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-   -   Is the property market doomed (https://britishexpats.com/forum/spain-75/property-market-doomed-934164/)

dougal03 Aug 4th 2020 1:48 pm

Is the property market doomed
 
What a shame for those who had their property up for sale before the pandemic.Estate agencies all seem to be on very short hours or closed for August.The lack of clients from other countries must be a problem too with the restrictions.Wonder what the future holds,is it back to the recession years or is there hope for some stability?I suppose it depends on areas as,with Brexit on the cards,the south of Alicante region with many British there could suffer the most.Any thoughts?

bfg69bug Aug 4th 2020 4:04 pm

Re: Is the property market doomed
 
it will be good for the people looking to buy a house, if the bank are still giving mortgages ... not so great if you have to drop your asking price by 50% to get a sale...

jonboy Aug 4th 2020 9:39 pm

Re: Is the property market doomed
 
It seems to be calamitous for sellers over the next 5 years or so. We always thought property was a sure thing in the UK but with Spain it has been disaster followed by further disaster. Sad for the majority. Having said that, world wide there is calamity,Spain is just a bit closer to home.

P.S I'm an optimist!

R.Scratcher Aug 5th 2020 9:54 am

Re: Is the property market doomed
 
I read somewhere, some years ago, that buying property in Spain is like getting a tattoo. Very easy to acquire but very difficult to get rid of.

spainrico Aug 5th 2020 4:34 pm

Re: Is the property market doomed
 
Some good price analysis here

https://www.fotocasa.es/blog/comprav...B330%5D-050820

chopera Aug 7th 2020 8:59 am

Re: Is the property market doomed
 

Originally Posted by spainrico (Post 12892797)

Problem is the data is based on asking prices on the Fotocasa website. AFAIK The actual prices properties are sold for aren't published anywhere, although I think the notaries do give out some broad data on this, albeit a few months behind.

spainrico Aug 7th 2020 9:34 am

Re: Is the property market doomed
 
Yes chopera you are right getting actuals is virtually impossible in Spain - no Zoopla here!

This from a Mark Stuckland article -
'But many estate agents don’t want more transparency, as the lack of transparency gives them greater control over price expectations on both sides, and allows get away with higher commissions. The real problem, as I’ve said many times, is the lack of reliable, independent pricing information available to both buyers and vendors in Spain, where actual sales prices are not published online as they are for free in other countries like the USA. When both buyers and vendors know the actual sales prices of similar properties, price expectations are much more aligned, and there is no reason to inflate asking prices.'

https://www.spanishpropertyinsight.c...pc-in-the-usa/

chopera Aug 7th 2020 9:50 am

Re: Is the property market doomed
 
I agree totally. As an estate agent once told me back in the UK many years ago "a correctly priced property will always sell". The fact the estate agents in Spain don't even price to market kind of begs the question what do they actually do to deserve their huge commissions? They don't even take part in the exchange/completion either.

spainrico Aug 7th 2020 10:00 am

Re: Is the property market doomed
 
I had my own (legal!) Spanish estate agency which I closed after the 2008 crash. In that era we sold mainly new properties and often spent a week with clients answering 100s of questions and driving miles etc so I think we earned our commissions from the builders and we always went to the notary with our buyers/clients.

But yes (same as the UK) sometimes estate agents get an easy ride - take an instruction to sell, stick a photo in the window/web site and show a buyer then sit back and wait for the commission.

I think here the seller wants to set the sales prices based on what they paid and what they now want and yes they usually factor in 10-20% more to allow for offers/negotiation.

Anyway, at least here the system is less prone to gazumping and fewer chains and shorter completion dates.

For any newbies reading this thread - always use an independent, professionally qualified solicitor to buy/sell property especially if you don't speak Spanish/understand the relevant laws and processes.

