – I know people who’ve worked there and witnessed murders. You only need to look at the headlines for the last week (not try and confuse folk with a webpage from a year ago, like you did)“A teenager has appeared in court charged with the murder of a young mother found dead in a car.”
http://www.guardian.co.uk/uk/2012/jan/05/teenager-court-kirsty-trelaor-murderYou can’t debate can you Stevie, always has to be a personal attack for my posts. No intention to confuse, was just an overview of the area which I suppose hasn’t changed in 1 year! Are you saying those 1000 detained were innocent?
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You can’t debate can you Stevie, always has to be a personal attack for my posts. No intention to confuse, was just an overview of the area which I suppose hasn’t changed in 1 year! Are you saying those 1000 detained were innocent?
I don’t even know why you’re weighing in on this. Both Chopera and I mentioned that lavapies had a certain rep. But no, you had to start making your comments and posting a news report from Spring last year. It wouldn’t surprise me to find out you’ve never even stepped foot in Lavapies, so why this urge to try and convince people you’re some kind of authority? Keep up this and your “it’s cold most in the time in Valencia” and you’re really only destroying your own credibility. Your choice.
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@katy wrote:
Lavapies sounds idyllic, a bit like Hackney 😆 Didn’t they have a few problems last summer? Looked but couldn’t find the link. Saw this
“Main complaints….loud music, general dirtiness…2 or 3 families living in 30M2. 3 weeks special Police operation saw more than a 1000 detained and 100 weapons siezed” 😯
http://www.madridhabitable.org/digital/modules.php?name=News&file=print&sid=163
Could be a good investment though. Buy a studio and rent it out to 3 families 8)
Yup it’s an area not without its problems – but one where I’ve spent many a pleasant evening enjoying a curry on a terraza watching the world go by. Hopefully the area will be able to sort out its problems while keeping its cultural diversity otherwise, given its location, it might end up being one of those bland, trendy places where people judge each other by their make of sunglasses, or the supermarket bags they take to the beach. You know the kind of places I mean 😉
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I never said Valencia was cold most of the time, we were talking about winters and some poster backed this up with weather stats. Are you a parrot you mention this in every attack on me. You are ruining all the threads with your habit of heckling me. I repeat the link was about immigration and just an overview of the area, not meant to be a news story. Similar to when you keep mentioning the riots in the UK last August.
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@katy wrote:
I never said Valencia was cold most of the time, we were talking about winters and some poster backed this up with weather stats. Are you a parrot you mention this in every attack on me. You are ruining all the threads with your habit of heckling me. I repeat the link was about immigration and just an overview of the area, not meant to be a news story. Similar to when you keep mentioning the riots in the UK last August.
It’s you who weighed in with your opinions on Lavapies, when Chopera and I mentioned it in connection to the refurbishment programmes (news item posted by me), and it’s you who raised the comparison with Hackney. You’re trying to have it both ways as usual – don’t heckle and then perhaps you won’t get the responses and facts that annoy you.
I’m quite amenable to ignoring your posts (to save other posters here the annoyance of having to scroll past a spat). But I reserve the right to respond when you heckle.
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@DBMarcos99 wrote:
There’s a feature here on Lavapies.
As with a lot of these promotional pieces, it mentions the renovation schemes, and the advantages of the area eg transport links, closeness to the city centre. What it does neglect to mention is it does have crime issues, which I suspect will remain for many years to come.
I personally find it a bit “un-Spanish” – a bit like Gracia in Barcelona or Brixton in London – where the number of migrants give the area a distinctive atmosphere. Great for going out and sampling food from different cultures, but a bit loud and in your face for me (but maybe that’s my age showing). Certainly a great place to be based for youngsters heading to the capital.
For me, if I had the money to invest in Madrid, I don’t think I’d choose Lavapies. Plenty of other areas that allow you to sleep at night, but that’s me being an old fuddy-duddy. But for renting out (especially to young expats) – maybe.Funnily enough that article mentions a barrio next to Lavapies called “Embajadores”, which is where we ended up moving to instead (an area called “Chopera” to be precise). That article also talks about the benefits of renting out property in Lavapies, but it doesn’t mention the downsides: e.g. the landlord usually pays the community fees, the high cost of maintaining those old buildings, tenancy agreements usually lasting 5 years, etc. You really need yields to be higher than what they are now to make it worthwhile.
