soldintime

Spanish Property - How Much Would You Pay To Own One

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I will soon be talking to some Spanish banks that have loads of unsold property on their books. According to a friend of mine they are now much more flexible to do deals and drop the prices.

If you were in the market for a holiday home in Spain how much are you willing to pay and for what type of property.

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[quote name='soldintime' timestamp='1321610528' post='3181881']
I will soon be talking to some Spanish banks that have loads of unsold property on their books. According to a friend of mine they are now much more flexible to do deals and drop the prices.

If you were in the market for a holiday home in Spain how much are you willing to pay and for what type of property.
[/quote]

You'd have to be more specific about location - it's a big country. Doubt you'd get much of a discount (if any) in Ibiza. Nor in Madrid or Barcelona (although to be fair not everyone would want a holiday home there). Always likely you could rent out property there most of the year - ask any English teacher how keen the market is for rentals.
But in places like Almeria and Murcia - yes, big bargains are possible. But what are you looking for? a sea view? Access to facilities eg shops, bars, banks etc. Or do you need the ability to rent out to holidaymakers? In that case maybe Marbella or Sotogrande are better bets - but the prices will be high.

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[quote name='Trampa501' timestamp='1321611831' post='3181899']
You'd have to be more specific about location - it's a big country. Doubt you'd get much of a discount (if any) in Ibiza. Nor in Madrid or Barcelona (although to be fair not everyone would want a holiday home there). Always likely you could rent out property there most of the year - ask any English teacher how keen the market is for rentals.
But in places like Almeria and Murcia - yes, big bargains are possible. But what are you looking for? a sea view? Access to facilities eg shops, bars, banks etc. Or do you need the ability to rent out to holidaymakers? In that case maybe Marbella or Sotogrande are better bets - but the prices will be high.
[/quote]


I am asking people that question. It is probably more targeted to the holiday market. With the glut that is there i do not expect good long term rental prospects. basically home in the sun that you rent out maximum 5-8 weeks a year.

Looks like Santander is trying to offload a chunk of its poperty portfolio - http://www.ft.com/intl/cms/s/0/240f7f4e-ffe5-11e0-89ce-00144feabdc0.html#axzz1e3GlxrgY

Morgan Stanley looks likely to get it at a 60% discount.

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[quote name='soldintime' timestamp='1321612646' post='3181905']
I am asking people that question. It is probably more targeted to the holiday market. With the glut that is there i do not expect good long term rental prospects. basically home in the sun that you rent out maximum 5-8 weeks a year.

Looks like Santander is trying to offload a chunk of its poperty portfolio - http://www.ft.com/intl/cms/s/0/240f7f4e-ffe5-11e0-89ce-00144feabdc0.html#axzz1e3GlxrgY

Morgan Stanley looks likely to get it at a 60% discount.
[/quote]

This 60% discount is already based upon a portfolio which had some write downs. This could mean if you bought at peak you look at a 70% loss. Bad if you try to sell.

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[quote name='soldintime' timestamp='1321612646' post='3181905']
I am asking people that question. It is probably more targeted to the holiday market. With the glut that is there i do not expect good long term rental prospects. basically home in the sun that you rent out maximum 5-8 weeks a year.

Looks like Santander is trying to offload a chunk of its poperty portfolio - http://www.ft.com/intl/cms/s/0/240f7f4e-ffe5-11e0-89ce-00144feabdc0.html#axzz1e3GlxrgY

Morgan Stanley looks likely to get it at a 60% discount.
[/quote]

60% discount from what though ? The figures the banks have in their books are nonsense but left there otherwise the house of cards falls in on itself. Ask yourself if Santander or the other banks will be writing down their retained property values by 60%!

Yes there are some 'bargains' out there but maybe before people jump in they might want to ask why they are a bargain.

As for buying in Spain remember the government's relationship with property. They provide statistics that suggest the market has not fallen too much, tax on property sales at not necessarily what price you buy but what they think the value should be, allow new builds then decide they did not have the required consents, look to fill the gaps in the numbers with other property related wealth taxes etc.

Unless I was offered one in the main cities or was thinking of living there no thanks to a second home on the costas - renting for holiday seems the sensible option for now.

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http://www.bloomberg.com/news/2011-11-17/spain-s-unsellable-real-estate-assets-threaten-smaller-banks.html

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According to this report (in Spanish) 13.2% of residential property in Spain is unoccupied.

