Jump to content
House Price Crash Forum
spanman

Game Over In Spain?

Recommended Posts

Took a drive round a new build site last night after work. The development was completed and handed over about six months ago. A few for sale/rent signs but the thing that really struck me was that at least 50% of them were unoccupied and as the builder left them. Building continues at a frenetic pace around here (Cadiz area) with many thousands of properties under construction which, I guess, will end up with a similar level of occupancy. This must surely signal an end to the madness of HPI in Spain.

Other encouraging signs of a return to sanity;

1. In the last week 4 estate agents in one street have gone bust.

2. Spanish government clamping down on tax evasion (a normal part of property transactions)

3. Interest rates finally beginning to move in the right direction.

Anyone else seen signs of a correction underway?

Share this post


Link to post
Share on other sites

can't comment about spain, but exactly the same thing going on here in cyprus

rows and rows of unsold houses in new developments - some sitting there unsold for more than a year.

big blocks of newly built flats, empty except the huge 'for rent' banners draped across the verandas

havn't seen any estate agents going bust, but i'm sure it's coming

english expats hotfooting it out of here in droves (5 families a week according to one estimate)

going to get very ugly over here as well I think

problem is that they have never experienced a HPC out here before as cyprus was a closed socialist-type society since 1960. therefore nobody can conceive of one ever happening

the locals look at me like i'm mad whenever i mention the possibility of prices ever dropping

im feeling very lonely :(

Share this post


Link to post
Share on other sites

the locals look at me like i'm mad whenever i mention the possibility of prices ever dropping

im feeling very lonely :(

Mainly Brits where I work but I get the same reaction even though some of them have experienced it before in UK.

Likewise lonely

Share this post


Link to post
Share on other sites

If I use the following simple formula it will tell you why property will come crashing down.

More than 3 million homes have been build along the costas. To get your money you need to rent these homes for 20 weeks a year. Which means 60 million weeks in total. On average there 2.5 people renting. So you need to rent to 150 million visitors assuming they stay a week. Only 52 million people visit Spain every year and they do not all stay in private accomodation allong the costas, there are lots of hotels available too. Lets say only 26 million stay in privaye accomodation than another 124 million visitors are needed to make your holiday investment work.

And remember lots are still being build on the costas and in other countries. Do these same numbers for Dubai and you will notice it won't work in a cuople of years.

:lol:

My parents have had a loss making home in switzerland for 20 years as it was harder and harder to fill every year. In the end they rented out only for 8-9 weeks a year. You end up spending all your holiday in one place just to justify your buy.

Why have something for yourself when renting it will cost only a fraction.

I can not wait to rent something realy cheap in the sun. And every year try somewhere else.

:lol:

Share this post


Link to post
Share on other sites

If I use the following simple formula it will tell you why property will come crashing down.

More than 3 million homes have been build along the costas. To get your money you need to rent these homes for 20 weeks a year. Which means 60 million weeks in total. On average there 2.5 people renting. So you need to rent to 150 million visitors assuming they stay a week. Only 52 million people visit Spain every year and they do not all stay in private accomodation allong the costas, there are lots of hotels available too. Lets say only 26 million stay in privaye accomodation than another 124 million visitors are needed to make your holiday investment work.

And remember lots are still being build on the costas and in other countries. Do these same numbers for Dubai and you will notice it won't work in a cuople of years.

:lol:

My parents have had a loss making home in switzerland for 20 years as it was harder and harder to fill every year. In the end they rented out only for 8-9 weeks a year. You end up spending all your holiday in one place just to justify your buy.

Why have something for yourself when renting it will cost only a fraction.

I can not wait to rent something realy cheap in the sun. And every year try somewhere else.

:lol:

You are assuming 3 million homes have been built for the rental market - this isn't the case in Spain. Many of those homes are lived in all year round. You are also assuming that only foreign tourists holiday on the costas. Again not the case. You are also assuming that "to get your money back" you need to rent out. Given the rises in property prices along the Costas over the last five years plenty of people have bought and sold and made money doing so.

My own take on Spain is that the Costas are being overdeveloped and that overdevelopment will ultimately be its downfall. Why holiday in a concrete jungle when you can go to Florida, Croatia, Dubia, Bulgaria, South Africa . . .

Building continues at an astonishing pace, although increasingly - as with the Polaris World flagship site - projects are being abandoned because of environmental concerns. Basically lack of water. Murcia and Almeria in particular.

The main problem isn't so much with rental income, but with over capacity. Reselling is a real problem today not least because of competition from unsold new builds, capital gains tax clampdowns and less foreigners being able to afford the rising prices (for example the French have all but disappeared from the market).

