Re: Re: cajas again



Wouldn’t it be true that you will never ever know, in property whether 200 today will be worth 150 tomorrow?

True indeed. What you can however do is look at the fundamentals and make an informed call. That is what I did two years ago, it is what I am still doing.

Surely if I buy today, I get all the use and pleasure, surely the odds now are that I am a lot more secure than had I done so 2-4 years ago, that there are good odds that in 4-6 years time my decision may also prove to have been a good investment also, bearing in my mind my use and pleasure also.

The use and the pleasure yes but this also comes with the running costs and associated headaches. As for your other ‘surely’ I would say the balance is actually against. We certainly aren’t any more secure than 2-4 years ago. Indeed it now looks as if a double dip is on the cards in Europe. The odds that any investment now turns out to have been a good one in 4-6 years are slim at best. If the Euro as we know it ceases to exist, something which many commentators now see as inevitable, we’ll see an almost overnight devaluation of 30-50%.

How bad is it going to be, or how much worse can it get?

Nobody knows. My guess is that on the Costsa we’ll see another two years of falls and 25% off prices before things stabilise. After that there will be at least another few years of stagnation. In real terms properties there will be worth some 50-60% of their current ‘value’ in five years time.

If I want this now is as good as time as any?

No, it fundamentally isn’t a good time to buy now. It won’t be at least until the concerns over European debt levels and bank finances have been addressed. It won’t be until the future of the euro is resolved. It won’t be until the current glut of unsold properties in Spain is cleared.

Those who wish to buy for lifestyle purposes should only do so in the full knowledge that anything they purchase now is likely to lose a good chunk of its value over the next half decade. If they still decide to go ahead with a purchase then good for them. I wouldn’t want to stop anyone doing what they wish.