[url="http://www.idealista.com/news/archivo/2011/11/18/0364053-el-13-2-de-las-viviendas-en-espana-estan-vacias"]Idealista - unoccupied property in Spain[/url]

The biggest surprise (or perhaps not) is that Barcelona is the province with the highest number of vacant properties. I suspect it's a bit like Docklands where speculators have flooded in, and are content to leave property unoccupied, in the hope of gains further down the road.

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Wow! Some bargains starting to appear now in Valencia city. A 3 bed apartment for 35k for example! Obviously it may need a little attention, but I never thought prices would come down so much in a big city there.

[url="http://www.fotocasa.es/vivienda/valencia-capital/san-juan-de-la-pena-126838446?opi=1&tti=1&pagination=1&RowGrid=15"]35k 3 bed room flat[/url]

Almost convinced my better half to migrate when I showed her that (and she doesn't speak a word of Spanish). Rather tempted to take a mortgage on it (the site is quoting 118 Euros a month) and do some English classes to pay the bills.

Main problem in Valencia is the water is foul. You have to buy loads of the stuff to drink and also for coffee. tea etc. Great climate though. Edited by Trampa501

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[quote name='Trampa501' timestamp='1323181222' post='3200634']
Main problem in Valencia is the water is foul. You have to buy loads of the stuff to drink and also for coffee. tea etc. Great climate though.
[/quote]

Main problem in Spain is that the authorities don't think twice about taking your property off you... ie all the land grab / getting the victims to pay for the destruction and removal of their own properties.

In a SHTF situation (eg. leave EUR/devaluation/civil breakdown), the spanish would just declare that all property rights belonging to non-spanish citizens are null and void / are now the property of the spanish state / you will be forced to sell to the state at cents to the new peseta. Once outside the EU law, they can and will do whatever they want to protect their own citizens. As to be expected.

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[quote name='Trampa501' timestamp='1323181222' post='3200634']
Main problem in Valencia is the water is foul. You have to buy loads of the stuff to drink and also for coffee. tea etc. Great climate though.
[/quote]

This will become more of a problem in the future, Spain is going to get less and less rain making agriculture impossible and drinking water expensive.

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[quote name='Peter Hun' timestamp='1323253588' post='3201412']
This will become more of a problem in the future, Spain is going to get less and less rain making agriculture impossible and drinking water expensive.
[/quote]
Are you really sure about this? Spain has had far more rainfall in the last few years, compared to the 90s. I'd hate to predict rainfall 2 weeks ahead, never mind 5 years!
Plenty of wet mountainous areas in Spain for the drinking water.

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The north coast where I am living at the moment Santander area has a lot of rain.
Also, comment about property grab etc in worst case scenarion, Im sorry thats a bit far fetched really isn't it? :)
Just dont look at Almeria etc.
If a problem like that occured in Spain, it would be Global and owning a house in the UK would be just as unsafe.

I am seeing now on sites like Thinkspain a lot more lower priced properties etc.
More affordable on the north coast now, Extremadura a lot of cheaper places but its a bit out of the way.

One problem is I can forsee is deciding you like a house, transfer your money to Euros to buy then the Euro collapses!

[quote name='Trampa501' timestamp='1323259174' post='3201511']
Are you really sure about this? Spain has had far more rainfall in the last few years, compared to the 90s. I'd hate to predict rainfall 2 weeks ahead, never mind 5 years!
Plenty of wet mountainous areas in Spain for the drinking water.
[/quote]

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If it floats, flies or f1cks: rent it.

Do you really want to go to the same place every summer for year upon year? I can't understand it.

