metalmike

Isn't it sad to see the problems created by the construction collapse and read about the lack of confidence in the Spanish property market. For those of us who love the country we have chosen to live in. we can only wonder when and if things will ever level out and confidence will return. Property investors have firmly turned their backs on Spain, despite the claims of 'below construction cost' and 'repossession resales' and it isn't hard to understand why. Besides the well documented risks of buying certain category properties, where innocent buyers/investors risk anything from steep fines to demolition, the market is an absolute mess. The National Institute of Statistics (INE), continue to publish unbelievable, dubious and misleading figures concerning property prices. This month they are claiming house prices have increased, and the figures also show that, since their peak in 2007, prices have fallen less than 10%. Whilst it is almost impossible to establish a true figure, it is generally held that a more realistic figure would be 25%. Estate Agents seem to 'book' properties at any price that the seller demands even if there is not a snowball in hells chance of selling it - why? There is untold sums of money being spent in EU countries on property projects and investments and sadly precious little finding it's way into Spain. One investment manager in UK said 'It doesn't matter what levels of investment or returns are available in Spain, we can't risk our clients money'...........Nuff said.

Rotor

The only way foreign buyers/investors will have full confidence is if the Spanish government offer a amnesty on illegal builds or a guarantee scheme for the legalisation of property, its a great opportunity for the authorities to make some extra cash !

cricketman

Which is indeed what they have been doing in some regions...

In return the owners have to pay an urbanisation fee to make their properties legal that can run into tens of thousands of euros.

But I guess people can't have it every which way.

I'll buy in Spain once average house prices reach four to five times average salary. Until then they are way overpriced and a poor investment. Better to rent and invest the savings into something else.

Dick Dasterdly

I get the impression that a lot of would be sellers are able to sit out the recession until such time as their asking price or something close to it has been met.
However that is not to say that there haven't been a few fire sale bargains around from a small number of desperate sellers,for those buyers willing to shop around and possibly take a gamble.
However in general the market seems fairly stagnant and likely to stay that way for a while.

HBG

The Tinsa figures are supposed to be more reliable, and show a fall of 20% over the past three years. But they have been massaged as well and the true figure is much higher.

There are many reasons for silly figures being published, but over a million unsold houses, a collapsed construction industry, a gigantic problem with ‘illegal’ houses account for some of the mess.

A fall of values of between 30 and 40% so far seems realistic, and there is more to come.

I’m not gloating, I’m not naturally pessimistic, but I am suffering too. I was going to sell up this year, to downsize to a property locally, but I’ve given up. God knows how long I’ll have to wait until sanity returns to the market, if ever.

(I bought this one 11 years ago).

Casa Santo Estevo

No confidence!

cricketman

Yes I read that article earlier today

The funny thing is, the only stat that is worse than the UK or US, is the unemployment rate.

The % debt of GDP, deficit, and official house price drops are all worse in the UK and US. And the US has a higher rate of bad loans and repossessions.

Spain is in a bad way yet sometimes I feel that those in glass houses are throwing stones

Rotor

Where? It will beinteresting to see if its helped sales.

Dick Dasterdly

Interesting post.
Pity the poor sods who have bought into the Torre Lugano.

Dick Dasterdly

Much depends on whether property owners are willing or able to pay astronomical urbanisation fees under the present circumstances.
I would imagine there could be more than just a little resistance.

HBG

The people I feel really sorry for are the expats who came to Spain three to four years ago and bought a property, often off-plan or what turned out later to be an illegal development, having sold up in the UK. Many had tight finances based on an exchange rate of around 1.40 Euros to the pound and an English pension income of sorts.

When the exchange rate fell dramatically, they could no longer afford to live in Spain, and when they went to sell their homes they found that the values had slumped, or were impossible to sell. Many hung on until they had to return, penniless, with their homes being repossessed for debts run up during their vain hopes of a recovery.

That’s how it stands today, the property market is still falling although the pound has recovered slightly.

What can you say to the eager Brits still wanting to come over and buy property? If they buy something valued at 150K today, it is almost guaranteed to be valued at 100K in two years time. And still they come. And still they buy bars. And still they look for jobs where there aren’t any.

They’re probably hanging on to their Woolworth shares waiting for them to recover.

Bri and Katee

We bought in 2006, nice 4bed villa for 240.000€. Now in the same area you can buy a similar property with 3 car garage, 12 mtr pool and spa and all landscaping for 160.000€. We are well out of pocket and can only hope that by the time we want to sell in around 16 yrs time we will make our money back.

JLFS

Any info on the -woolworth share price would be very welcome, if I can get a decent price for mine, I might sell.

HBG

I wanted to do the same, but they must have been moved to some obscure market. I've got some Polly Peck ones too. But my half sovereign is doing well, I wish I had more of them.

JLFS

Actually I have not got any Woolworth share, I have never owned any but I thought it was the best place on earth when I went to live in the UK.
I had never seen a place like it, the store seemed huge, much bigger than any shop I had been to in Spain.(looking back now they were tiny)

And seeing everything a kid could want in one place was fantastic.
Pick and mix definately seemed the way to go.

I would put one sweet in the bag and one in my mouth........

It did not seem like theft but it was.