The following was published in the Costa Blanca News this week:
Dear Editor,
The two main economic indicators of house price stability are house prices compared to salary and house prices compared to rental income. Over the last six years house prices on the Costa Blanca have risen 300 per cent. During the same time salaries have risen approximately 15 per cent and rental income has remained all but static.
On this analysis it seems a house price collapse is inevitable in the not-too-distant future. It is with some relief, then, that we have sold our property in Spain. Our modest two bedroom apartment was bought for £36,000 six years ago and we’ve just sold it for nearly £100,000. When we bought, it was cheap compared to UK prices. Now it is more expensive than similar properties in the UK outside of the London area. Clearly the situation is unsustainable and property prices must soon fall. Of course, the situation is not helped by the greed of the estate agents. The more reputable, high profile agents are charging 18 per cent commission and higher. Bearing in mind they would have received £6,480 when we bought, they are now receiving £18,000 for the same amount of ‘work’. Quite how they justify this is a puzzle. Well, no it isn’t - they can’t.
For making a successful introduction from the UK, the UK agent alone gets anything upwards of £2,000. They are just greedy and before long they will have killed the golden goose. It would be interesting to see if any spokesmen care to reply to the specific issues I have raised. Of course, they do a lot more than UK estate agents but nothing that remotely justifies their inflated fees.
I said at the start, in six years salaries have risen by about 15 per cent: the exception to this is, of course, the income of estate agents and property developers.
Yours sincerely, Frank Kahney.
Good to see that the HPC letters to newspapers campaign is going international!
The Costa Blanca is of course plagued by the LRAU land grab law.
It really would be very foolish to buy property in this part of Spain and indeed any part of Spain. Wait for the crash to happen.