One other thing about "rising prices" in Spain. If you buy a house for €200,000, the costs involved in doing so will be roughly €13-15,000 on top. So you could end up paying €215,000 for a €200,000 house. When you come to sell it, you will need to set a price of at least €215,000 just to break even (and that doesn't include taxes, commissions, etc). So prices HAVE to rise by considerable amounts just for people to break even. It is not the investment of a lifetime often portrayed by agents.

And when the market falters - like it is doing now - a lot of people are having to sell at a loss or wait months for a buyer.

Share this post


Link to post
Share on other sites

I'm trying to keep up with what's going on in the Spanish market away from the coasts. My principle interest is Granada province where I spent several months living last year. The market was still shooting up in Granada last year despite cooling off on the Costa del Sol, but I spoke to an agent yesterday who said things have gone very quiet since the start of 2006. I asked if this was due to the UK market cooling or the prospect of higher interest rates in Europe, but he just thought it was due to Spain no longer being cheap and there being really no real bargins left. The bargin hunters are now off to Eastern Europe. Does anyone else have an opinion about what is happening with the market in rural Spain or Spanish cities away from the coasts??? Love to hear it.

Also whatever happened to Drakan - he always had so much to say about the Spanish market but doesn't appear to be posting anymore - come back!!!

Edited by libélula

Share this post


Link to post
Share on other sites

The beginning of the end for Spain's real estate bubble?Interest rate rises and falling consumer spending will prompt a fall in housing prices

El Pais Spain | I. DE LA VEGA

One of the key factors that has driven house prices up over the last decade is buyers' conviction that prices cannot fall. Evidence suggests otherwise. In some areas of Japan prices have been falling since 1992, and have now reached half their 1991 value. Prices in London fell by up to 45 percent between 1988 and 1995. Paris experienced a similar readjustment between 1991 and 1998. Bernardos says that in Spain, between 1991 and 1997, prices fell in real terms by an accumulated 20 percent. A hike in interest rates will hit consumer spending, and squeeze jobs. "These trends won't be immediately obvious. Interest rates will hit 3.5 percent this year, but the impact of this rise won't be felt for six months. Prices could fall by five percent in the second half of 2007, by six percent in 2008, and by seven percent in 2009."

Bernardos also points out that during Spain's previous property boom, between 1986 and 1991, there was no speculation. Today, he says, price adjustments will only come when there is an economic downturn and speculators turn their attention to other sectors.

El Pais

Share this post


Link to post
Share on other sites

The Spanish bubble bust continues, vendors cutting prices, properties on the market for two years plus and no new series of A Place in The Sun, apologising for the pi5s poor advice they gave to the property investment virgins.

Desprate Property Owners

Im investing in Saidia Morocco. One of Spains largest developers 'Fadesa' own the rights to the entire sight.

A chap from Fadesa in London (which also sells a lot of property on its Spannish developments) told me to forget Spain in terms of investment as its all overdone.

Share this post


Link to post
Share on other sites

A chap from Fadesa in London (which also sells a lot of property on its Spannish developments) told me to forget Spain in terms of investment as its all overdone.

Something of an understatement I think.

Share this post


Link to post
Share on other sites

stupid brits: look at glossy brochure believe hype - buy. 2 years later stuck with an asset thats loosing tons of money, and they can't sell it because anyone who actually wanted a home in spain (to live there) has actually already bought it - and the spanish don't want your home thats for sure - so you're left with a home that might rent 2 weeks in a year due to oversupply, and generic business models.

Edited by George

Share this post


Link to post
Share on other sites

I´m sorry, but i registered purley on this post......

I live, work and breath property in Spain (Costa del Sol).....if ANYBODY is´nt making good returns its purley because you dont know what you are doing..

case 1, €93,000 profit for one of my clients in ONE year, all properties resold within the 18 months period I stipulate for all my clients

case 2, NOT one of my clients has EVER made a lose...EVER.

If you or someone you know is having a quiet period then sorry but They / You need to market, advertise, telemarket a little better than They / You are or are not doing.

I know this is just my words, but I have listened to just your words, so its just a question of who do you/we believe..............and to be honest none of you can make the slightest bit of difference to my life....but I can make the difference in yours.

Best of luck in your investments.

Allme

Edited by Allme

Share this post


Link to post
Share on other sites

I´m sorry, but i registered purley on this post......

