- This topic has 9 replies, 7 voices, and was last updated 12 years, 9 months ago by
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http://www.tinsa.es/n-pages/np-files/1/down/IMIE/2011/IMIE_11_2011.pdf
General -8.0% (Oct -6.9%)
Costas -8.0% (Oct -6.9%)Peak (Dec 2007) to present:
General -24.5%
Costas -30.4% -
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@katy wrote:
In today’s news. Spanish property sales at an all time low in October.
that can’t be right we have agents telling us how busy they are 😆
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For what its worth, my long held belief is that the Tinsa index, though probably the best of the bunch, lags some 12-24 months behind the actual market.
As an example they give market peak as being Dec 2007. The general consensus is that the market peaked in 2006. Some would argue that the cracks were appearing in 2005.
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@Chopera wrote:
dare I say it but these figures are gradually beginning to look more realistic,
And a 50% depreciation will get the Germans and British buying.
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It seems there are already people buying up what they perceive as bargains, especially in the commercial sector – offices and local shops. None other than Armancio Ortega, who’s invested 100 million in the last few months according to this report (in Spanish). Seems the Zara-founder can’t retire, and has a need to keep investing – the report states he was previously buying up commercial stock in the UK, Italy and the US.
http://vozpopuli.com/empresas/amancio-ortega-ladrillo-bancos
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One of my spanish neighbours invested only in commercial properties. He used his redundancy money to buy over a decade ago and is now quite rich. Even through the last recession he didn’t lose. Businesses came and went bust in his units but there was always another sucker to take out a lease.
Our best investment in Spain, although only bought for pleasure purposes was a berth for our boat. We sold at 5 times the price in around 7 years.
These Tinsa stats may be a guide but I have just spent a few days in marbella and most property hasn’t reduced much at all.
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These Tinsa stats may be a guide but I have just spent a few days in marbella and most property hasn’t reduced much at all.
Indeed Katy, that is all they are. There are huge variations even within the markets given by Tinsa. As you say, falls in the prime areas are small. In the less desirable parts they are greater. In/around Murcia for example, I’d say falls are in excess of 50%.
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The problem is that even with these Tinsa percentage reductions residential property in Spain stills appears relatively expensive.
If investors are to return to this market in any numbers, Spanish property needs to return to ‘fair value’.
By that I mean value in comparison to the same property class elsewhere in Europe, plus expected returns in both capital gain, rental income, costs, taxes, overheads and re-sale ability. In Spain those overheads and difficulties are particularly high risk due to over supply and governments constantly increasing costs.
You have to also differentiate property stock. Spanish property on the Costa’s is largely holiday home stock. It is not the same thing as residential property in other parts of Europe and even Spain.
The only thing holiday homes have in common with residential homes is a roof and four walls. Generally speaking they are usually very poorly built, basic construction materials with little insulation or extras family residential homes require.
To estimate ‘fair value’ you need to compare values of holiday homes elsewhere in Europe with overhead costs and returns built in to the fair value estimate.
If you do that you will realise Spanish holiday homes have still a long way to fall in price. An additional 20-30% in my view depending on the region.
I realise most individuals buying a holiday home do not view property in these terms but they should.
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