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LuckyOne

Does Anyone Remember The Polaris World Ads ?

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A few things that really emerge from the article in my opnion :

- Unlike the UK, Spain are forcing their banks to continually mark down their assets until they are sold. No mark to fantasy in Spain.

- Like California, there seems to be a two tiered market evolving in Spain : one for distressed properties (down 50%) and one for non-distressed properties (down 22.5%).

- If the British make up 70% of their buyers, the Spanish market has a long way to fall still if our market finally begins its inevitable fall to sustainable levels.

In my view, it makes no sense to buy in a market where there is an overhang of bank owned supply, whether it is actually on the market or hidden from the market in SPVs etc. The overhang will eventually push prices for everything lower even with a two tiered market as logical buyers will buy distressed properties (assuming clear title).

http://noir.bloomberg.com/apps/news?pid=20601109&sid=ar83m84Ag.XQ&pos=15

Prices of repossessed apartments built on six Spanish golf courses designed by Jack Nicklaus have been slashed by as much as 50 percent as banks try to sell assets acquired during the property market collapse.

A two-bedroom, 74 square-meter (796 square-foot) penthouse in Murcia, southern Spain, is on sale for 128,800 euros ($180,000), down from 272,000 euros three years ago. It overlooks the 18-hole Hacienda Riquelme course and has air conditioning, a 32 square-meter terrace and communal pool.

Spain’s real-estate and construction slump left thousands of vacation properties unsold and their builders facing bankruptcy. The number of homes purchased in Spain by foreigners dropped 78 percent from 2006 through 2009, according to a study published last week by the property website Fotocasa.es and the IESE Business School in Barcelona.

“This shows how desperate the banks are to offload their real estate,” said Borja Mateo, author of the book “The Truth About the Spanish Housing Market.” “The properties still look overvalued.”

Polaris World, the closely held builder of the Murcia resorts, handed over 1,500 properties and land to lenders in May 2009 to cancel 970 million euros of debt. Now the banks, which include Banco Popular Espanol SA, are using hefty discounts and 100 percent mortgage deals to help clear the backlog, according to the website of Villa Cashback, which specializes in marketing the Murcia apartments to British buyers.

An 85 square-meter, ground-floor apartment with two bedrooms overlooking the Mar Menor golf resort is on sale for 159,000 euros, down 28 percent from the 2007 price.

No Offers

Anne Simpson, a 55-year-old from the Scottish city of Glasgow, is trying to sell her vacation home overlooking Hacienda Riquelme, which she bought in 2003 for 192,000 euros before it was built. She’s had no offers so far and thinks she’d be lucky to get 150,000 euros for it.

“As beautiful as the resorts are, they are in the middle of nowhere,” she said. “It’s getting better and more populated, but it’s still a bit of a wilderness.”

Golf became part of the construction mania that swept Spain in the decade through 2007 as prices for privately owned homes tripled. The country built more courses in the period than any member of the euro region except Germany, according to the European Golf Association. There are now 345 in Spain, 92 percent more than in 1997.

Existing home prices in Spain have fallen 22.5 percent since peaking in April 2007, the study from Fotocasa.es and IESE showed. The country now has about 1.4 million unsold homes, according to Aguirre Newman, a Madrid-based property adviser.

Fallout in Spain

Spanish banks took about 60 billion euros of real estate onto their books as a result of the country’s worst recession in 60 years. Starting Sept. 30, the central bank enforced tighter rules on how much lenders have to set aside in provisions for the assets, making it more expensive to hold on to them.

In Murcia, a region providing easy access to the 250 kilometers (155 miles) of beaches lining Spain’s Costa Calida, there are 21 golf courses within 50 kilometers of each other.

Hacienda Riquelme is the largest of six courses that were fashioned by Nicklaus Design, the company founded by the 18-time golf major winner, and completed between 2005 and 2009. Three are now run by Ola Golf, a company subcontracted by IRM Estates, the group of banks that canceled Polaris World’s debt in exchange for assets.

The others are managed by Polaris, which is 40 percent- owned by Credit Suisse Group AG, according to Polaris’s website. Beatriz Suarez, a spokeswoman for Polaris, couldn’t be reached for comment for this story. IRM Estates also couldn’t be reached. Neither Nicklaus nor his company have any investment or involvement in the resorts, said Scott Tolley, his spokesman.

More Inquiries

There are signs the deep discounts for the Nicklaus golf apartments may be starting to spur interest, according to Paul Williams, managing director of U.K.-based Villa Cashback. He said his company sold four times as many of them in the first half of 2010 as it did a year earlier, declining to be more specific. He’s getting twice as many inquiries as last year.

