Spain "investors" Are Fried Up

[catara]

" Property agents in Spain, Europe's hottest housing market this decade, are likely to cut vacation home prices by as much as 10 percent this year, according to RR de Acuna & Associates in Madrid, which values real estate for about 40 percent of mortgages. A slowdown may have a ``psychological'' effect throughout Europe, said Tobias Just, an analyst at Deutsche Bank AG in Frankfurt."

" The Organization for Economic Cooperation and Development in January said house prices in Spain may be overvalued by as much as 30 percent. A sudden acceleration in interest rates could cause an ``abrupt adjustment in which prices would plunge,'' the Paris-based OECD said. A 30 percent slump could reduce Spain's economic growth by as much as 1.8 percentage points, according to Deutsche Bank's Just. "

http://www.bloomberg.com/apps/news?pid=new...id=aCk.OYMSRtDA

I guess it is the beggining of the end for easy money obtained from ignorant people.

Buy those condos before it is too late.

Edited March 21, 2007 by catara

[dogbox]

" Property agents in Spain, Europe's hottest housing market this decade, are likely to cut vacation home prices by as much as 10 percent this year, according to RR de Acuna & Associates in Madrid, which values real estate for about 40 percent of mortgages. A slowdown may have a ``psychological'' effect throughout Europe, said Tobias Just, an analyst at Deutsche Bank AG in Frankfurt."

" The Organization for Economic Cooperation and Development in January said house prices in Spain may be overvalued by as much as 30 percent. A sudden acceleration in interest rates could cause an ``abrupt adjustment in which prices would plunge,'' the Paris-based OECD said. A 30 percent slump could reduce Spain's economic growth by as much as 1.8 percentage points, according to Deutsche Bank's Just. "

http://www.bloomberg.com/apps/news?pid=new...id=aCk.OYMSRtDA

I guess it is the beggining of the end for easy money obtained from ignorant people.

Buy those condos before it is too late.

One minute posters such as Adi Brown here tell us Spain is set to rocket again this year and now this. Who is right?

Im glad I chose not to invest in tired mature markets at the upper end of the investment cycle.

Merely money storage at best after inflation and ALL costs (including MEWd deposits) accounted for.

Has to be better to spot early days market opportunities surely if a worthwhile return is required.

[catara]

One minute posters such as Adi Brown here tell us Spain is set to rocket again this year and now this. Who is right?

Im glad I chose not to invest in tired mature markets at the upper end of the investment cycle.

Merely money storage at best after inflation and ALL costs (including MEWd deposits) accounted for.

Has to be better to spot early days market opportunities surely if a worthwhile return is required.

Unfortunately the Spanish crash will induce a crash everywhere in European holiday market. And Morocco, cape Verde and Egypt will not be spared.

Same as the Caraibean Island are not and will not be spared by USA crash.

I am just investigating some purchase of land in Florida. The prices of land near Orlando are now (March 2007) about 2-3 times less than they were in 2005.

[dogbox]

Unfortunately the Spanish crash will induce a crash everywhere in European holiday market. And Morocco, cape Verde and Egypt will not be spared.

I dont agree.

People have to invest in order to provide for thier future. Just because Spain has a correction it does not follow these other places will, indeed the opposite will happen as people welch on Spain in favour of newer investment arena's.

One should never base investment decisions when it comes to NEW markets on the 'Ill wait in case it crashes' theory.

Dont forget Spain is largely a British investment story. Morocco for example is attracting Americans, French and Belgians so Spain has no reverberation with such people.

Imagine if Spain does crash - many more agents will simply switch to its close neighbour Morocco, further boosting the already frenzied market there.

[catara]

I dont agree.

People have to invest in order to provide for thier future. Just because Spain has a correction it does not follow these other places will, indeed the opposite will happen as people welch on Spain in favour of newer investment arena's.

One should never base investment decisions when it comes to NEW markets on the 'Ill wait in case it crashes' theory.

Dont forget Spain is largely a British investment story. Morocco for example is attracting Americans, French and Belgians so Spain has no reverberation with such people.

Imagine if Spain does crash - many more agents will simply switch to its close neighbour Morocco, further boosting the already frenzied market there.

Time will tell. I wish I knew which place crashes and how much it crashes, I could make tons of money that way.

We are all spectators as the things unfold. I decided to buy a couple of properties in USA so I am only following that market.

Edited March 22, 2007 by catara

[whiterabbit]

Time will tell. I wish I knew which place crashes and how much it crashes, I could make tons of money that way.

We are all spectators as the things unfold. I decided to buy a couple of properties in USA so I am only following that market.

Where have you bought in the US? I am buying a place in downtown Atlanta GA right now.

[dogbox]

Where have you bought in the US? I am buying a place in downtown Atlanta GA right now.

Im interested to know more, what and why?

