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Conversation with a friend yesterday was rather contradictory.He lives a bit inland from Valentia.He says that the local papers are still reporting substancial price increases in the area but NOTHING is shifting.

His friend,an EA,nearby has nor sold one property since Christmas and a new build development in his village would appear to have been abandoned 25% finished.

The villa next to him,very nice 4 bedroom with lots of land has been up for sale @190,000 euro for ages.In fact last September the owner offered it to us for 170,000.

Just very interested to know the real story!

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Conversation with a friend yesterday was rather contradictory.He lives a bit inland from Valentia.He says that the local papers are still reporting substancial price increases in the area but NOTHING is shifting.

His friend,an EA,nearby has nor sold one property since Christmas and a new build development in his village would appear to have been abandoned 25% finished.

The villa next to him,very nice 4 bedroom with lots of land has been up for sale @190,000 euro for ages.In fact last September the owner offered it to us for 170,000.

Just very interested to know the real story!

I slod my place in Spain last year - the market was flat. Lots of properties on sale but not shifting unless the price was right.

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I am based in Madrid and read the Spanish press, websites, etc on a daily basis. Given the fact that the Spanish economy basically runs on construction/real estate and tourism there is a huge amount of disinformation regarding the real state of the real estate market. There are no accurate public statistics so it is very easy to manipulate the information coming out.

That being said, the signals have finally gotten so strong that the mainstream press has begun to report on falling prices in certain areas. The coastal regions where Brits have invested like mad are considered to be some of the leading candidates for significant falls. The Malaga newspaper Diario Sur has been publishing articles on the problems sellers are having- indicating the need to make price drops of 20-30k for places to sell.

Areas around Madrid and other cities where there has been massive levels of speculation are also seeing reduced volumes and I would suspect also falling prices, but again it's very difficult to tell...

A family member has had a place on the market since November. I have tried to convince him to lower the price and get out before things get ugly but unfortunately he pays too much attention to the articles that say that prices are still going up. Hopefully the more recent articles will wake him up a bit... as he really does need to sell.

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I took the family to Malaga area last week and spent one afternoon walking around the streets of Nerja where there appeared to be dozens of agents selling properties aimed at Brits. I got talking to the (English) manager of one agency and told him that I thought everything looked massively overpriced. His response was to point at a window full of properties and say to me 'if you're a serious buyer I can get you anywhere between 20k and 50k off any of these... sellers are prepared to accept offers...'

Even if they did drop 20% I'd still say it all still looks massively overpriced (especially when you take local earnings in to account).

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I took the family to Malaga area last week and spent one afternoon walking around the streets of Nerja where there appeared to be dozens of agents selling properties aimed at Brits. I got talking to the (English) manager of one agency and told him that I thought everything looked massively overpriced. His response was to point at a window full of properties and say to me 'if you're a serious buyer I can get you anywhere between 20k and 50k off any of these... sellers are prepared to accept offers...'

Even if they did drop 20% I'd still say it all still looks massively overpriced (especially when you take local earnings in to account).

Was he offering to take this percentage of new build stuff or establised property or all?

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Was he offering to take this percentage of new build stuff or establised property or all?

The window he pointed to was full of existing property - lots of those horrible 'lego' appartments plus villas and little cottages (forget the Spanish term) up in the hills. It all looked bl**dy expensive to me - 2 bed appartments on the beach were around the £200k mark. £300k got you a 3 bed villa nowhere special...

I agree - its got a long way to drop.

If there is such a thing as a Spanish Rightmove it would make interesting reading I'm sure!

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The Spanish term for a big estate villa in the hills/country is Hacienda. The little one’s are Finca’s. “ 2 bed apartments on the beach soon to be £50 to £65K 3 bed detached villas no where special soon t be £80 to £90k if anyone will buy them.

The scary thing is we all know friends and relatives that own these places.

Pablo Silver or Lead?

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The Spanish term for a big estate villa in the hills/country is Hacienda. The little one’s are Finca’s. “ 2 bed apartments on the beach soon to be £50 to £65K 3 bed detached villas no where special soon t be £80 to £90k if anyone will buy them.

The scary thing is we all know friends and relatives that own these places.

Pablo Silver or Lead?

I live in a costal town nr Tarragona with hardly any brits (Spanish main reidency - high quality mature urbanization) and am quite friendly with some local Spanish Estate agents and lawyers, they are having a really tough time, the Spanish aren't buying in any significant numbers and the number of distressed owners / investors are rising significantly. I make my living as a professional property dealer (UK only) and am so convinced that the Spanish market will fall like a stone that I have not bothered looking at properties I have been offered in Spain (through lawyers not agents) at 25-30% Below market value.

The problem is not isolated to holiday home areas as we have quite high employement in Catalonia and a large local middle/ business class - The problem is that 180m2 semi detatched houses have risen from €220k to €480k in a little over 2 years.

The irony for me is that I actually buy and sell far nicer properties in the U.K. at much lower prices than I can buy anything similar for in Spain - Now that is just wrong way around economics however you try and stack it.

