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Just to illustrate my point on the “Is anyone buying” thread about the PR guff that eminates from those with a vested interest in selling property I took a look at the Kyero property news archive (Sorry Mark but it was easier to navigate than the one here) arbitrarily chosing April and October for the last three years. I must stress that I chose these months at random. I haven´t looked at all of them but I´m pretty sure you´ll find similar articles published every month in the past three years.
This is what I´ve found from a very quick look…..
April 2009 – http://news.kyero.com/2009/4/14/signs-of-recovery-in-the-spanish-property-market – “It appears to be the beginning of the end of the worst period for property sales since the crisis began,”
October 2008 – http://news.kyero.com/2008/10/28/no-credit-crunch-in-marbella – “Marbella is still desirable and despite economic issues, bricks and mortar is still a good investment.”
April 2008 – http://news.kyero.com/2008/4/22/spanish-house-prices-rising – “Developers say that house prices will not fall further”.
October 2007 – http://news.kyero.com/2007/10/30/no-more-credit-crunch – “Without wanting to trivialise the situation, I just can’t see the worst fears of the doom-mongerers being realised”.
April 2007 – http://news.kyero.com/2007/4/11/live-the-dream-in-barcelona-europe-s-most-vibrant-city – “Agents insist that there is still plenty of growth to come – most predict 5-7 per cent price rises in each of the next two years”.
Octber 2006 – http://news.kyero.com/2006/10/10/young-investors-look-at-spain – “With financial rewards on capital growth reaching as much as 12% in parts of Spain, the property market here continues to outperform equities and bonds”.
April 2006 – http://news.kyero.com/2006/4/18/good-news-for-spanish-property-investment – “With experts expecting the area (Murcia)to boom in the coming years, investors are already snapping up properties”.All this in a market that has been falling for the last three years.
Plus ca change!
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April 2009 – http://news.kyero.com/2009/4/14/signs-of-recovery-in-the-spanish-property-market – “It appears to be the beginning of the end of the worst period for property sales since the crisis began,”article by Mark Stucklin 😆
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I am not sure what else you would expect from those involved in the property trade….I mean they are not going to come out and say…’My world has just come to an end’ , or ‘We’re all up to our necks in deep s**t’
I think there is still a long way to go before any sense of renewed confidence, and demand will return. However I’m not involved in the property business…..so what do I know..?
JMHO
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@Fuengi wrote:
😆
April 2009 – http://news.kyero.com/2009/4/14/signs-of-recovery-in-the-spanish-property-market – “It appears to be the beginning of the end of the worst period for property sales since the crisis began,”article by Mark Stucklin 😆
To be fair Mark is simply quoting – and states that he is – an article in El Mundo.
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@brianc_li wrote:
Just to illustrate my point on the “Is anyone buying” thread about the PR guff that eminates from those with a vested interest in selling property I took a look at the Kyero property news archive (Sorry Mark but it was easier to navigate than the one here) arbitrarily chosing April and October for the last three years. I must stress that I chose these months at random. I haven´t looked at all of them but I´m pretty sure you´ll find similar articles published every month in the past three years.
This is what I´ve found from a very quick look…..
April 2009 – http://news.kyero.com/2009/4/14/signs-of-recovery-in-the-spanish-property-market – “It appears to be the beginning of the end of the worst period for property sales since the crisis began,”
October 2008 – http://news.kyero.com/2008/10/28/no-credit-crunch-in-marbella – “Marbella is still desirable and despite economic issues, bricks and mortar is still a good investment.”
April 2008 – http://news.kyero.com/2008/4/22/spanish-house-prices-rising – “Developers say that house prices will not fall further”.
October 2007 – http://news.kyero.com/2007/10/30/no-more-credit-crunch – “Without wanting to trivialise the situation, I just can’t see the worst fears of the doom-mongerers being realised”.
April 2007 – http://news.kyero.com/2007/4/11/live-the-dream-in-barcelona-europe-s-most-vibrant-city – “Agents insist that there is still plenty of growth to come – most predict 5-7 per cent price rises in each of the next two years”.
Octber 2006 – http://news.kyero.com/2006/10/10/young-investors-look-at-spain – “With financial rewards on capital growth reaching as much as 12% in parts of Spain, the property market here continues to outperform equities and bonds”.
April 2006 – http://news.kyero.com/2006/4/18/good-news-for-spanish-property-investment – “With experts expecting the area (Murcia)to boom in the coming years, investors are already snapping up properties”.All this in a market that has been falling for the last three years.