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Might be an idea to wait until after the Euro collapses

[img]http://av.r.ftdata.co.uk/files/2011/12/ING_breakup_houseprices.png[/img]

[img]http://av.r.ftdata.co.uk/files/2011/12/ING_breakup_DEM.png[/img] Edited by Peter Hun

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[quote name='Trampa501' timestamp='1323259174' post='3201511']
Are you really sure about this? Spain has had far more rainfall in the last few years, compared to the 90s. I'd hate to predict rainfall 2 weeks ahead, never mind 5 years!
Plenty of wet mountainous areas in Spain for the drinking water.
[/quote]


Global warming predicts severe water shortages for Spain

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[quote name='Peter Hun' timestamp='1323720278' post='3206606']
Global warming predicts severe water shortages for Spain
[/quote]
If any country outside the Sahara knows about coping with hot summers...You'll find it's central Europe strugglig to cope with low rainfall at the moment.
Plenty of mountainous areas that get loads of rainfall in Spain (it's the second most mountainous country in Europe). Of course places like Almeria and Murcia have dry spells, but they know how to cope. At worst they may have to build more de-salination plants for cleaning water etc. As mentioned before a lot of people buy drinking water separately on the coastal areas. It's actually rain in large amounts (over a short time) that creates more problems in Spain.
As for leaving the Euro - that will probably ignite the market as bargain hunters swoop in. I think it must be very tempting for Greece, Italy or Spain to jump the gun. Of course as soon as one does this and devalues, then the others will have to keep step if they want to hang on to their tourist market.

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[quote name='Peter Hun' timestamp='1323720213' post='3206604']
Might be an idea to wait until after the Euro collapses

[img]http://av.r.ftdata.co.uk/files/2011/12/ING_breakup_houseprices.png[/img]

[img]http://av.r.ftdata.co.uk/files/2011/12/ING_breakup_DEM.png[/img]
[/quote]
I bet these forecasts about something that may happen are deadly accurate.

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[quote name='Trampa501' timestamp='1323724507' post='3206687']
If any country outside the Sahara knows about coping with hot summers...You'll find it's central Europe strugglig to cope with low rainfall at the moment.

[/quote]

Being able to cope doesn't grow crops and mountains don't have water. The report I read was about the effect of global warming and its a climate, not weather, so we are talking 50 years timespan.

Not that its related, but Poland sits on a huge, deep subterranean lake. You need water - drill and pump. Its useful for geothermal as well as its a constant 18C

[quote]I bet these forecasts about something that may happen are deadly accurate. [/quote]

They may be. Edited by Peter Hun

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We're in Spain (Marbella) for a month break. I've popped into a few EAs along the Costa del Sol, out of interest, and they all say the same thing.... "Yes, prices are falling in Spain, but not here". EAs are the same the world over :lol:.

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I think we're starting to see real bargains show up now in Spain. Of course they may yet go further, but with the pound strengthening against the Euro these prices (at least to myself renting in London) look a steal

3 bedroom flat, 1 bathroom in Granada 24,800 Euros (£19,480). Main drawback here (from what can be gleaned from the web page) is it's 4th floor - and no lift is mentioned

[url="http://www.idealista.com/pagina/inmueble?codigoinmueble=VP0000005384953&numInm=41&edd=list"]Granada property[/url]

Or if you want to be near the coast what about this Valencia 2 bedroom flat (that does have a lift) 42,000 Euros (33k pounds)
[url="http://www.idealista.com/pagina/inmueble?codigoinmueble=VP0000005474362&numInm=21&edd=list"]Valencia property[/url]

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[quote name='Trampa501' timestamp='1342440414' post='909089900']
I think we're starting to see real bargains show up now in Spain. Of course they may yet go further, but with the pound strengthening against the Euro these prices (at least to myself renting in London) look a steal

3 bedroom flat, 1 bathroom in Granada 24,800 Euros (£19,480). Main drawback here (from what can be gleaned from the web page) is it's 4th floor - and no lift is mentioned

[url="http://www.idealista.com/pagina/inmueble?codigoinmueble=VP0000005384953&numInm=41&edd=list"]Granada property[/url]

Or if you want to be near the coast what about this Valencia 2 bedroom flat (that does have a lift) 42,000 Euros (33k pounds)
[url="http://www.idealista.com/pagina/inmueble?codigoinmueble=VP0000005474362&numInm=21&edd=list"]Valencia property[/url]
[/quote]

Yeah they sort of look cheap but....
What are yields like? That gives a pointer regarding a property's value...
Can you even rent them out - is there demand? At what price?
I notice that new apartments are many times more expensive than old in Valencia. Maybe that's because that's the only type of property for which there is demand?
What happens in Spain re. service and maintenance charges of an apartment building?
With 25% unemployment, obtaining and choosing good tenants might be tricky.
If it's to live in - fine, but what will you do for a living?

My guess is that only by by living there for a while and speaking fluent Spanish would you be able to accurately assess things.