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If I’m reading that chart correctly, I would say Spanish property has ‘fallen off the edge of a steep cliff and into the sea’ methinks! 😮
So Mark, that would lead nicely on to my new topic ‘Why don’t Spain’s Gov’t clean their act up with property’?
We can only guess at it, but are there more obvious and fundamental reasons which we don’t know behind their inaction? 🙄
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More pain to come if this writer is correct.
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@Ruefguet wrote:
More pain to come if this writer is correct.
You cannot be serious…. Did you see some of the advertisers on that site?
Dear me, we come to a sad point if we give this chap the time of day!
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@Chris McCarthy wrote:
@Ruefguet wrote:
More pain to come if this writer is correct.
You cannot be serious…. Did you see some of the advertisers on that site?
Dear me, we come to a sad point if we give this chap the time of day!
I hope you understand that the marketing is geered towards your own cookies, country etc. 😆
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i was talking to the estate agent we bought our house off only 2 weeks ago, he was telling me that he has never been as busy give me a run down on all the viewings he had arranged for the next few days and finished up saying that he should not moan as it was all good business, maybe some people do not read the pages of gloom and doom that are printed every day all over europe
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The truth of the matter is that, yes, some of the agents are or say they are busy, but that’s because there are so so many properties on the market now which distorts the real picture. Most of these are heavily reduced properties by desperate sellers which make the agents’ jobs easier now when trying to sell to those thinking they can get a bargain, those that are overpriced are not selling. Even with large price reductions, many of these dated, poorly built properties are not bargains and may still fall further. It no way reflects that Spain has a buoyant property market, it has not!
You only have to look around to see all the unfinished building sites, including those on the many golf courses, where the Developers have gone bust to understand that a lot of the current agents’ hype is a myth.
What you see in Spain and Cyprus too, is a true property crash of immense proportions with desperate tactics to pretend it’s not the case. Spain got what it deserved for their greed in allowing the crooks to operate with impunity. 😉
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@daverob wrote:
i was talking to the estate agent we bought our house off only 2 weeks ago, he was telling me that he has never been as busy give me a run down on all the viewings he had arranged for the next few days and finished up saying that he should not moan as it was all good business, maybe some people do not read the pages of gloom and doom that are printed every day all over europe
Maybe there are also many people in Europe who leave their natural common sense behind when they leave home. The ‘doom and gloom’ is written because it’s actually real, ignore it at your peril.
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Looks like the high-end is limping too. Barcelona atico bought for 3.6€ million in 2006 now listed for 2.8€ million.
The NY Times article is somewhat muddled and seems to be dependent upon ‘facts’ from local real estate industry types. For example, “Night owls who want to be near Barcelona’s famed bar scene are more likely to be drawn to the Ciutat Vella, or Old City, with its network of narrow gothic streets and historic plazas” is ridiculous.
I believe that those who are not tourists and are seeking ‘nightlife’ would be drawn to the Eixample or Gracia. Who wants to mingle with thousands of really tacky tourists in the Ciutat Vella, who are constantly drunk, vomiting, discovering their inner ‘anything goes’ spirit and partying like a rock star for the first time ever?
And the claim that Barceloneta has “potential” belies the fact that yes, it does, but only if much of the neighborhood is gutted. I do like the neighborhood, but those looking for ‘high-end’ amenities are not going to find much of interest there.
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Because most places were way over-valued.
Our case, as i’ve stated before, was that the bank guys wanting to pocket more of our cash so the nice friend of the bank manager came to value the flat way above the amount we wanted to borrow. Wasn’t that nice of him….. If it was that we’d been given the cash i’d hold my hands up to say that we’d overborrowed and it was our fault. They overvalued it to pocket two blank cheques made out with the ‘permission’ of the guarantor signing up to the mortgage. Scum.
It happened to so many people. A flat with a value of 180k when real value was about 95k (in the boom). These are the places which the banks are selling off for 25k but those stuck with their mortgages just can’t even dream of selling.
Very, very sad. Makes me annoyed when so many Brits are talking up the prices just to try to sell their own properties over in Spain as well (or agents). Just tell the truth everyone. At the moment it’s dire. Buy a really cheap place and be a nice neighbour and then the value and quality of living will hopefully go up in years for all of us. It’s all we can hope for.
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Don’t ever forget that in the height of the Spanish property boom, some UK run estate agents were reserving whole blocks of flats and town houses, let’s say at a price of 100k and even buying them at that price, but then they were bombarding buyers in UK, Ireland and other countries saying that they have a super new development of properties at ONLY 130-150k average price, telling them queues were forming, be quick, we’re all buying them, sometimes enabling them to look generous by offering a small fictitious discount, but at the same time grabbing in effect a 30% or more fat commission.
