Originally Posted by SaritaBarcelona (Post 8603715)

Thanks for this useful link Rotor, I will now ask for words from previous comments on my financial "nous" to be eaten... it turns out to be cheaper to buy my property!!! Admittedly if the interest rate goes sky high it would be cheaper to rent for the first 16 years...

Originally Posted by Lynn R (Post 8603370)

I will not be looking to sell my Spanish house (which is mortgage free) for at least another 5 or 6 years - unless something completely unexpected crops up. Although previously I had always felt it was better to buy as rent was wasted money, now I think that when I do sell I will rent rather than buy, for several reasons. Looking around now at rental properties, it seems I could certainly afford to rent somewhere far nicer than I could afford to buy (as I will have a lot more income in 6 years' time when my pensions become payable). Also I just do not want to pay another 10% of the purchase price in legal fees, taxes etc., having already done it once. That money alone could pay a few years' rent, and from what we have seen in the last couple of years there is no kind of guarantee that the price of property would appreciate enough to cover the initial outlay on taxes, etc.

I also feel it would be less complicated for my family who will inherit my estate if they do not have to deal with the added stress of selling a property in another country.

Provided I was able to rent somewhere unfurnished and thus have my own things that I had chosen around me, I think I could live quite happily in rented accommodation.

Originally Posted by bobd22 (Post 8604232)

Yes I think I would intend to agree with your views

Originally Posted by jdr (Post 8603332)

So all he stories of the banks being bailed out are myths ?

Originally Posted by Tele Addict (Post 8604296)

You don't get it. Imagine every month since 20 years ago I have paid all my bills on time but this month I just can't raise enough cash, not because I don't have the assets, but because I don't have them in readies. So I pop round to mum and borrow a couple of grand and pay all my bills to my creditors. When my debtors pay me I give mum her two grand back and don't have a cash flow problem for another 20 years.

Now all you have to do is swap "I" for "the banks", and "mum" for "the government".

And don't think the banks don't have assets because the truth is they own millions of properties in Spain, or at least a far greater share in them than the public as a whole. And maybe your going to say, "but the prices of those properties have gone down" but in most cases that has just wiped the client's share of the equity off the top. I guess in some cases the bank may have lost a few miserable percent, but not in many.

Originally Posted by SaritaBarcelona (Post 8604516)

You have brought up a good point JDR, why on earth don't they create "council housing" or housing associations like in the UK, instead of that ridiculous housing lottery that anyone can register for here. At least it would be a way to recoup some of their money, not have empty properties, and give people who can't buy a chance to live somewhere decent at a fair price. Incidentally, we know a Spanish girl who has wealthy parents and earns loads who was awarded a 3 bedroom flat near Barcelona to buy at a drastically reduced rate (like VPO I think, not 100% sure, but from the ayuntamiento). Her and her partner (not the original one she entered the lottery with!) were awarded one of these swanky flats, they are paying very little per month and are now renting out rooms in it. They have no children, whilst there are people with children in the same town who left empty handed. I'm not into the whole "have children to get a council house" idea but the limited "social housing" system in Spain is just unfair full stop. Anyone know any more about this and how it works?

Originally Posted by jdr (Post 8604464)

Tell me how they haven`t lost money if they mortgaged a house for 300'000 and builders gone down the pan and all they have now is a property that is worth nothing like that and they can`t sell or even rent out ?

Originally Posted by Tele Addict (Post 8604666)

Losing a bit of money is just a blip. Yes it caused a bit of a cash flow problem for a few months and the government stepped in where necessary, but that's all in the past now and the banks are back to making a fortune again.

Here's an example of how they haven't really lost as much as people think. I went to a client the other day and he's a bit of a speculator. He owned a flat outright in Altea (value 140,000€). Been investing all his life and decided to cash in some investments and invest in property about 3 years ago. Investments yielded 500,000€. Borrowed 500,000€ from the bank and bought 4 houses (total cost with taxes 1,000,000€). Rent out 3 and decided to live in the 4th. Now 3 houses are empty as the tenants couldn't pay. Sold the flat in Altea for 88,000€ to raise funds to keep up with the mortgages. Current combined value of the 4 house is around 550,000€.

Anyway the bottom line is the bank put in 500,000€ and still owns 500,000€ equity. The speculator put 640,000€ and now has about 80,000€ left minus about 2,000€ every month in payments to the bank. So the bank is, well, laughing all the way to the bank.

Originally Posted by Tele Addict (Post 8604666)

Losing a bit of money is just a blip. Yes it caused a bit of a cash flow problem for a few months and the government stepped in where necessary, but that's all in the past now and the banks are back to making a fortune again.

Originally Posted by cricketman (Post 8605449)

I tend to agree with JDR on this one. The banks have made tremendous profits over the past 10 years, but their supposed "profits" now are starting to look like a house of cards. If you half the official value of the properties on the books of Spanish banks