Spanish Property Insight › Forums › Spanish Property Forums › Spanish Real Estate Chatter › Spanish property market 2008: soft landing or train wreck? › Reply To: Spanish property market 2008: soft landing or train wreck?
A thoroughly interesting debate and thread. On the whole I totally agree with you Bernard.
I have been involved in psoprty for 24 years now my first position was working for a developer whp went to all the large uk auctions (before everyman became aware of them) This was in the UK. I have been coming to Spain since then as well – my parents have owned here for 30 years, so I have an interest all around.
I never wanted to beinvolved in the heady sales of the off plans as it was all hype and lies, so went into property management and rentals, which was good until around 5 years ago for various reasons.
In autumn 2003, after driving back along the coast from Banus to Fuengirola where Ilived, I became even more aware of all the properties in process of building and having worked for a very short time in one large agency, I was aware that around 70% of the buyers were investor/speculators and most would want to flip on.
It didnt take a genious to see there would be a lack of secondary buyers around and that there would be a surplus, alongside the 4 following years when builders would be breaking ground after selling off plan! So, already seeing a reduction in rental rates due to not only over supply of stock but a lack of clients as many had bought their own properties, I thought there would be a niche in the market for the seller who having over committed, would need to get rid of very fast. Hence starting the auctions in early 04.
We cut our fee and ensured total transparency, but it was interesting how we were thought of as idiots as the ‘market’ was still rising, and indeed there were still thousands jumping on the bandwagon and buying more units.
The first auction saw 1 sale – we had properties cheaper than anyone else but mainly as our fees were lower and owners refused to bring them down! Over time we have built a reputation and now I get owners listening to me. For a while it was hard to get them to drop their price and from 04 it has been a slow gently roll downhill – I did in truth expevt it to follow the uk late 80s early 90s scenario and drop like a stone. But there are totally differing factors and I seemingly misjudged this. However, now with 4 years behind me, people listen.
We are now getting owners who after being told what we would accept for a reserve and who refused, are now coming back deserate to get into auction. Unfortunately they are now being told last years price is too high and they have to drop more.
I confidently tell them this as I know that while they woll go to other agents or privatley try to sell and some will, 80% wont and they come back desperate to get rid.
Its a shame as then they will have had another 6-9 months of mortgage and community payments – if they had sold at the price I told them before, they would end up with more in their pocket
And I am getting inundated with sellers, without advertising for them or anything.
So I do predict train crash, nearer the end of the year and it is definately heading speedily that way from the people I speak with now.
And I know Portugal has been through the mill, its a beautiful place and last time I went I was amazed at the prices and the happy people!