I live, work and breath property in Spain (Costa del Sol).....if ANYBODY is´nt making good returns its purley because you dont know what you are doing..

case 1, €93,000 profit for one of my clients in ONE year, all properties resold within the 18 months period I stipulate for all my clients

case 2, NOT one of my clients has EVER made a lose...EVER.

If you or someone you know is having a quiet period then sorry but They / You need to market, advertise, telemarket a little better than They / You are or are not doing.

I know this is just my words, but I have listened to just your words, so its just a question of who do you/we believe..............and to be honest none of you can make the slightest bit of difference to my life....but I can make the difference in yours.

Best of luck in your investments.

Allme

blah blah blah - utterly ridiculous - try and sell our anchors with your "telemarketing" - even if you could, out of integrity I wouldn't saddle some poor unsuspecting lump with a concrete lemon; Spain is history, way too much cement and way too little demand.

Yours

Share this post


Link to post
Share on other sites

Allme - I can only assume you are in your 20s with little long term experience of the property market in Spain. Were you selling property during the last crash or have you just been riding the current boom during which time - let's be honest - it was harder to lose money than make it?

If you are telling us Spanish property is a surefire investment for the next five years, mucho suerte mi amigo.

And a guaranteed sale within 18 months is hardly something to boast about.

Share this post


Link to post
Share on other sites

Allme - I can only assume you are in your 20s with little long term experience of the property market in Spain. Were you selling property during the last crash or have you just been riding the current boom during which time - let's be honest - it was harder to lose money than make it?

If you are telling us Spanish property is a surefire investment for the next five years, mucho suerte mi amigo.

And a guaranteed sale within 18 months is hardly something to boast about.

Cocacolalight (living in spain i take it, or have lived)...firstly thank you for a genuine reply, first one on this board i have´nt seen instantley flaming someone.....

I am 34 years old (born 16th sept 1971), and no i have´nt been riding the old wave, i have been hear for 3 years, and YES i do make a good income.............Is there anything like a surefire investment....NO, i most definatley agree back in the old days...whenever they were....it was much harder to lose money on an investment.....and Cat (whatever) blah blah blah - utterly ridiculous..please grow up.....

I am having my say, which correct me if i am wrong is what this board is about....i have listened to most of you and have taken into account what you have said, so at least have the honour to do me the same.....

Guarenteed sales within 18 months i think is something to boast about, purely because of the returns on investment MY investors get.

Again i am not here to sell Spain, or myself but i am entitled to my facts/history whatever you wish to call it.

Anyway i´m finished with my input on this post, and yes some bright spark will say its about time or hoooray so be it.

I wish you all the best with your investment in whatever shape they take...

Lets be honest, any investment should take alot of hard work, knowledge, researching etc to be effective.

Good luck

Allme

Share this post


Link to post
Share on other sites

I appreciate your honesty Allme and you may well be proof that if you invest wisely you can make money when property markets go up, go down or go sideways. Three years however is not a long time to be in the market - especially considering the growth in the last three years.

I think Spain has many problems to face in the coming year or so and property prices are almost certainly going to be a casualty.

Edited by cocacolalight

Share this post


Link to post
Share on other sites

I´m sorry, but i registered purley on this post......

I live, work and breath property in Spain (Costa del Sol).....if ANYBODY is´nt making good returns its purley because you dont know what you are doing..

case 1, €93,000 profit for one of my clients in ONE year, all properties resold within the 18 months period I stipulate for all my clients

case 2, NOT one of my clients has EVER made a lose...EVER.

If you or someone you know is having a quiet period then sorry but They / You need to market, advertise, telemarket a little better than They / You are or are not doing.

I know this is just my words, but I have listened to just your words, so its just a question of who do you/we believe..............and to be honest none of you can make the slightest bit of difference to my life....but I can make the difference in yours.

Best of luck in your investments.

Allme

(Allme @ Jun 26 2006, 09:57 AM)

Oh JEEEZZZ i have never heard so much rubbish in my whole life, the bubble has burst, i cant sell................ahhhhhh

Spain is still very muh alive and still kicking very hard, i´m sorry but if YOU are having problems then YOU have´nt done enough home work..

Yes i work and live in spain, all of our clients have and are still making profits, these people are real investors NOT wanna be´s.

This really makes my blood boil.

You have to buy right (which we do), you have to make sure all regulations are being covered (which we do), you have to have guarantees (which we do), your investment is as safe as the amount of home work you put in.

We are still getting a very conservative 50% returns on your investment over a 2 year period...thats 25% per year, where in the hell do you get that..........................please someone tell me.

Cheers

Daz

I happen to be a spanish conveyancing lawyer and I all your emails are just rubbish.