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[quote name='swissy_fit' timestamp='1342457212' post='909090162']
Yeah they sort of look cheap but....
What are yields like? That gives a pointer regarding a property's value...
Can you even rent them out - is there demand? At what price?
I notice that new apartments are many times more expensive than old in Valencia. Maybe that's because that's the only type of property for which there is demand?
What happens in Spain re. service and maintenance charges of an apartment building?
With 25% unemployment, obtaining and choosing good tenants might be tricky.
If it's to live in - fine, but what will you do for a living?

My guess is that only by by living there for a while and speaking fluent Spanish would you be able to accurately assess things.
[/quote]
As I said, I'm not looking to make money, just avoid throwing thousands down the drain each year here in the UK. I suspect that I'll soon be paying 10k+ a year just to rent a small flat here in the UK - makes far more sense to buy a cheap place at around 30 k (with an extra bedroom) abroad to live. Considering Spain as I know from experience you can get teaching classes in towns/cities that aren't beach resorts...
The one thing I'm wary of is stairs without a lift - I'd be ok now using the stairs, but it may become a concern in 5 or 10 years time, if I live that long. The lift/stairs issue is probably why new apartments have higher asking prices. Edited by Trampa501

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[quote name='Trampa501' timestamp='1342461421' post='909090205']
As I said, I'm not looking to make money, just avoid throwing thousands down the drain each year here in the UK. I suspect that I'll soon be paying 10k+ a year just to rent a small flat here in the UK - makes far more sense to buy a cheap place at around 30 k (with an extra bedroom) abroad to live. Considering Spain as I know from experience you can get teaching classes in towns/cities that aren't beach resorts...
The one thing I'm wary of is stairs without a lift - I'd be ok now using the stairs, but it may become a concern in 5 or 10 years time, if I live that long. The lift/stairs issue is probably why new apartments have higher asking prices.
[/quote]
It'd still be worth renting for 6 months there before buying, to know what you're getting.

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[quote name='swissy_fit' timestamp='1342457212' post='909090162']
Yeah they sort of look cheap but....
What are yields like? That gives a pointer regarding a property's value...
Can you even rent them out - is there demand? At what price?
I notice that new apartments are many times more expensive than old in Valencia. Maybe that's because that's the only type of property for which there is demand?
What happens in Spain re. service and maintenance charges of an apartment building?
With 25% unemployment, obtaining and choosing good tenants might be tricky.
If it's to live in - fine, but what will you do for a living?

My guess is that only by by living there for a while and speaking fluent Spanish would you be able to accurately assess things.
[/quote]


Yield will be 0%, you probably won't find tenants and if you do it could end up expensive. Spain is not a place for property 'investment', not now and probably 5-10 years hence.

Remember also taxes have gone up and will some more. Vat is up on food and rebuilding materials/costs for instance.

Be aware that you will be taxed on the official purchase price which be higher than the price you paid.
Be aware that you may be taxed on your worldwide income.
Be aware of cost for maintaining the communal area's which can be 1000 euro's per month
Be aware that the government will find new ways to tax you. Edited by Peter Hun

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[quote name='Peter Hun' timestamp='1342517811' post='909090572']
Yield will be 0%, you probably won't find tenants and if you do it could end up expensive. Spain is not a place for property 'investment', not now and probably 5-10 years hence.


[/quote]

I do have some experience of living/working in Spanish cities. Not that getting a rental return overly concerns me, as I'm looking for somewhere to live, instead of forking out 10k a year here in the UK (which may surge in the future if inflation does come back).
Many English teachers (especially the ones new to the game) find it difficult to find suitable places to rent in Spanish cities. Part of this is because there is a natural reluctance to allow tenants into people's property. It has meant that finding a place to rent in somewhere like Madrid is often difficult for Brit/Irish or American expats, and this has been the case for 25 years at least. So the claim that potential yield is 0% and that you probably won't find tenants, is sheer hokum. The only real downside if you want to rent out is that generally August will be empty.
In fact I may well be starting off renting a place in Madrid in the autumn, and finding somewhere suitable that isn't 30 miles away from town, will be my biggest challenge. I don't think alas I'll have the necessary resources to buy in Madrid (it's one place where prices are staying just a bit too high), so I will then look to a cheaper city like Valencia.

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