Hence one of the main reasons those properties are still overpriced.
In Bulgaria for example these same agents were selling properties at what looked a low price of say 50-60k but were only truly valued at 30k, trouble is naive buyers thought these properties sounded cheap compared to UK prices and bought in droves only to find they were duped. Meanwhile the agents and their wide boys and girls were bunging champagne down their throats especially in P. Banus, as fast as they could having tucked up their fellow countrymen and women.
Many of these agents were also members of AIPP a subscription based membership open to anyone who could pay the sub, but AIPP was supposed to represent honesty and transparency.
It was just plain crooked selling on a mass scale and these b
s should have been prosecuted and jailed 👿 -
Whenever I have the ‘Spanish Property Argument’ with anyone Spanish I do also accept that it was many British estate agents who dumped their own countryfolk in the XXXXXXXX
I lost my job in a furniture shop (Brit owned) because when I had the chance to warn a lovely just retired couple that the place they were out on a flying weekend visit on their FIRST EVER trip outside of the UK wouldn’t be built because everyone in town had heard that they didn’t have a licence.
I was told by the shop owner than I wasn’t a ‘team player’ when estate agent from big group beginning with a P were told by same couple why they didn’t want to pay a deposit or buy 10k worth of furniture to be stored and delivered when the property was finished (stored for ever??).
I’d do it again tomorrow though. Why hasn’t more be said about these big agencies and also Place in the Sun programmes?? The Spanish built them but the Brits often sold them.
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itsme good of you and I did the same as an agent… though my boss was actually telling his clients the same thing and ended working with companies that tried to suggest the same setups. Nothing bad to say about him or the company.
I don’t agree with the “valuation” thing though since people should use their own common sense about it but I think it’s silly of the banks to put so much faith in valuations. It has to do with stupid bank regulations “Basel rules” which in all honesty is just a stupid way to regulate a stupid system “fractional reserve banking”. I think a good move would be to force banks to have to accept real estate that people want to hand over to them though. Like a pawn shop. That would teach them a lesson not to lend out to much money.
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Well done Itsme and Ardun for sticking to the truth, these agents and the many furniture stores were all hand-in-glove and put profit and commissions before morals and truth.
We also told an English couple that the agent they were with in an inland restaurant we happened to be in, was bullshitting them and this was only 3 years ago, the agent was telling them the market was virtually about to boom again and they shouldn’t waste time, naturally the agent was British, we foiled the fat man’s commission and he’d wasted a couple of days too 😆
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In the event that Spain were able to withdraw from the Euro the result would be a devaluation against other currencies by differing amounts It is not certain how much the devaluation would be against sterling for example of the resulting Spanish currency. Also it is not certain for how long the new rates would hold because that depends on the strength of the counter party.Also a devaluation would result in more buyers and from different countries with different wealth and currency strengths so prices would harden.So a euro exit might not be a disaster for purchasers provided you are patient and not too elderly.
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Had a spam e-mail from an agency called Michael Moon…had a quick glance. Properties in Marbella under 1 million euro, 293 pages. Says it all.
Have noticed a few agents whose names were familiar have turned up on networking sites and are back in the UK. Funny how they went to Spain and re-invented themselves, now they are doing it in the UK but not in property. In another decade (perhaps) they will be back in Spain as property experts.
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Some interesting graphs and numbers in this report, none of it happy reading:
In particular, check out these graphs:
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Yesterday I was speaking to a 3rd-generation estate agent based in Barcelona and covering Catalonia. A real professional who has seen 3 booms and busts in her lifetime. In my opinion she knows more about the reality of house prices in Catalonia than anyone else.
Her figures show that Barcelona area house prices are down 50pc!!!!!
And still no buyers.
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@mark wrote:
Her figures show that Barcelona area house prices are down 50pc!!!!!
And still no buyers.I don’t know why anyone expects there to be any recovery whatsoever in the housing market in Spain. These are my reasons for saying that.
Prices need to fall considerably but they are not. Partly because of negative equity and the ludicrous Spanish legal situation that a mortgage holder can be pursued after repossession. People are trying to hang on to what they have.
Banks cannot issue new mortgages, they have new state and EU capital requirements to meet from reduced funds. They also see an uncertain market and have little confidence it will improve.
