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John The Pessimist

Spanish Property Must Fall Further

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Interesting piece from the Torygraph. There are statements about policy propping up houseprices, mortgage forbearance etc. They could almost be discussing the UK.....

Apart from the 30% falls already that is. The final paragraph of the piece is clearly designed to reassure those readers that saw similarities between the 2 countries.

http://www.telegraph.co.uk/finance/10022502/Spanish-house-prices-need-to-fall-further-Goldman-warns.html

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Interesting piece from the Torygraph. There are statements about policy propping up houseprices, mortgage forbearance etc. They could almost be discussing the UK.....

Apart from the 30% falls already that is. The final paragraph of the piece is clearly designed to reassure those readers that saw similarities between the 2 countries.

http://www.telegraph.co.uk/finance/10022502/Spanish-house-prices-need-to-fall-further-Goldman-warns.html

And quite right too. It stands to reason that, in twenty years time, UK house prices will be ten or twenty times higher than anywhere else in the world.

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My Auntie and Uncle have lost about £150,000 "investing" in an apartment in Spain, bought in 2007. I could have told them it would happen although I wouldn't have done because they just wouldn't have listened because I'm "just a lorry driver".

If a stuffed suit presenting "A Place in the Sun" said it was a good idea then that would be that and I may just as well have sat a cabbage on the table and try to explain to it the atomic properties of Lithium.

Still, they deserve it, they're the most terrible smug and holier-than-thou God-botherers and if I tried to explain to them that the world wasn't "created in six days and on the seventh day He rested" then they wouldn't listen to that either, even if I brought along an Albert Hall full of physicists, biologists and chemists to support my thesis.

Faith, see? :lol:

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I could have told them it would happen although I wouldn't have done because they just wouldn't have listened because I'm "just a lorry driver".

Yes, 'any lorry driver coulda told ya'.

Pre-boom, Spain and Ireland already had the two highest home ownership in rates in Europe . . . I believe 80% or more. Who ever was going to live in all these places?

It makes you wonder why we bother with Governments. It is their job to regulate the economy. Reckless lending is only a part of it. Think of the money that could have been directed into diversifying the economy and possibly creating some sustainable jobs. Some 6m migrants flocked to Spain to build all this stuff no one wants. How is it possible no one noticed?

I imagine, as in Ireland, quite a lot of places will have to be demolished now.

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Yes, 'any lorry driver coulda told ya'.

Pre-boom, Spain and Ireland already had the two highest home ownership in rates in Europe . . . I believe 80% or more. Who ever was going to live in all these places?

It makes you wonder why we bother with Governments. It is their job to regulate the economy. Reckless lending is only a part of it. Think of the money that could have been directed into diversifying the economy and possibly creating some sustainable jobs. Some 6m migrants flocked to Spain to build all this stuff no one wants. How is it possible no one noticed?

I imagine, as in Ireland, quite a lot of places will have to be demolished now.

Don't worry the U.K is doing one better. Our glorious leaders have noticed and are still doing it anyway.

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30% falls? thats Spanish government fantasy. Its a least 40-42% according to Tinsa., although 50-60% is suggested as a true fall from peak.

Tinsa is about the only reliable source of figures and they suffer a lag of a year. The Spanish government is in denial becuase it makes their banking system even more catastrophic than suggested.

http://www.tinsa.es/n-pages/np-files/1/down/IMIE/2013/03_Ficha_Imie_Marzo_2013.pdf

http://www.tinsa.es/n-pages/np-files/1/down/notas_de_prensa/2013/03_Nota_de_prensa_Imie_Marzo_2013.pdf

Buying in Spain at any price is probably a mistake, they are implementing world wide wealth tax. The Spanish make estimates of property values so they can tax you as they see fit. If they pull the same trick on your UK assets it wouldn't be a surprise. This is on top of any other taxes and fees the Spanish can apply to non-voting foreign property owners.

Edited by Peter Hun

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Spanish property prices in the south (Andalucia) have dropped at least 60% already, and if you want to be certain of a sale, you need to go to 70% off 2006 prices. Decent big 5/6 bed villas, set in an acre were about £1m Eur in 2006, now at 350K EUR. Compared to rental value, the target price is sub 200K EUR.

Edited by rxe

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Decent big 5/6 bed villas, set in an acre were about £1m Eur in 2006, now at 350K EUR. Compared to rental value, the target price is sub 200K EUR.

But it's all kinda irrelevant if you don't have a job and are living in a squat.

Spain is just crazy. So many homeless people and so many unoccupied homes. How do they square that?

Really surprised that Rajoy guy hasn't ended up on a meat hook yet.

