Joe King

In November last year I almost bought a brand new two bed apartment on the Oliva Nova golf course for €143,000 as an investment.

Rental opportunities seemed very good and I was told that even if prices fell elsewhere because it was on a golf course it would hold its value.

Anyway, I didn't buy in the end - got cold feet - but got a call today from the estate agent who showed me around originally.

Guess what? Prices have come down! The remaining unsold apartments have been reduced. The price now is €121,000.

So if you've been thinking of coming out but thought prices were too high, maybe think again. Find your dream home then haggle haggle haggle!

keddyboy

Buy if you can only afford it. Too many people have been buying down here in the Costa del Sol area expecting, indeed being told in no uncertain terms that rental would more than cover the mortgage, not true!! If you can buy it cash and not be bothered about renting or as us you live in it then no problem. The rental market has fallen 10 times faster than the prices of houses. Dont leave your brains on the plane and if you come over on an all inclusive inspection tour, be warned. There are certain companies [well known and established] that are a big no no!!!! Cannot print them but one was subject of a tonight programme the other week.
Happy Hunting

onlineamiga

awww come on name and shame. If companies giving out duff advice dont get named and shamed then they will get away with it. Free speech and all that!

And no i wouldnt buy to rent on the CDS either.

mikelincs

We have had notices sent to all on our urbanisation offering 2,000 Euros to anyone helping them sell their property. Only the introducer of the buyer will get any money. HOWEVER the house as offered is at least 20,000 Euros over priced, especially for sellers wanting a private sale. They want 196,000, and the last one that I know that did sell here, and was a similar house sold in a private sale for 170,000. People can sell their property, but they have to be realistic about how much they are going to get for it. The vast majority of properties on sale locally are overpriced.

Ex-pat

Could be good news for us.
We finally have a date to travel over.we are leaving u.k next friday 3rd oct .we are driving to Calpe to stay in s i l villa ,we intend to use it as a base whilst looking for an area to buy a property in.we probably wont buy for at least 6 months as we want to rent in differant areas to see if we like to live there.we are starting around the Delores area.we have to return to u.k in about 5 weeks to sort various things out before comunig back for good.As we spend time in Mexico every year we are used to hagling over prices ,so we look forward to that(sellers beware)

Joe King

Yes overpriced properties is common around here too - hence a lot are on the market for months upon months.

The problem is when you buy a house in Spain for say €100,000, you have to add 8-10% on for costs. So it has really cost you nearer €110,000.

When you want to sell you need at least €110,000 to break even! So prices have to go up just for people to break even. But when you hear prices have gone up by 8-10%, you add that too to the asking price!

And so it goes on. To the point now where people just can't afford to pay the prices now being asked.

Developers are struggling for cash flow at the moment so they will cut prices at a stroke to keep things going and I think that has happened here. I'm going to talk to the estate agent tomorrow to find out more.

Resale properties have to be priced very realistically these days or they won't sell - unless they have something very special to offer. There are just far too many properties on the market.

So if you are coming out haggle! If they say no, walk away. You'll find something else.

Joe King

Came across this in the FT today:

http://www.ft.com/cms/s/0/f29aeeb8-6...nclick_check=1

Spain is mentioned as a country that could see property price falls because of the current credit crunch. In simple terms, if people can no longer borrow as much, they won't be able to pay as much.

Llanera, the developer mentioned as being close to bankruptcy, actually has a number of projects on the go here in Denia where oversupply is a problem already.

Lionda

Thanks for the link Joe, I've also read the article 'homeowners face payment shock' looks like a few more may be selling up (if possible) and coming out here It all looks pretty bleak over there in blighty!

leighbloke

Why would that be the case?
If someone is struggling to make ends meet in the UK and defaulting on their mortgage payments - why would they move to Spain? - Almost Zero chance of being able to get a job paying enough to service a loan, therefore less chance of being able to fund a house purchase, therefore the feeling of "being left behind" increases.
Not yet considered the difficulties in moving away from the family support network, speaking the tongue, leaving behind friends & relatives. I think you're talking pants.
The massive majority of houses built in Spain in the last 15 years have been bought as second homes, if people in the countries traditionally "providing" these second home owners can no longer afford a first home - I reckon the chances of them affording a second home is a little compromised.
I really don't see any alternative - any area in Spain with a significant proportion of high density, mostly holiday type apartments, will become a sea of " Se Vende", over the next couple of years this will have to mean a fall in prices.
In the meantime the UK is still overpopulated and underhoused - its called supply and demand - prices can only continue to go up - maybe not as fast as the Spanish prices will go down though.

Lionda

Who's talking pants - me or Joe

Red Devil

I am getting worried reading this thread. We have second home and come over quite a few times a year. Now we are looking at a property for my daughter and boyfriend who want to move over and run a small business, already at the property. She cannot afford anything in the UK and although she will have to borrow alot to do it and work hard, this seems the only way to get on the property ladder and hopefully have a good life thrown in.

Is she doing the right thing

Lionda

Don't be put off by what you read on here - eveyones situation is different. Use the information as a guide only The FREE BEER thread has lots of info

Joe King

I agree with leighbloke. Problems with the UK housing market / economy won't lead to more people coming to Spain. If they struggle back home what chance here? The official statistics for last year show less people are coming to Spain to buy property anyway because of high prices.

Where I disagree with leighbloke is the direction of house prices back home in the UK. I think they will come down, but not by as much as in certain parts of Spain. Only time will tell though.

The "overpopulated underhoused" argument was used in Japan to explain their booming housing market of the late eighties / early nineties. It made sense in theory. The problem is however it misses affordability out of the equation. Prices can only go so high - beyond that nobody can afford them. Japanese prices fell for 14 years in a row when the bubble burst.

The credit crunch of recent weeks is the start of a turn in the credit cycle. It is already harder to borrow money in the UK than it was a few months ago. Prices will have to adjust to this reality - and it means downwards.

Spain will be affected by the credit crunch in much the same way, but has the added problem of massive oversupply of properties and the risk that the credit crunch elsewhere will further the decline in overseas investment. Leighbloke is spot on about the sea of se vende signs - in fact yesterday while at Oliva market I saw more than I'd ever seen in the town.

Joe King

A couple of things.

Firstly, Don't worry!

If you think house prices in Spain will fall in the foreseeable future - and remember even the Bank Of Spain says they are 25%-35% overpriced depending on the area - then now isn't the time to get on the property ladder anyway. Especially if you have to borrow a great deal to do so.

Has she considered renting? Maybe even renting your holiday home - giving you an income too?

Red Devil

Thanks for reply Joe. The property she wants already has a business up and running, so there is a small income there already. She would just need to increase the income.

Have now discovered FREE BEER thread. Didn't read it properly at first. Saw beer and ignored it !! Lots of questions answered.