The state of the Spanish and EU economy, unemployment, reduced public sector income and the uncertainty that creates in the population.
Higher taxation both in capital gains, income, stamp duty and local charges. IVA will no doubt increase very soon.
There are also many other local factors which contributes to the regional variations in Spain but very few are positive.However all these factors add up to just one thing. The Spanish housing market in the coming months and years is going in only one direction – South.
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For us, it is bittersweet. We have looked at several pisos. It is good for us that there are now more pisos available in our price range, but I do feel that the prices have not fallen enough. The downside is having owners of the flats we visited call us, pleading with us, lowering their prices.
The desperation in their voices is heartbreaking.
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Yes, the human suffering behind this housing-bust is tragic. 1000s of families with young children are in desperate straits, with no light at the end of the tunnel. Some of them were foolish to over-extend themselves assuming the good times would last for ever, but many are just innocent victims, wrong time wrong place.
Not a single good thing came out of the Spanish property boom. It is turning out to be a catastrophe for Spain.
It’s what you get when you allow credit-fuelled greed to run out of control.
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I agree Mark. I am currently on a business trip in Spain and the depression I see everywhere is palpable. Beggars increasing in the streets, no doubt perfectly genuine, then the closed down businesses on every block and the threat of crime.
I travel in Spain on a regular basis and so notice the decline becoming worse on every trip. I’m not a naturally pessimistic, you have to remain focused on the positive to be a successful investor but there is little encouragement here. I saw this coming years ago when I first began posting on here. It was not difficult to see the signs.
I have been criticized by some for writing what I believed was a catastrophe about to happen. Well it’s arrived now and really we have no control over our futures. This thing will run it’s natural course.
Judging the signs of a genuine turn around should be in everyone’s vision. Right now I’m blind.
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@mark wrote:
Yesterday I was speaking to a 3rd-generation estate agent based in Barcelona and covering Catalonia. A real professional who has seen 3 booms and busts in her lifetime. In my opinion she knows more about the reality of house prices in Catalonia than anyone else.
Her figures show that Barcelona area house prices are down 50pc!!!!!
And still no buyers.
Hi Mark,
could you (or the estate agent) clarify this. Asking prices are down 50% or the final figure that properties are selling for are down 50%.
And what does she mean no buyers? obviously sales are going on in in Barcelona. Who were the buyers before, that are no longer present? why is the product not appealing to other market segments, etc….?
thanks in advance
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Hi Andrew,
The impression I got was that asking prices today are down 50pc on sales prices yesterday. So asking prices down even more than that.
No buyers means no buyers at those prices. We are talking about the well-to-do local market. There is demand, but people don’t have the money and banks aren’t lending on anything but their own properties.
The reality is that prices went crazy in the boom and we are still living through a period painful adjustment to the Spanish economy and house prices. It will take time but one day it will be over and the market will return to normal and house prices / income ratios will be back to normal too.
We are just not there yet.
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@mark wrote:
It will take time but one day it will be over and the market will return to normal and house prices / income ratios will be back to normal too.
We are just not there yet.Mark that optimistic statement may have been true after other post war recessions. However it’s by no means a done deal this time around. For that to happen the Spanish economy and the banking system will have to return to substantial growth of at least 4-5%. Where is that likely to come from? Modest growth will only allow the economy to be slowly repaired and employment rise existentially.
It will also depend very much upon the rest of Europe and the wider world. The signs are for the global economy to stutter along the bottom for many years to come. So long in fact that it’s completely unpredictable.
Generations of people in the west have become used to prosperity and sustained economic growth and rising property values. It’s not a given. History shows that it’s a much more normal state to expect very modest growth and wealth with property being just a place to live and bring up a family.
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@logan wrote:
I took the word ‘normal’ to mean levels of income and property values before the recession began in 2007.
Nope. I meant normal as in back to what people can afford – with the cost of housing back to around 30pc of income.
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I’ve actually noticed that here in Valencia city asking prices of inner-city apartments are only down 25-30%. This is the problem we are having with unrealistic seller expectations. Actual sales prices are at least another 30-35% down, we recently sold a 3 bed flat in a good area for 60,000€ when the same property in 2007 was valued at around 185,000€.
Anyway, my point is that I see prices decreasing a lot more before the market picks up, perhaps even the same again. The sad thing is that so many people have been holding on for so long waiting for the ‘crisis’ to end and this is causing more problems (but understandable from their perspective!). The horrible fact is that until more distressed sellers enter the market and things get worse, things can’t get better again.