Plus ca change!
Kyero lost about 25% of advertised properties in the last year. If they start writing
“Do not buy now because next year will be cheaper” they would lose another half… -
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There are some eye popping bargains around at the moment and very many of them are on high spec developments.
If you are a serious investor and have serious cash, from the right source,there are fantastic opportunities in this market at the moment.
I was quite cynical of this market and every agent spouting on about repossessions and distressed when the reality was the vendors had just dropped the price a little, the reality is if you dig very deep in the right places and know the right people you will do very well. -
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@flosmichael wrote:
@DS wrote:
the reality is if you dig very deep in the right places and know the right people you will do very well.
Where can one find the right digging device?
You will certainly be aware flosmichael that there are many websites with high profiles at the top of all the search engines who are looking to attract buyers. In fact, many pay google adwords to get to the top and be recognised.
They are looking to sell something, usually property.
Then there are websites that avoid the search engine listings, they are not looking to be high profile, they are search engine annoymous. They are for members only, and they charge several thousand pounds for membership.
Almost all of the high profile websites charge nothing, they are happy for people to access their properties, mostly because they are nothing special.
The expensive to join websites, at leat 2-3 dozen of them are excellent, I am a member of 2, and find them vital to present my property. The buying members are not fools, they ask for bottom prices and that’s fine because they are business people and not individual buyers of family or holiday homes.
My favourite and most productive membership is of a website with 17,000 regular buyers, they spend often and become good contacts. I pay a large platinum fee but I recouped it in my first sale 3 years ago so in reality it isn’t expensive.
The buyers also save a fortune when they buy, and go on to do so several times a year on average.
I won’t give the name of this site but you will find it in a search of the Sunday Telegraph site under “BMV overseas”.
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Sorry Katy but I disagree there. There are investors looking for the longer term, some brits, mainly spanish and all legal money.
The Russians however in the main are the ones with large bags of the paper stuff!
Banks are starting to offload under mortgage value now – this year will be the most interesting to date.
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@Peter Good wrote:
@flosmichael wrote:
@DS wrote:
the reality is if you dig very deep in the right places and know the right people you will do very well.
Where can one find the right digging device?
You will certainly be aware flosmichael that there are many websites with high profiles at the top of all the search engines who are looking to attract buyers. In fact, many pay google adwords to get to the top and be recognised.
They are looking to sell something, usually property.
Then there are websites that avoid the search engine listings, they are not looking to be high profile, they are search engine annoymous. They are for members only, and they charge several thousand pounds for membership.
Almost all of the high profile websites charge nothing, they are happy for people to access their properties, mostly because they are nothing special.
The expensive to join websites, at leat 2-3 dozen of them are excellent, I am a member of 2, and find them vital to present my property. The buying members are not fools, they ask for bottom prices and that’s fine because they are business people and not individual buyers of family or holiday homes.
My favourite and most productive membership is of a website with 17,000 regular buyers, they spend often and become good contacts. I pay a large platinum fee but I recouped it in my first sale 3 years ago so in reality it isn’t expensive.
The buyers also save a fortune when they buy, and go on to do so several times a year on average.
I won’t give the name of this site but you will find it in a search of the Sunday Telegraph site under “BMV overseas”.
Hi Peter,
thank you for the hint.
I have a question: what is the definition of BMV in the current situation?
Let me give you one example: some apartments in Costa Tropical were sold quite fast off-plan (one of my friends has one so I know the situation) for 90K Euros in 2006, which were about £60K at that monent.
Then people were asking 110K Euros in 2007 which was the highest asking price.
Now the asking price is 75K Euros which is about £68K. Nothing sells.
What is the market value for these apartments? 110k Euros? 90K Euros?
75K Euros? £60K (i.e. 68K Euros)? Less than that? -
I think I support this version. Too soon for investors.
Posted by BrianPosted: Tue Apr 28, 2009 10:56 am Post subject:
Katy,I can see that you are trying to stay optimistic but property, particularly in Spain, is at present a very poor investment. If you look at all the fundamentals, in particular the affordability indexes, it looks like a one way street at present and that is heading downwards. Next to that 1-2% return from a bank looks positively attractive.
As I have posted elsewhere I am looking to buy at present but it will be a lifestyle purchase rather than an investment. As long as the basics are so clearly showing that the market is heavily overvalued I simply don´t believe the guff that you see every few weeks `Signs of optimism´, ´Market has turned´, etc etc. IMO that is PR put out by those with a vested interest in selling Spanish property. When Tinsa indicate the market is close to bottoming I´ll take notice. Not before then.
