Re: Spanish Property Bubble


Hi Everyone,

Here’s a few thoughts. Too many properties have been built in Spain. Of that there is no doubt. But you have to look at where they have been built and what the supply/demand mix is in your area. Parts of the Costa del Sol and Costa Blance are saturated with identical and poorly constructed properties. I think it is very difficult to give a view on the value of these houses/flats as there is basically no market.

In other parts of Spain, where there has been less construction, the market dynamics are more positive although I suspect things are going to be pretty flat for a couple of years as mortgage payments for many nationals are consuming too much of their “take home”. It has to be said that well built properties in a good location will always find a buyer, so long as both parties have a realistic view on price.

The corruption at all stages of the buying process in Spain is frankly horrendous. I feel for those who trusted a lawyer to look after their interests, only to discover that everyone in the purchase chain, from the Town Hall through to the Notary, was acting against them.

However, I have a feeling that once the elections are out of the way and a new team is installed in Marbella the market will begin to perk up. I am not in any way underestimating the problems of illegal builds etc but one thing Operacion Malaya has done is to give a radical “Spring Clean” to the whole property sector in Marbella and the CDS.

I don’t think any of us believe that the corruption has been limited solely to the CDS. It might just be that as Marbella begins to purge its system of all the scum that problems will appear in other areas..Almeria,Valencia etc.

Parts of the CDS have been scarred by overbuilding but it still has a great climate and is easily reached from all of N.Europe. In my view, it will not only survive, but prosper over the medium term.

As for Morocco, Bulgaria, all the other countries ending in “ia” and Turkey, I am not so convinced. At the end of the day demographics underpins and directs economies. A recent UN study on population change for the period 2007/2050 makes interesting reading:


Everywhere else populations are predicted to fall eg: Russia -24.3%,
Ukraine -33%,Romania -25.7%,Bulgaria -35.2%,Poland -20.5%,Germany -10.3% and Italy -7.2%. Not very good news for people buying in Bulgaria. Also, many of the “marketing operations” from the CDS have set up shop in these markets and are up to all the usual tricks.

Certainly, this projected increase in population will be driven by immigration but immigrants are consumers and need a roof over their heads.

Morocco is receiving an awful lot of press but with one or two more bombs I wonder how long things will hold up. The French secret services reportedly do not understand why so much money is being invested in Morocco and I know a Spanish Bank who will not lend a penny there.

Where is all this leading to. Well my crystal ball is no better than yours but over the piece, my hunch is that the most reliable markets in Europe will be the tried and tested ones…the UK,France,Italy,Spain. You might get lucky elsewhere but don’t bet on it, which is what off-plan purchases in Bulgaria, Morocco etc is…gambling.

Well,think I deserve a Cruz Campo after that.

Good luck to everyone and remember that it is always darkest before the dawn.


Casa La Loba