I’m very worried about house prices in 2012… Maybe the way to devalue them all at the same time has it’s root in the euro…
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@shakeel wrote:
Chopra: Pay 80% of the asking price !!!!!!!!!!. It can only be for a property that you
have been totally seduced by after a few tinto’s and by the balmy tempreture at night while walking on the promenade.I think you’re replying to a post of mine on a different thread Shakeel 🙂
I’d say that’s my limit for a property that I want to live in and that has already been reduced by at least 30% from peak. If I were just looking to invest in a bargain then of course I’d be going round offering a lot less on many properties, just to see who bites, and then negotiate down from there.
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A property was bought for 199,000 euros in 2003 and is 15 minutes from Marbella by car, 5 mins from Cabopino by car .
2 bedrooms,2 bathrooms garden end apartment, south facing lovely view.At the moment now in negative equity. How much would you expect this to sell for 4-5 years time please bearing in mind we will be reducing the mortgage during that time. We would be selling fully furnished?
I realise 30,000 euros probably went to Estate Agent leaving the proper value at 169.000 euros.
Also if we walked away now what are the chances of being pursued given the state the banks are in.
They would be looking for 130,000 if we decided to do this at the back end of the year.We are quite happy to move out and enjoy our apartment but will be looking to return to the UK after 4-5 years.
Just want your comments and expertise, would we be looking at our apartment being only worth about 50-60,000 euros given much of what you are saying about further drops.
Thank you
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Spanish commercial property on the brink
The Spanish and Italian commercial property markets have all but collapsed with the number of transactions in both countries falling more than 90 per cent in the three months to July as investors worry about the future of the eurozone.
Only three property transactions were registered in Spain during the second quarter, down from 58 deals in the previous quarter. In Italy the slide was even more pronounced, with just two buildings being traded during the period, down from 56, according to data from Real Capital Analytics.
Read full article at the FT: http://www.ft.com/intl/cms/s/0/96705c5a-e2ea-11e1-bf02-00144feab49a.html
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After nearly 3 yrs on the market and reducing our apartment on the Costa Blanca many times (we are 12 miles from the coast in a small spanish town), we have now recently sold for 57% off the price we paid in 2004.
Talk of prices only having fallen 30-40% since the peak in 2007 is not believable in my opinion, if this were true we would have got between 60 and 70,000 euros for our apartment, we got 40,000 !!! Many properties are selling for far less than this and I believe many people who are trying to sell at unrealistic prices know of properties that have sold for much less than those owners wanted but these sellers are sticking their heads in the sand and will not believe what is in front of them. There are thousands of properties sitting on the market at unrealistic prices which is what is stopping the market from stabilising and buyers will not put in offers until they think the market has no further to fall. Until prices are back to affordable levels these properties will continue to sit there !
We consider ourselves fortunate to have got out before the market falls even further which it undoubtedly will. 🙄
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Studio flats, one, two and three bedroom flats/apartments will take one Hell of a hammering as people will soon be able to buy an entire house with the budgets that they have and as they would much rather own a house than an apartment this will make apartments in Spain practically worthless as nobody would want to buy them.
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@JWhite wrote:
After nearly 3 yrs on the market and reducing our apartment on the Costa Blanca many times (we are 12 miles from the coast in a small spanish town), we have now recently sold for 57% off the price we paid in 2004.
Talk of prices only having fallen 30-40% since the peak in 2007 is not believable in my opinion, if this were true we would have got between 60 and 70,000 euros for our apartment, we got 40,000 !!!
If you sold for 57% off the price that you paid for it resulting in a sale price of 40,000 euros then you must have purchased your apartment for 93,023 euros which means that you have effectively lost 53,023 euros (£42,418). Ouch that must hurt man!.
In fact you would have lost even more than that because you probably paid the 10% sales tax on the new build or 8% on the resale of the apartment when you bought it meaning that you lost about 9,302 euros when making the purchase in the first place, which means that combining the sale tax you paid together with the loss you made on the sale means that your total transaction losses amount to 62,325 euros (£49,860).
Err… thinking of ever buying another property in Spain, perhaps when things have settled down abit maybe?