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Further falls in property prices along with a fall in the cost of living can only be good for Spain its youth and its future economy as long as the government don't snatch back any extra surplus savings in taxes, their reckless banks will have to take a bigger hit........this can only encourage prudent investment....once you start from a lower base, the only way then is up.....because of the history and the language the emerging countries of South America can help to boast their exports and future business potential. ;)

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It's obvious Spain ought to screw its banks - make the banks implement huge writedowns on the property loans - and thus accept a 70%+ fall in property prices - and get houses selling at much lower prices. This would help with homelessness - but without their own currency, they couldn't rescue the banks. Let them go.

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It's obvious Spain ought to screw its banks

Unfortunately, people are getting screwed instead. The repo laws are stacked in favour of the banks, hence the rise of the Platform for Mortgage Victims protest group.

The Spanish mortgage system is different from the UK in several respects: a home owner can find their property reposessed easily, if they fall into just one month's arrears, and a bank is entitled to be repaid the full loan amount at that point – even if the borrower has already paid back 50% of the original loan. If a bank repossesses and sells a property on, it is allowed to keep the entire sum raised at sale even if the loan is cleared and there is an excess.

link

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Unfortunately, people are getting screwed instead.

Those rules seem ok to me. Wish we had such rules here. You'd have thought it would make many people cautious to the levels of mortgage debt they took on. For sensible people they'd put 6months+ of mortgage surplus into their current accounts on direct debit for the mortgage, just in case they forgot to switch money over from savings account one month. And prices should be held much lower with such strong conditions against default on mortgages.

Can't see why those who felt no need to be cautious and felt entitled to over-borrow and push up housing costs for non-owners should get special treatment if they can't pay their mortgages.

Your link; I think it suggests portfolio landlords in the UK could or should incur some more of the costs of defaulting tenants and not gain immediate possession. In terms of repossessions, there's not nearly enough here in the UK. We should be protesting for more repossessions, because the forbearance and re-inflation we've got is the opposite of what's required for HPC.

Does Spain's housing crisis offer us a glimpse of the future?

Britons have yet to start protesting with any real force at government cuts and housing repossessions. But in terms of problems – and of possible solutions – Spain provides an interesting roadmap for Britain's housing future.

Last case I saw was a BBC news video (15th Nov 2012) about a woman who was upset about possible repossession, a cleaner, who couldn't afford to pay her €1300 a month mortgage, on some flat which didn't look like it was in the most upmarket of areas.

Obviously she was smart enough to sign up the the mortgage, and in the BBC's language, she's a 'ordinary Spanish person' awww.. who doesn't deserve to lose the home she can't afford a big mortgage on, with 2 or 3 kids to feed as well as a cleaner.

I guess it's forbidden to consider she doesn't have a strong claim on it, seeing as she'd not paying her mortgage, and it could be sold to either older savers who didn't want to overpay during the boom and who got priced out by entitled cleaners, or young smart Spanish couples with a future ahead of them, at an affordable price and with a lower mortgage. No wonder the other case shows a graduate guy hoping to find good pay in a job in Germany. He probably is getting hit both on rental costs and totally dejected about being able to afford to buy in any commercial/business area of Spain, given prices are too high, and so much anti-repossession sympathy for those who can't pay their mortgages.

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No wonder the other case shows a graduate guy hoping to find good pay in a job in Germany. He probably is getting hit both on rental costs and totally dejected about being able to afford to buy in any commercial/business area of Spain, given prices are too high, and so much anti-repossession sympathy for those who can't pay their mortgages.

Correction. That case was covered in this BBC video. http://www.bbc.co.uk...europe-22289403

24 year old unemployed Spanish graduate in Chemical Engineering. VIs in Spain and Madrid, as well as quite a few stupid younger people who don't realise they're blocking their own future opportunities, against the austerity. The plight of cleaners unable to afford £1300pm mortgage payments, apparently the pensioners who are suffering(?).. and every other self-made victim before young people who need lower housing costs, and who are the best hope of helping Spain to recover in the future.

More repossessions, sold of for lower prices, could also generate improved employment as new owners also have some money left over to spend in the economy. The effort to maintain things on behalf of big mortgage debtors and so older owners don't see the value of their homes fall in value, is a drag on the economy, imo.

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As far as I know, rent levels are at a low level in Spain, but if anything are rising slightly. Many people do say house prices may fall further, but it depends on area.

If you are looking to pick up a bargain, in certain coastal areas you may find yourself up against Russian buyers... The general advice, to rent in an area before buying, seems to be the best one to follow. Find out the reality of the area, rather than narratives persued by media and vested interests.

Russians buying up Spanish properties

Clients from Russia have overtaken the British in the foreign home-buyer ranking. Half of the 7,000 residences sold to non-Spaniards in Alicante province last year went to Russian families, a market that represented less than five percent of the total just four years ago.
Edited by Trampa501

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As far as I know, rent levels are at a low level in Spain, but if anything are rising slightly. Many people do say house prices may fall further, but it depends on area.

If you are looking to pick up a bargain, in certain coastal areas you may find yourself up against Russian buyers... The general advice, to rent in an area before buying, seems to be the best one to follow. Find out the reality of the area, rather than narratives persued by media and vested interests.