You stipulate for all your clients an 18 month time period to sell ? wahahahahahah :lol: Buddy it's not you who decides this it's called the Law of Demand and Supply that fixes the market price of every asset, not yourself. And currently the huge oversupply of offplans have driven down their prices throughout Spain.

It's spelled "loss" not "lose".

I've bought myself in offplans and made money but since 2003 any person whose bought has actually lost money.

You claim that a 25% yield per annum is "very conservative" ( :blink: ) and sustainable in Spain currently ? wahahahahaha :lol: ¡ Venga ya !

You are right we come from different planets, mine is Spain I have no idea which one is yours.

Your claims are impossible and irresponsible because besides being a lawyer I happen to invest in property. Please quit your REA gibberish.

Spain is an excellent place to invest but sadly this is not the right moment. I can guarantee with 100% accuracy that anyone who intends to buy property there now will lose money If they are in it for the short term. Properties are taking 30 months to sale on average in the coastal areas and those are official figures which serious REAS don't argue against. Long gone are the days where it took less than a month for a property to sale. That happened 3 years ago certainly, not now. And the proof of this is the countless number of real estate agencies which have gone broke in the last couple of years and litter the spanish streets. Are you also going to rebut this ? Any person whose traveled to Spain within the last year can easily confirm this.

No one can give you a 25% yield per annum it is impossible, either in Spain or anywhere else currently.

Edited by Drakan

Share this post


Link to post
Share on other sites

I happen to be a spanish conveyancing lawyer and I all your emails are just rubbish.

You stipulate for all your clients an 18 month time period to sell ? wahahahahahah :lol: Buddy it's not you who decides this it's called the Law of Demand and Supply that fixes the market price of every asset, not yourself. And currently the huge oversupply of offplans have driven down their prices throughout Spain.

It's spelled "loss" not "lose".

I've bought myself in offplans and made money but since 2003 any person whose bought has actually lost money.

You claim that a 25% yield per annum is "very conservative" ( :blink: ) and sustainable in Spain currently ? wahahahahaha :lol: ¡ Venga ya !

You are right we come from different planets, mine is Spain I have no idea which one is yours.

Your claims are impossible and irresponsible because besides being a lawyer I happen to invest in property. Please quit your REA gibberish.

Spain is an excellent place to invest but sadly this is not the right moment. I can guarantee with 100% accuracy that anyone who intends to buy property there now will lose money If they are in it for the short term. Properties are taking 30 months to sale on average in the coastal areas and those are official figures which serious REAS don't argue against. Long gone are the days where it took less than a month for a property to sale. That happened 3 years ago certainly, not now. And the proof of this is the countless number of real estate agencies which have gone broke in the last couple of years and litter the spanish streets. Are you also going to rebut this ? Any person whose traveled to Spain within the last year can easily confirm this.

No one can give you a 25% yield per annum it is impossible, either in Spain or anywhere else currently.

Drakan

Thank you for the spelling correction, loss and lose have always been a problem for me, but dyslexia is a very difficult thing to deal with.

Please feel free to correct all my spelling in future.

I fell also that i have covered your response or at least replied to it in another post.

Cheers mate

Share this post


Link to post
Share on other sites

I fell also that i have covered your response or at least replied to it in another post.

No you haven't.

Any news on the Spanish government plans to place asylum centres on the costas? ;)

btp

Share this post


Link to post
Share on other sites

No you haven't.

Any news on the Spanish government plans to place asylum centres on the costas? ;)

btp

Why´s that mate....getting fed up sucking the life out of the old UK, you need a room over here....

I´m sure someone like you will be ok whereever they decide to sponge

Pathetic, and is that the level of your response...you think a sarcastic remark makes any difference except in your childish mind........jeez some of you guys on here get off with stupid remarks.......

Not interested in this post or board anymore (hooraa i hear you say already), just keep watching the press guys, girls and kiddies, and i´ll be back on in a few years with a big FAT i told you sooo.

ta ta

Share this post


Link to post
Share on other sites

Why´s that mate....getting fed up sucking the life out of the old UK, you need a room over here....

I´m sure someone like you will be ok whereever they decide to sponge

Pathetic, and is that the level of your response...you think a sarcastic remark makes any difference except in your childish mind........jeez some of you guys on here get off with stupid remarks.......

Not interested in this post or board anymore (hooraa i hear you say already), just keep watching the press guys, girls and kiddies, and i´ll be back on in a few years with a big FAT i told you sooo.

ta ta

Ummmmm, I live and work in Spain.

Try again with a better insult......

btp

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.