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Idealista Asking prices for Q3 2012 are out. Lots of double digit annual falls….
http://www.idealista.com/comunicacion/files/informe-de-precios/precios-q3-12.pdf -
New figures from the Government suggest there might be as many as 900,000 new homes on the market, if you include cooperative / self-build, up from previous estimate of 680,000
http://www.idealista.com/news/archivo/2012/10/01/0520393-el-gobierno-reconoce-que-el-stock-de-vivienda-nueva-sin-vender-puede-rondar-las-900-000-unidades -
I thought off plan development sales were no longer being offered.
http://losarquerosbeach.com/index.php?lang=en
This one is Taylor Wimpy and seems to be being built now. I am not sure how they are progressing but 3 bed 2 bath beachside in San Pedro town at €205 K what do you think?
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GJ: I have spoken to Taylor Wimpey. I feel the price is higher than I would be willing to pay. The block is released in different phases. This phase is near the San Perdro main road South of N340 but not as near as perhaps the final phases would be. There are no storage units and it is my undestanding that the blocks will be in a “U ” shape facing north i.e. not sea facing. Ground floor will have shops & if a Bar is opened the buyer can kiss a quite life good bye. The buyer will pay VAT at 4% on the deposit and exchange of contract say 30%. The 70% of the price will be at the higher VAT rate and there is no mortgage facility offered by them.
The move by Taylor Wimpley is a clever one for reasons that
a) They must have bought a prime land at a very good price as there is no mortgage on the purchase so a heavy discount would have been extracted..
b) The final phases i.e. closer to the beach will be priced much higher than the current phase that is released
c)They will get a lot of sub contractors tendering at a very competative price.
d) Their Market is mainly UK buyers so they are cushioned from the Spanish buyers.
e) They must also be expecting further € weakness as there is generaly agreement on this in the financial press. -
Shakeel, you should also know they’ve sold 14; YES 14 OFF plan so far; and the license is still not through; they are also building like crazy in los arqueros again; a luxury complex of five blocks facing the ocean. re, san pedro, i didnt notice it facing north; i reckon it would be a perfect place to buy; great location, plans to complete the best gardens in Europe etc…….. get down there and check it out; also the ugly san pedro is now looking pretty groovy; the funky new la sala bar is heaving with punters buying champers like crazy 8) 8) 8) 8) 8) 8) also, great cleaners at 1980’s prices!!!! 😆 😆 😆
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Now a report claiming rich Latin Americans are looking to buy places in Spain.
http://www.propertyinspain.net/news/2012/12/Latin-American-investors-target-spanish-property/
Latin-based real estate investments were directed to Florida because of the high prices in their own local markets due to the economic boom that has seen record numbers of billionaires created and resultant record investment levels. The global recession has not slowed corporate growth and South American economies have shown strong recovery in the last two years.
Miami reports indicate the Latin eyes on Spain include Venezuela’s Cisneros family, the Sarmientos of Colombia, Piñera of Chile, the Salinas, Bailleres groups and Carlos Slim of Mexico, plus big money names like Safra, Salles and Batista of Brazil.
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@UBEDA, I had been advised by the sales staff that 14 of them are reserved. This may or may not be the case. I do take estate agents remarks with a lot of salt even though it is not good for the ticker.
Los Arqueros is the one that is on the old Ronda road. This has been going on for years infact they bought from a Scandinavian Company which went bust in the 90’s. So they have a good record of buying at the bottem of the market hence my points (a)- (e) above.
I feel it is overpriced considering that there will be shops on the ground floor. It would not be 5th Avenue,Sloane/Bond street and there is no storage. The owners have to use one of their bedroom for this purpose & this means it is a very expensive storage room.
In so far as permission etc. As far I am aware it was not an area designated for commerical or other civic amenities and in the present climate they should get the permission if they do not have some outregous plans for it. Knowing Taylor Wimpey I am sure that this will not be the case & it is their goodwill in nthe market place that is helping them.
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By the numbers, there is so much downward pressure on property values. Why is it that they have not tanked?
Spain Bad Loans Ratio Surges to 11.23% as Defaults Climb
Bad loans as a proportion of total lending at Spanish banks climbed to a record 11.23 percent in October as the country’s economic slump led more companies and homeowners to miss credit payments.
The proportion rose from 10.71 percent in September as 7.4 billion euros ($9.8 billion) of loans soured in the month to take the total of doubtful credit in the banking system to 189.6 billion euros, the Bank of Spain said on its website today. The mortgage default rate jumped to 3.49 percent in the third quarter from 3.16 percent in the second quarter, the Bank of Spain said.
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