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I make more than 1% or 2% pa on holiday rental of my apartment – and i spend about 3 or 4 months a year out there myself.
I agree it’s not a business investment, but if prices fell another 20% to 30% they’d look attractive.
The problem with Spain is that property will never really be a business investment for non residents unless the government allow mortgage interest and running costs to be deducted from gross revenue, before applying tax.
If this policy continues prices would have to fall by another 50% or more before BTL becomes economically attractive (if you’re honest about paying spanish tax) for non residents.
If the government allowed this small change the property market would stabilise much quicker.
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@ashtondav wrote:
If this policy continues prices would have to fall by another 50% or more before BTL becomes economically attractive (if you’re honest about paying spanish tax) for non residents.
If the government allowed this small change the property market would stabilise much quicker.
I am not saying that the policy is good, but what’s wrong with prices falling another 50%? What would government intervene to stabilise the market? It did not intervene on the way up…
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@Inez wrote:
Hi Shakeel, sorry if my post was too ambiguous.
There are some units for sale at a less price than the mortgage on it.
Who is paying the difference?
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Down CDS way,
This just popped up on e-mail.
If this is one of the legal flats on Reserva de Marbella, this is a bargain, both by potential rental yield and capital appreciation.
I don’t think this will hang about at this price!
Steve
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@flosmichael wrote:
@Inez wrote:
Hi Shakeel, sorry if my post was too ambiguous.
There are some units for sale at a less price than the mortgage on it.
Who is paying the difference?
Well
Not rocket science
The mortgagee if they have assets,and successfully pursued or the bank/lendor if they are not ( repo)
SV
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@Inez wrote:
Only if its a legal one and from the pic I dont think it is, it seems to be one of the long blocks on the hill. If illegal (although will be regularized) then its not cheap as I know of one at 140k penthouse and one coming on for 120k, but cant get mortgage!!!
Hi Inez
This is your area I know, however this flat.legal or not is advertised with an agent for 150k, if you went up there, found it, got the phone no from the se vende board and done a deal at 120k, this has to be a bargain.
A two bed two bath with a Marbela post code, East marbella, nice urbo at nearing 100k e, This is a bargain.
Sv
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I agree with you. Doubt you would see a board though and the vendor may not live there, but in theory yes.
The only issue is you would have to pay cash as no bank is lending there. You may be able to subrogate, thats the only way, unless you have teh readies and for the purchase costs too.
Other issue is the community fees are high!!! ( which can make it a false economy) and another reason why they are hard to shift.
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Bargain pricing is indeed relative. I looked at a nice rustico place today, that was at least 300K below prices a year or two ago, and something less than half price.
But, financing these places is very difficult at the moment, so this bargain price will probably fall further, as very few will have the cash available to buy. This anticipated further fall of course means that the bargain price today, is unlikely to look so good in 4 months time. And who nows how far down this spiral will go.
It’s all a bit silly, but I guess that’s the way the market works. Very tough on the sellers!
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@El anciano wrote:
Bargain pricing is indeed relative. I looked at a nice rustico place today, that was at least 300K below prices a year or two ago, and something less than half price.
It’s all a bit silly, but I guess that’s the way the market works. Very tough on the sellers!What about years 2000-2002 when prices doubled? That was very silly too… 😀
People should learn that was goes up must come down. In the case of property prices this truth can be avoided only by having rampant inflation,
with huge salary rises. As most people have salary cuts in 2009, the fall of property prices is a sure thing everywhere in the world. -
Absolutely correct and something is only worth what someone else is prepared to pay for it.
There is and never has been a true price benchmark as prices are based on bank valuations, which are worked out at x euro pqsm as opposed to comparative sales prices.
Sales prices are not true as firstly the black money syndrome, still in evidence!!! And also as many of the completions this year and possibly next will be from the overhang of offplan purchasers, not new purchasers.
The true picture will not come out for another 2-3 years.
However, if asking prices in a complex average say 200k, assuming you will get it for 160ish, then the bargain would be about 100-120k. Assuming not negative views, dark or on the ground floor of course!!!
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@Inez wrote:
However, if asking prices in a complex average say 200k, assuming you will get it for 160ish, then the bargain would be about 100-120k. Assuming not negative views, dark or on the ground floor of course!!!
I perfectly agree with this.
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@Stevev6 wrote:
@flosmichael wrote:
@Inez wrote:
Hi Shakeel, sorry if my post was too ambiguous.