The biggest problem here is the high oncosts on buying property whether it is new or 2nd hand.

chopera Aug 7th 2020 10:24 am

Re: Is the property market doomed
 
i'm probably thinking of a slightly different market as I've only bought and sold in Madrid. If you are selling to foreigners mainly then there might be more effort required in arranging viewing trips, explaining the system and general oversight, etc, etc. I bought one property through an agent in Madrid and they were very good, but I've viewed plenty with agents who simply didn't care. Some of them were running their "business" out of their bedroom. No offices or any evidence that they were legitimate. They had no information on the property whatsoever, not even the size of the property.

spainrico Aug 7th 2020 11:04 am

Re: Is the property market doomed
 
Yes, it is a strange quirk in a country were to be an official translator or a tour guide (for instance) you need professional qualifications, etc but to flog houses anybody can have a go.

It was the same on the costa Blanca many people were looking to earn commissions by finding buyers and passing them on to agents or trying to do the process themselves during the boom years. And even stories of agents 'locking up' clients in hotels to keep them from being preyed on by poachers.

There are professional estate agency bodies but membership is not compulsory but sellers/buyers would be wise to use those that are members.

Lynn R Aug 7th 2020 11:31 am

Re: Is the property market doomed
 
I bought my present property through a Spanish estate agent (who doesn't speak any English) from a Spanish vendor. The agent accompanied the vendor to the signing of the compraventa agreement at my lawyer's office, and to the notary for the completion. I don't know how many prospective buyers he had to show it to, but I suspect very few as I saw in advertised the first day it appeared on his website and arranged to view it the next day. He was very on the ball about making sure the vendor had all the right paperwork and getting it to my lawyer very quickly, so quickly in fact that we were able to complete in just one week. He has since been very helpful in helping us to rent out the parking space which came with the apartment, just took the first month's rental as commission.

I agree with spainrico that the main problem with the Spanish property market is the high cost of both buying and selling in terms of taxes and legal costs. It has not been my experience that Spanish property is invariably difficult to get rid of - I sold my former house 3 months after putting it on the market and am aware of at least 3 other properties in the same vicinity which were sold just days after going up for sale, not counting the new one I bought which as I said we completed on a week after seeing it advertised. It is very mixed though, I know of others which did indeed take years to sell. In some cases it's easy to see why, in others not so much.

steviedeluxe Aug 7th 2020 12:49 pm

Re: Is the property market doomed
 
I don't want to join in the discussion here on whether estate agents deserve their commission, not least as the other posters are far more knowedgeable than I.
However the thread header does pose an interesting question. Prior to Covid places like Barcelona and Madrid were seeing strong growth in property prices, feeding into rent rises that were being complained about in various forums and facebook. Some of this was put down to the likes of Airbnb landlords.
The situation appears to have completely reversed. All those complaining about excessive rents in Madrid and Barcelona will now be able to ask for and get lower rents. Like other major cities they've had a double blow - the tourist numbers have evaporated, and a lot of commuters/office workers are now working from home.
Even if a working vaccine is introduced soon, it could be many years before those markets recover.
On the other hand, it may not be so bleak for holiday homes in smaller settlements. People who have been stuck in small city apartments during the lockdown, may be thinking of buying somewhere near the coast, or even in the hills. And if another spike of covid turns up, where would you prefer to be? In the city or in a quieter town?

chopera Aug 7th 2020 2:00 pm

Re: Is the property market doomed
 
Yes AirBnB definitely helped push up prices in central parts of Madrid. More generally there is still the feeling the market has been propped up by the supply of property being artificially restricted. This happened during the last crisis, when banks sat on a huge amount of repossessed properties that were never priced to market, partly to make the banks appear better capitalised than they actually were. It seems that a lot of those properties were eventually sold off in bulk to hedge funds (Blackstone bought half of Banco Popular's stock) and they are now sitting on them. Maybe the hedge funds will be more motivated to sell bad assets if the market crashes, but I'm not holding my breath.

Chipmonk Aug 7th 2020 2:49 pm

Re: Is the property market doomed
 
It is important when buying property in Spain to not view it as primarily as an investment. Return in Spain has been very low for at least 20 years. Also the idea of renting to cover costs or provide an income is difficult. Everyone I know who is a non resident confidently tells me how much they will make through easter/ summer rentals but given the new laws and restrictions I have my doubts. Finally make sure you are aware of inheritance tax as that could effect your children if the estate in Spain is not carefully protected or you live in a less generous zone than Madrid or Andalucia.


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