Russians buying up Spanish properties

Yep, parts of Spain prices are rising

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Yep, parts of Spain prices are rising

Therefore it is either.....bargain basement or money no object luxury.......same as it has ever been.

The squeezed middle.....who will not be sucked into a promise that will never materialise. ;)

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As far as I know, rent levels are at a low level in Spain, but if anything are rising slightly.

Rent per M2 just went down to 7.2 euro

It's obvious Spain ought to screw its banks - make the banks implement huge writedowns on the property loans - and thus accept a 70%+ fall in property prices -

Banks write down 60% on repossessions last year,

http://www.economist.com/news/europe/21576717-after-house-price-crash-come-repossessionsand-angry-response-mortgaged-hilt

In reality 60% falls in prices are required to sell and even then it will need more. Spain will tax you to death if you buy, its not worth it at any price (as an investment) as you will be taxed on an imaginary valuation not what you paid.

Edited by Peter Hun

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Lots of ladies on dating sites now who write in their profiles that they have recently returned to the UK after years living and working in Spain. No doubt there are just as many men doing the same.

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There's been a huge percentage increase in properties bought by Russians and Norwegians. In fact, on the Costa Blana, Russians have displaced Brits as the biggest buyers (in terms of money spent, but not number of properties) Russians

This may be why Sabadell has recently increased prices of its loft apartments in Valencia (as they're selling well)

Article in Spanish

There are obviously bargains still to be had, but there are other places where perhaps the base level has been passed.

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Reuters

Insight: Two things missing on Spain's route to recovery

Sun May 26, 2013

The complaints voiced loudly across southern Europe are not echoed in Madrid: Spain's conservative government has no time for moans about unfeeling German domination of the euro zone or complaints about Berlin's supposed lack of understanding for the social problems austerity policies have unleashed.
When the property boom ended, some eight million jobs disappeared with it. But many immigrants and some Spaniards are now leaving - Spain lost one percent of its entire population last year. "The Spanish population will probably fall by two million in the next four to five years," Fernandez said. "Of the six million unemployed, two million are probably foreigners and they are likely to go."
Spain's exports have risen from a trough of 23 percent of GDP in 2009 to 33 percent this year. Traditional export staples such as fruit and vegetables and cars have been joined by chemicals, telecoms equipment and technology. "When I board a plane to Chile I see the plane full of Spanish businessmen flying to sell products I never knew existed to markets which none of us had ever thought of," said one Spanish executive.

http://www.reuters.c...E94P06Q20130526

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Reuters

Insight: Two things missing on Spain's route to recovery

Sun May 26, 2013

http://www.reuters.c...E94P06Q20130526

The article does contradict itself when it states that Spain has only one salvation - exports. They are also attracting inward investment from companies who have noticed Spain's new competitiveness. And the article actually states it later in the piece

Carmakers - traditionally among the quickest to react to changes in relative labor costs - have done so. Six of the 11 foreign carmakers present in Spain plan new investments, including France's Renault and Volkswagen.

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Those rules seem ok to me. Wish we had such rules here. You'd have thought it would make many people cautious to the levels of mortgage debt they took on.

I wonder if such rules make banks less cautious though? Somehow the system has to punish bad decisions on both sides.

Last case I saw was about a woman who was upset about possible repossession, a cleaner, who couldn't afford to pay her €1300 a month mortgage, on some flat which didn't look like it was in the most upmarket of areas.

Unfortunately that person has the same number of votes as someone sensible.

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The latest numbers from the Spanish statistics institute seem to imply more declines in house prices for Spain.

The mortgage market

We might perhaps have some hopes of a beginning of a turn for the better here as the Bank of Spain tells us that its measure of mortgage rates fell from 3.74% in March 2012 to 3.22% in March of this year. Although one may be troubled by the fact that they have risen since the 2.93% of December.

However volumes and prices show no sign of responding.

The number of mortgages constituted on dwellings stands at 16,270, 34.1% lower than that registered in March 2012

In the case of mortgages constituted on dwellings, the average amount was 96,676 euros, 6.7% less than in March 2012 and 6.7% lower than in February 2013.

The value of the mortgages constituted on urban properties was almost 2,866 million euros indicating an annual decrease of 34.2%, as compared to March 2012. On dwellings, the capital loaned almost reached 1,573 million euros, 38.5% less.

Such numbers are rather like those produced by Greece where the numbers are so weak that you start to wonder if a recovery on that basis alone is due, but it never seems to come. Instead we just get further falls and Spain looks headed to be in the textbooks for one of the most extreme housing booms and then busts ever.

http://www.mindfulmoney.co.uk/wp/shaun-richards/spain-and-its-economy-needs-a-change-of-tack-rather-than-a-deficit-plan-hiatus/

Not much sign of hope there.

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  • 243 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% +
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      • Even
      • up 2.5%
      • up 5%



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