There are some units for sale at a less price than the mortgage on it.
Who is paying the difference?
Well
Not rocket science
The mortgagee if they have assets,and successfully pursued or the bank/lendor if they are not ( repo)
SV
Your answer is very different from Inez’s answer (and she seems to know more about this…).
She says “bank is taking a hit”. If this is true, should I understand that the jingle mail (key in the mail) has become accepted in Spain? If true, I do not see any reason why prices won’t go to the level of the ones in USA.
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Just to defend Steve6, in the cases of actual repossession by the courts (a repo is owned effectively by the court asn THEY take the property back in order to settle the debt) the banks want to get everything they can, so their extortionate penalty interest rates (look on your mortgage escrituras to see how much this is and hovers at just under 30%) and any other costs they can ask for get added to the original loan and it is this figure the court tries to obtain at the court auction. If they dont, any difference is indeed owed by the debtor and this can be chased for in the debtors home country.
The bank, however, has a lot of time before finally deciding to repossess (if they want to) and 3 options remain to them
1. Find a buyer themselves (this is the distressed part of the sale) The price tends to be all the mortgage, plus interest plus costs and is why the property tends to be higher than a private distressed sale where the owner tries to get shot of it before the outstanding gets too high, and in many cases ends up paying from their own pocket to get the deal through.
2. Accept the keys from the owner, they do this is there is plenty of equity in the property. They then actually own the property and try to sell it independently. No further costs are added as it is their choice to do so and the debtor rids totally of his debt. This is/has been happening a lot. Banks hang on to this stock, they may not be in such a bad financial way and see this as a mid term solution as they can drip sell the properties off over time and also actually do rent them out.
3. In the odd case of a bank in trouble where they have over extended themselves, the BOS will order them to deal with it. In this case they try to sell whatever it is at under the mortgage value outstanding, some cases this is good, most if the time its still higher that what the market will pay as they are chasing a falling market. Some banks may do this voluntarily to balance the books, but its seeming to be more developer bankrupt stock that this is happening to.
There will be more and more of these in time which will effectively drive prices down, but wont necessarily guarantee a sale.
Some buyers want the bargain but not where these lots are, some will buy these lots and sit on them.
Some financial guys are saying they reckon property will see a mini boom (not massive) as people look for where to place their money, frightened in case banks go under as they only get a certain amount back. At least with property you have something tangible and worth something!!
Lets see!
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@Inez wrote:
Sorry Katy but I disagree there. There are investors looking for the longer term, some brits, mainly spanish and all legal money.
The Russians however in the main are the ones with large bags of the paper stuff!
Are these the same Russians who have seen they currency devalued by 40-50%% and their income slashed in half?
The effect is the same on Russians as it is to British buyers – stop buying and sell at a discount as its a profit in Rouble terms.
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@Inez wrote:
Sorry Katy but I disagree there. There are investors looking for the longer term, some brits, mainly spanish and all legal money.
The Russians however in the main are the ones with large bags of the paper stuff!
Banks are starting to offload under mortgage value now – this year will be the most interesting to date.
The chart in Mark’s report seems to put down any hope of Russians (or any other nation) are going to buy the surplus.
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All the surplus unsold yes totally, but any sale is dependent on price.
The chart shows how many brits completed in 08, but NOT how many were new builds which in reality were sold 2 or 3 or even 4 years ago, therefore the chart doesnt show a true figure of actual buyers for the year. Even 09/10 will have a distortion due to this fact.
There are some brit buyers but all after a specific brief at a knockdown price.
The buyers I am referring to are the spanish, but dont forget Im a small agency so for me I am as busy as I want to be – I have a sunbed to hog after all!!
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@Inez wrote:
There are some brit buyers but all after a specific brief at a knockdown price.
No wonder about it.
The prices in UK fell by 1.7% in the last month and 17.7% in the last year.
People have difficulties to save their skins at home, let alone adventure in unknown territories…I expect (almost) all british buyers to chase only potential bargains.
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The only ones trying to talk the markets up whether in Spain, UK France and elsewhere, are the rather desperate estate agents and developers.
The more honest of them will tell the truth and direct potential buyers to those properties which are genuinely discounted because of distress sales or oversupply.
Buyers in Spain and the UK are definitely looking for bargains and since the Halifax have said prices fell in the UK by another 1.7% in April and economists with no vested interest are saying prices could fall another 20% over the next 2 years, now, doesn’t look the best time to buy! 😉
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