“For the first time since 2008, we have seen the return of the ‘blind buyer,’ where a property is reserved without viewing, usually for the best discounted bank bargains,” Williams said. “Two years ago, the overriding sentiment was fear; now it’s opportunism.”

The British traditionally account for about 70 percent of overseas buyers of Spanish property. They may not be eager to splash out on vacation homes as the U.K. economic recovery falters and the government cuts spending to tackle a record budget deficit.

Brits in Spain

In 2007, about 45 percent of British buyers in Spain invested 250,000 euros to 350,000 euros, according to U.K. homebuilder Taylor Wimpey Plc, which markets golfing properties in the Spanish cities of Marbella and Alicante. Today, 20 percent are looking to spend 250,000 euros or more and 5 percent are prepared to spend more than 350,000 euros.

Gillian Kirk-Bushnell, a 67-year-old retired sales executive from near Canterbury, England, lives in her three- bedroom villa on the Mar Menor resort all year. She bought the property four years ago for 389,000 euros.

“For 132 euros a month, my lawns are mowed and irrigated, the communal gardens are kept immaculate and we have 24-hour, year-round security,” she said in an interview at the resort, surrounded by pristine greens, tropical trees and exotic plants. “This is a huge asset for people looking to invest in holiday homes.”

Murcia’s Outlook

Murcia spent 750 million euros in the past two years to boost infrastructure and lure visitors. A new international airport in Covera, a town 20 kilometers from Murcia’s city center, is scheduled to open in 2011, and a high-speed rail link connecting the area to Madrid is due for completion in 2014.

Paramount Pictures Corp. has also reached a preliminary licensing agreement with the Regional Government of Murcia for a movie-themed leisure park to be built in the area, according to Pedro Alberto Cruz, Murcia’s regional councillor for culture and tourism. The project could bring 20,000 jobs to Murcia, which has an unemployment rate of 21.3 percent, he said.

Kirk-Bushnell says she has no regrets about buying her place, even though it has dropped in value.

“It’s irrelevant,” she said. “We live in paradise here and I’m not going anywhere.”

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All these stories of the US, Eire and Spain are fantastic but we ain't those countries - we need the crash here and we need it soon.

The crash in the UK will be even juicier because of all of the money that has been wasted on delaying the inevitable.

Keep the faith for the next year. I know that you were wavering a while back. It would be a pity to fall at the last hurdle. We are so close to the finish.

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All these stories of the US, Eire and Spain are fantastic but we ain't those countries - we need the crash here and we need it soon.

...but they have crashed, they just haven't been sold yet because there is no urgency to do so or it is not in their interest to do so....the interest is just about being covered (not always by the owner) many are stuck living where they are for the time being trying to keep their heads above water. ;)

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- Unlike the UK, Spain are forcing their banks to continually mark down their assets until they are sold. No mark to fantasy in Spain.

Youve no idea how funny that is. The Spanish banks are completely rigging the market out here. They own 30% of the properties, they will not provide you a mortgage unless you are buying their properties or you have 40% deposit. As someone who lives in spain, I can tell you that UK properties are far far better value and have reduced by far more than in Spain.

That hovel being sold in the ad, is 150k for 70 odd square metres, thats the same money you pay in the outskirts of Madrid. The original 250k price FOR A 70sqm APARTMENT was just nuts, insanity.

Have a look at spanish properties here http://www.fotocasa.es/en/ use the map and look at the coast. You wouldnt give 50k for the majority of the dumps they have built. Costs 350k to get anything with a garden bigger than a shoebox.

Trust me, UK property is exceptionally good value compared to Spanish.

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Amazingly enough (or perhaps not, as Spain doesn't need to fork out for a Polaris, or a Trident) the construction of the high speed rail lines continues

Valencia Madrid high speed rail link

Minister for Development, José Blanco, considers will lead to the creation of 136,000 jobs in six months, and noted that the Government will be spending 1.6 billion € next year on the Mediterranean rail corridor, 558 million of which will go on taking the AVE to Alicante. He was on hand to supervise the first test with PP President of the Valencia region, Francisco Camps, and the Mayor of Valencia, Rita Barberá.

I certainly wouldn't invest in a Polaris type property. But I wonder if property in places like Valencia and Cuenca, may be a good long term punt. Already there are forecasts (ok it's the IMF) that Spain's economy will grow faster than Germany's or France's by 2012

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Of course, Santander have declared their mortgage backed assets in Spain have halved in value.

Of course they have. (giggles)

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The crash in the UK will be even juicier because of all of the money that has been wasted on delaying the inevitable.

