mrs teapot

It's taken me 5 years to persuade Mr Teapot to buy in Spain, and now this happens:

http://www.telegraph.co.uk/money/mai.../cnspain25.xml

Its also in the FT online, but you have to subscribe to get the whole story.

Mr Teapot is seriously considering pulling out of our current house purchase, before its too late.

mrs teapot

Well ten of you have viewed this so far, but no comments. Anyone care to comment, I'm all ears!

big wheels

As I don't invest in the Spanish Stock market, and our house is a home and not an investment. I couldn't care less

Well you did ask

crispy

Hi Mrs Teapot, I haven't read the article as it was taking to long to open, buying property is risk no matter where it is, the market will go up and down but if you can afford to ride it out then it should make no difference. As big wheels said, if you have bought and it is your home then it should not be such a problem. Back in the 80's friends bought their house for £125, 000 five years after buying they wanted to sell but it was only worth £68,000 know the market value is £220,000 who can tell what will happen_
By the way good to hear from you was just thinking over the weekend I had not seen postings from you, although I don't read all the threads.

Mercedes

Same here.

Anyway it's a good time then to buy if houses are coming down as you will get a better property and be able to save some money and have the lifestyle you want.

Mourinho

There is a correction coming , it is said spanish property although not all of course is 30% over valued . over supply and rising interest rates will be main contributaries .

Great news if you havn't bought yet , even if you can't wait to , sellers know the situation so a low offer on existing properties for sale well worth a punt !

Lis48

The article doesn´t say anywhere that prices are coming DOWN. Merely that the RATE of increase is back to 5% p.a., the level of 2001
Prices are STILL rising apparantly. That´s still not a bad return on your money each year though not as good as the 13% of a couple of years ago. I think personally the market has stabilised to a more sustainable level after the incredible increases between 2002 to 2004.

jdr

Article on it HERE

tim hortons man

Here's a couple more articles on the same subject

http://www.telegraph.co.uk/money/mai.../cnspain25.xml

and

http://www.ft.com/cms/s/f748439e-f29...ml&_i_referer=

and

http://www.ft.com/cms/s/8107c6de-f24...b5df10621.html


It's been in the news for a while that the Spanish housing market is very close to peaking if not already done so. In the case of the stock market investors are fast retreating from Real Estate companies. In the case of the housing market experts are divided over if it will be a soft landing (prices level out for a few years) or a hard crash. For sure house prices won't be increasing any more at anywhere near the same rates.

I'm leaning towards the hard crash side of things. House prices in Madrid are much much higher than in the south on England. Spain is over developed and way over priced. who the hell can afford half a million pounds for a poorly built townhouse on a salary of a 1000 euros a month.

Secondly and more importantly while Spain has made a great deal of progress in diversifying the economy they are still way too dependant on tourism and housing. The other problem is that is that they are still building too many new homes/apartments. Last year 800.000 new dwellings went up and there is only demand for 400.000 units per year. For sure the great housing boom has ended. One only has to look to America to get an idea of what's going to happen here. I think personally it's going to be very painful.

If your retired with a nice pension in pounds and a paid for house you won't notice anything. But if you like my co-worker who just signed on for a 40 year 2000 euro a month mortgage payment than the pain will be real.

I'm very happy to be a renter.

Rob in Madrid

mrs teapot

Thanks Rob,
Very informative and thanks for the links. I appreciate your response!!!!!

We have bought in an undeveloped area at a low start up price , but will need a small mortgage. We want to hang onto it for a few decades before moving on, so we might still be okay. I will have to urgently look into the implications more...

Sorry for your friends predicament.

mrs teapot

Your second link - the first FT report, still needs me to subscribe to read it. Pity.

SoJohn

Hard to say what will happen. Spain is totally different to America. Americas reason for a crash was a slowing economy and the simple fact they gave mortgages to people who couldn't afford to pay.

The one thing that makes me wonder about Spain is the amount of people owning 2 or 3 houses. I'm not even talking about "rich" people. The Spanish seem to keep their relatives houses after they have died, etc. In England they tend to be sold off and the funds divided. As such a common attitude is "I can save this house for my children". Now, people like this who have decided to sell don't NEED the money. Try telling them their house is now worth 30% less than it was last week. They can afford to wait 3 years for someone to come along who decides they want it. In the mean time they rent it out and spend time their themselves. The Spanish love having a second house to go to for weekends and such.

Of course, people with mortgages will suffer. Prices on new builds will likely come down.

Big_john

As Big Wheels has said if you don't invest in the Spanish Stock market it will not affect you, yes there will be bargains around as I have said previously on about the 10th THREAD on property.

I also agree with Liz48,

Depends where you live how much your house will rise in price, Lugo last year was the highest rising area for houses it changes all the time.
House prices stopped making huge increases back 5/6 years ago, until then I was making loads of dosh, 5/6 years ago I stopped building, now just do one at a time in selective areas.

Madrid and Malaga province were overbuilt 6 years ago let alone now
Yet these major constructors should have known better, but then after all they are (Spanish) so you have to allow some leeway

Where on earth do they think all of us brits were coming from do they think that we keep on growing on trees and it is a never ending supply, after all every country in the Med is fighting for the same clientele

tim hortons man

I've noticed that here, alot of people I've met all have second and third homes. Some are holiday homes others are rented. Generally they inherited them or bought them very cheap so a decline in prices won't affect the pocket book much.

The reason for the comment about America is that when house prices decline/crash it usually throws the country into a resesion. In Spain this will be a big problem because a slow down in housing market will have ripple affects over the whole ecomony. I can see Spain falling into a rescession with higher unemployment and slow growth. The good news is you don't need to buy tomorrow to avoid a huge price increase. I would expect to see a decline of 25-30% in house prices over the next few years. The simple fact is there are too many properties chasing too few buyers. As I see articles I'll post them.

Again property is all about location location location

SoJohn

I will be looking to buy in Galicia in 18 months or so. I will be renting for a year first. Of course, I am treating all news at this time with caution, I don't want to get too excited