mikec44

We are thinking of buying a Holiday home in Quesada, what really is a concern for us is the current Economy in spain and will this have an effect should we purchase a property to be used as a holiday home.

What I mean is would the maintenance fees jump up, would Vat increase etc.

We really love the idea of a property in spain and especially with the current prices we have seen, but again will they fall further as i assume this could never be considered as an Investment anymore just a holiday home.

Thanks

Mike

agoreira

Never make an investment based on what you read in an internet forum, even the financial "experts" have got it horribly wrong! However, my 5p's worth, property prices are predicted to drop more yet, maintenance fees certainly won't be coming down, the EU is asking for VAT increases so if Spain want the money, increase they surely will. If it's not important to you that your property may drop in price or that fees, VAT etc may go up, go for it. There's plenty of choice, the buyer has the whip hand, plenty desperate to sell and get out.

steviedeluxe

It's a totally different economy at a different stage of the circle, but it's interesting to read about the US housing market - Warren Buffett is now investing in real estate. Of course they had their house pricing crash a few years back, so they are ahead in the cycle, but it will eventually come to Europe.

http://www.investmentu.com/2012/June...-recovery.html

If it's just a holiday home I'd be concerned about viability of local flights, and also about crime levels (possible squatting?) in the area. If Alicante is the local airport you probably won't need to worry about transport links (and the AVE line there opens next year). Incidentally Alicante airport has just had a record breaking month for passenger numbers.

http://www.euroweeklynews.com/servic...icante-airport

Beaverstate

The US housing market does seem to have bottomed out. In the last report most metro areas saw a very small increase with less time on the market. However a huge number of foreclosures still need to be dealt with.

cricketman

The economy is very bad and set to get even worse for the next 5 years

IVA is going up in September to 21%. Copay systems are now being put in place in many provinces for health and education (school kids have to pay 3 euros a day to eat their own food in Catalunya!). Foreigners having to prove that they can afford to live without help from the state

But on the positive side, I see things getting cheaper. All the sales have 50% off at the moment, house prices and rents plummeting etc. So up to you

mikec44

thanks for some interesting advice...

amideislas

Whether the economy is in deep sheit is not a debate.

Whether it improves is a topic of debate. But at the moment, I don't see any signs of if getting better.

Things are NOT getting cheaper, most of the daily household stuff is getting more expensive. As much as 20% increase in appliances and tools in the past year, a €1 loaf of bread last year is now as much as €2, and much of the other foodstuffs have increased significantly in the past 24 mos. I reckon it has a lot to do with increased operating costs across the board.

Yes there are plenty of "50% sales". but that's only after hiking prices to nearly double.

Add to that increased property taxes, VAT and petrol prices, and the prospects aren't looking too rosy.

If you're already here, it's probably wisest to sit tight and see how it all pans out, and keep as much of your assets in Sterling or Dollars if possible.

If you're not already parked here, I'd seriously think twice before making any major investments.

EllisG

I've notice a lot of property advice and opinion from time to time on this site and one thing is always ignored and that is the value of the word home.

The fact that there are various different methods to value property used to be vital to how we would make money mostly from buying buildings from blinkered pension funds who would break the idea of property investment down into pure numbers...a lot of time ignoring development potential whilst their heads were buried in present and future value tables and sinking funds.

There is always money to be made even in a falling market the key is strategy but that is not kind of relevant to this fella's post.

Your use of the word home implies a long term investment think of the opportunity cost of waiting until the market bottoms out. The value of the time spent turning the house into a home (especially while local traders are desperate for business and willing to work for less) the time spent relaxing in your holiday home a convenient 2 1/2 hour flight from home.

Do your homework, find yourself something nice...feel how desperate the current owner is and take advantage of the current climate you only make a loss on property when you sell it....if you can afford it go for it and appreciate the hidden value of using your home for the next 20 years before you discover in monetary terms the likelihood is your original investment has increased in value...in that time financial markets can always fall apart, world war 3 can break out, armageddon and the four horses of the apocalypse...prepare and protect yourself from within fortressmikec44 on the costa...they can't take that away from you (how valuable is that!)

Good luck with your quest

mikec44

wow great post and actually makes a lot of sense, I was only planning a Holiday home for Max £50,000, so worst case in a few years i have to or want to sell it I could lose £20,000 worst case.

I would plan to use for the next 10 years at least and even if I got fed up I would rent out long term.

Thanks

Mike

britishbull

Two areas of concern are the local rates (already going up) and the tax on unrented properties of non-residents (which could also go up). Also squatting seems a problem if you are not there all the time. Also if you were to become resident in the future the government will want a large share of your worldwide income.

If it was not for visa concerns (re residency), I would much prefer somewhere in the USA, still at rock bottom prices and with a much more dynamic economy than Spain which is going the tired and failed route of a massive tax grab.

HBG

I know Quesada and it's quite a pleasant place to live. It is blighted by unfinished urbanisations all around it, where the developers have gone bust and scarpered, leaving behind ghost towns.

With Spanish people being repossessed in their thousands in the nearby towns and cities, they quite naturally squat in those empty houses, and the Spanish authorities are sympathetic to their plight. They will net eject a Spanish couple with children from a foreign owned holiday home.

jackytoo

I partially agree with EllisG. If you are in it long term it doesn't matter. however, what if you find the property is not for you...you could have neighbours from hell, it could have lots of problems you were not aware of. In the old days it was possible to sell and move on but now you could be stuck with it for a decade. Also it seems prices are still going down, you may be ables to save eg. £30,000 by waiting a year. You could do a few long expensive holidays this year and still have some change. There is no bottom yet.

Lynn R

They did in the case of a house about 5 minutes' walk from mine - a family broke into a house owned by a Scandinavian couple (I don't know them). Someone must have let them know because they flew over and started legal proceedings, and the Spanish family were evicted within three weeks, with the police in attendance.

There are a couple of other cases I know of where squatters have remained in houses for a much longer period, but they have been cases where the houses were repossessed by banks. People seem to think they are fair game and no-one will even complain to the police about it. They probably think the same way about unsold properties standing empty, and if I'm honest I can't really say I can blame them.

agoreira

That's basically what I was saying, "If it's not important to you that your property may drop in price or that fees, VAT etc may go up, go for it."
Out of curiosity I put Quesada in a property internet site, it came up with over 800 properties for sale. Now they can't all still be available, but even if you half that figure to around 400, that's a hell a lot of properties for sale. If it doesn't work out, selling or renting is far from guaranteed. Like you, I'd be sitting back for a year or so to see how things pan out, it's set to get a lot uglier I think. Spain has an enormous financial, black hole to fill, Valencia is broke, they'll be looking for money from somewhere.

mikec44

Thanks, really food for thourght, we may rent for a year and see if we still like it and see what happens within 12 month.

Good advice

Mike