Keep the faith for the next year. I know that you were wavering a while back. It would be a pity to fall at the last hurdle. We are so close to the finish.

Yes, you're right, but only if you're paying in gold. Insterling terms the price of housing will increase. £10 BigMac meal anyone? Wait, they're nearly that much already!

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Beware buying off the banks blind many of these places are in need of real upgrading many have been trashed by renters no real care has ever been taken with reposessions, my advice is to buy from EA over here lots of discounts availble on all typs of propertys you can now easily buy a 2 bed apartment in a good area for around £85000 some 50% down from a few years ago.

Also make sure the place you buy is free from debt as you could be saddled with it, all in all spain is still a great place with lots of sun and lower living costs than the UK.

Dont buy for investment cant see it recovering here for years if ever.

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Generally speaking I consider celebrity endorsement to be a great sign that its the top of the market.  In future, if you ever see a celebrity being used to endorse anything run a mile.  If the product can't be sold by a boring person in a suit or indeed sell itself, then it probably isn't worth having.

http://www.youtube.com/watch?v=vfvuwieuTxk

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...but they have crashed, they just haven't been sold yet because there is no urgency to do so or it is not in their interest to do so....the interest is just about being covered (not always by the owner) many are stuck living where they are for the time being trying to keep their heads above water. ;)

+1.The crash has already happened.In fact in the north east they have crashed BELOW 1993 levels RPI adjusted.

I bought a terrace then for £30k.They went to £90k and are now up for £40-£50k. Down 50% from highs.

Here is a listing thats been up a year,

http://www.rightmove.co.uk/property-for-sale/property-13277058.html

Here is a one in the same street,same house ,

http://www.rightmove.co.uk/property-for-sale/property-29554706.html

This is a decent area,in fact it overlooks open countryside.

As you say many up here in the 150k range are still 150k but none sell.The lower end has seen around 50% falls.Mainly due to BTL panic.

http://www.rightmove.co.uk/property-for-sale/property-27421594.html

Similar,decent area,needs a bit of work,cosmetic and kitchen..Rent on those £450 a month.Even with LHA cuts minimum £400.

This is right through the north east.Yet they still are not moving.The houses above entry level arent moving and they will fall next.Only 0.5% rates are stopping it.

I can only comment on the north east,but im seeing a huge buying chance coming.In fact iv just sold all my aus $/stocks and Asian equities and getting back into £.Those houses have fallen 80% in sterling terms compared to when i went into Asian currency/equity.

In simple terms i sold a house at the top that has fallen 50%,bought aus stocks that have risen (with currency) 122% and will be buying 4 or 5 houses soon.

Good luck to all HPCers,its nearly time,IMO within 6 months we will see the tipping time,a bloodbath and then its time to move.

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Similar,decent area,needs a bit of work,cosmetic and kitchen..Rent on those £450 a month.Even with LHA cuts minimum £400.

explain

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Beware buying off the banks blind

Why would anyone buy blind?

It's an absolutely stupid thing to do in any market. It's not as if these places are 5K each. Even at 50% off, 128K is still a lot of money requiring a mortgage (for most people).

tim

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Why would anyone buy blind? It's an absolutely stupid thing to do in any market. It's not as if these places are 5K each. Even at 50% off, 128K is still a lot of money requiring a mortgage (for most people).

tim

believe me they do on cash auction sites , even if you see a place that looks a good buy on the bank website my advice is to view it no matter how cheap it is, we have one in our block that has the door batterd in by the guardia during a kitchin fire the guy who owned it has had the water turned off for 2 years due to non payment you couldnt imagine the smell, it went for 47k around 30k under value around a year ago. The purchaser left after one week and hasnt been seen since.

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believe me they do on cash auction sites , even if you see a place that looks a good buy on the bank website my advice is to view it no matter how cheap it is, we have one in our block that has the door batterd in by the guardia during a kitchin fire the guy who owned it has had the water turned off for 2 years due to non payment you couldnt imagine the smell, it went for 47k around 30k under value around a year ago. The purchaser left after one week and hasnt been seen since.

yeah, like all those Scottish cottages people bought,only to find the tenant had 100% right to stay there...whomever owned the place.

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Generally speaking I consider celebrity endorsement to be a great sign that its the top of the market.  In future, if you ever see a celebrity being used to endorse anything run a mile.  If the product can't be sold by a boring person in a suit or indeed sell itself, then it probably isn't worth having.

http://www.youtube.com/watch?v=vfvuwieuTxk

Michael Owen was, like, totally flying that helicopter. Not.

And I can't decide whose delivery was worse, his or the Spanish guy in the Polaris commercial. :lol:

Christ, that was lame.

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  • 245 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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