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Here in Madrid there are new developments of literally thousands of apartments outside the city centre where I would estimate 80% of buyers have been investors. The number of properties listed for rent has doubled in just the last six months in some areas. These developments are going to crash and burn hard. Remember that 98% of mortgages in Spain are variable rate.

The economy in Madrid is doing reasonably well, but properties have just risen was out of proportion to income and people are priced out of the market. In some areas you can rent for 1/3rd of a mortgage for the same property.

When things finally pop it's going to be extremely painful...

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The window he pointed to was full of existing property - lots of those horrible 'lego' appartments plus villas and little cottages (forget the Spanish term) up in the hills. It all looked bl**dy expensive to me - 2 bed appartments on the beach were around the £200k mark. £300k got you a 3 bed villa nowhere special...

I agree - its got a long way to drop.

If there is such a thing as a Spanish Rightmove it would make interesting reading I'm sure!

I wouldn't mind buying a place, but I'd want a 10% yield, and until the extent of the over-supply has worked it's way through the market and owners are accepting market rentals, we won't know just how bad things are.

Also I feel many of the 2 bed flats will become cheap slum style holiday accom when the marketing glitz fades. These places have been put up on the cheap, and when the rust stains running down the walls from the use of cheap steel start to show, I won't want to touch one for any price.

Maybe a really nice Hacienda at the right price at some time in the future, but until then the best way to make use of this bubble will be to make use of someone else's propety at their financial expense.

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Just come back to the city from a couple of days in Llança. Lots of empty properties with For Sale or To Let signs in the windows. Plenty of EAs with plenty of new built apartments for sale, open doors, and not a botifarra inside.

btp

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The window he pointed to was full of existing property - lots of those horrible 'lego' appartments plus villas and little cottages (forget the Spanish term) up in the hills. It all looked bl**dy expensive to me - 2 bed appartments on the beach were around the £200k mark. £300k got you a 3 bed villa nowhere special...

I agree - its got a long way to drop.

If there is such a thing as a Spanish Rightmove it would make interesting reading I'm sure!

200K on the front line beach with a direct sea view seems OK, otherwise way overpriced.

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Well, looks like things are starting to move here...

- First quarter price drops on new housing in Madrid and a number of other cities, Barcelona included. In some areas the three month drop has been as much as 10%. Official statistics from the Housing Ministry.

- Reports of meltdown in Malaga and some other coastal areas, though I'm not sure that this has been captured in the stats.

- All the real estate companies are trying to IPO before things get ugly, but the most recent listing has fallen quite a bit in its first week of trading.

And interest rates have only just started to rise.

All that said, my father-in-law has just sold a thirty year old property in downtown Malaga for 180,000 euros or around 2,400 per m2. I never would have thought anybody would pay that much for an old, unrefurbished property...

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The latest from Spain...

- Third quarter showed price drops for new construction of over 25% in Granada, Ourense (Galicia) and Terruel (Cataluña) and small drops in other areas. However, the aggregate numbers still show a 9% year-on-year rise. You can see all the stats here: http://burbuja.kicks-ass.org/wiki/index.php?title=Portada

- Only 25% of new mortgages are for purchase, the rest are refinancings. A year ago it was 50/50.

- Market sentiment continues to show a greater acceptance of the fact that the bubble is bursting, but we haven't yet hit panic mode.

- For those of you that read Spanish the forum www.burbuja.info is rapidly becoming the standard for following the Spanish market. There is a thread every day with the hot news stories.

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Of course the Spanish market is falling......EA's everywhere selling at cut price............Stories from friends who have trouble selling.........Empty New Builds.......Oversupply..........yak yak yak

I have been listening to this for years. It simply isnt happening anywhere other than a few overpriced areas of the Costas.

Capital Gains for Non Residents is being halved in January 2007.........Germany coming back to the market. I predict a rise of 15-20% on most of the Costas in 2007 and further 10%-15% increases in 2008.

Grab a place now before you become outpriced B)

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Someone I know sold their place in Twickenham a couple of years back and moved to Spain to live there permanently. After a short while they decided they hated it and wanted to move back. They've been trying to sell the house for a year now and there have been no takers. They are in face desparate to sell in order to buy a place in the UK.

I've a feeling that because there is so much being built in countries outside the UK (driven mainly by the UK), there is going to be a huge over-supply of property for sale pretty soon. When the HPC happens in the UK - as I believe it inevitably will - it is going to be an even worse situation in many places out there. Apart from there being too much unsold property, many beautiful areas will have been ruined by the rush for money, driven mainly by the greedy profiteers of the 'miracle economy'.

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I agree prices in Spain are crazy. We lived in Barcelona and bought a place in the late 90's and then decided we wanted to come back to the UK. We sold our flat for three times more than we bought it for a couple of years ago. I was aware that if we had bought earlier when we first moved we would have got somewhere so much cheaper but not by much. The area we lived in was mainly Spanish but with plenty of foreigners from everywhere.

After we sold it seems that prices still seemed to go up, our neighbours flat sold for a lot more recently. The rise in prices in recent years has been crazy.

I don't know if Barcelona would be affected as much as the coastal regions. But maybe as I remember that most of the people that looked at our flat were other Europeans of Americans.

pim

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  • 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%



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