Cheers

DB

[catara]

Where have you bought in the US? I am buying a place in downtown Atlanta GA right now.

I am interested in the following areas:

1) between Kingman (Arizona) and Las Vegas. There will be some huge projects for commuters to Las Vegas (in 2010 there will be a Hoover Dam By-pass so the distance to LV will be about 1 hour). I am also in love with Grand Canyon and 2 days ago they started developing the Grand Canyon West.

2) somewhere near ski resorts in Colorado. The cheapest land seems to be near Wolf Creek Resort.

3) somewhere in Florida. I found the most convenient land around Melbourne-Palm Bay. The problem in Florida is the huge property tax.

4) somewhere near the national parks in Utah.

These are the areas I am interested, it is of course very much related to my personal preferences...

Georgia is also a very good region, I would be interested near Savannah.

[whiterabbit]

Im interested to know more, what and why?

Cheers

DB

Hi well various reasons, number 1 being it is still very cheap for average incomes. My company has got over 10 vacancies all paying over 100k right now in IT and we can't get staff so are having to relocate people (NYC and London). Within 5 miles of our office you can still buy a very nice older 4 bed for 350-400k on a half acre lot. Some of these are now being torn down and builders are offering the same money for just the land. A mcmansion on the same size lot sells for 1.5 million plus. A decent 3 bed 2 bath is still 250k. Decent 1 bed flat for 160k. There are lots of very high paid jobs available and lots of Amercians are finally realizing there can move to Atlanta earn the same money and have a much better lifestyle. My company pays exactly the same in Atlanta as DC, NYC and London! The house I am buying I can straight away rent out to co-workers and cover the mortgage on however I am really in it for the captial apprication of the land.

Downtown Atlanta itself is undergoing a rennasiance with lots of very nice new flats and office buildings. All three major colleges are expanding and people are again beginning to move back into the city. Tons of inward investment going on.

Delta are adding lots of non stop international flights to Russia, Korea and soon China. When I was just there I noticed a lot more foreign accents and companies such as Maderin Hotels are moving their HQ from Singapore.

From 2006 state income tax is being phased out for people over 65. This will increase the desirablity of the GA mountains as a retirement area. Believe it or not there are also some very nice vinyards being opened (7 so far another 11 currently being planned). I have visited the first ones and it feels like you are in Sonama! As we have discussed on other thread lots of retiress are moving from FL to GA, TN, SC and NC due to very high FL property tax and insurance.

As a whole I think GA is a good bet and also agree Savannah is worth a look as are St Simons Island, Brunswick etc although since the G8 summit these areas have gone up quite a bit. There is talk about creating an IT corridor between Savannah and Jacksonville alongside the i95.

Just got back from the pub so I can explain in more detail next time if you have any questions?

[dogbox]

Hi well various reasons, number 1 being it is still very cheap for average incomes. My company has got over 10 vacancies all paying over 100k right now in IT and we can't get staff so are having to relocate people (NYC and London). Within 5 miles of our office you can still buy a very nice older 4 bed for 350-400k on a half acre lot. Some of these are now being torn down and builders are offering the same money for just the land. A mcmansion on the same size lot sells for 1.5 million plus. A decent 3 bed 2 bath is still 250k. Decent 1 bed flat for 160k. There are lots of very high paid jobs available and lots of Amercians are finally realizing there can move to Atlanta earn the same money and have a much better lifestyle. My company pays exactly the same in Atlanta as DC, NYC and London! The house I am buying I can straight away rent out to co-workers and cover the mortgage on however I am really in it for the captial apprication of the land.

Downtown Atlanta itself is undergoing a rennasiance with lots of very nice new flats and office buildings. All three major colleges are expanding and people are again beginning to move back into the city. Tons of inward investment going on.

Delta are adding lots of non stop international flights to Russia, Korea and soon China. When I was just there I noticed a lot more foreign accents and companies such as Maderin Hotels are moving their HQ from Singapore.

From 2006 state income tax is being phased out for people over 65. This will increase the desirablity of the GA mountains as a retirement area. Believe it or not there are also some very nice vinyards being opened (7 so far another 11 currently being planned). I have visited the first ones and it feels like you are in Sonama! As we have discussed on other thread lots of retiress are moving from FL to GA, TN, SC and NC due to very high FL property tax and insurance.

As a whole I think GA is a good bet and also agree Savannah is worth a look as are St Simons Island, Brunswick etc although since the G8 summit these areas have gone up quite a bit. There is talk about creating an IT corridor between Savannah and Jacksonville alongside the i95.

Just got back from the pub so I can explain in more detail next time if you have any questions?

Sounds good.

Could I as a Brit living in England purchase on a B2L basis, if so what % deposit required?

So where is Realistbears US crash which he says is a done deal????????????

Edited March 24, 2007 by dogbox

[catara]

Sounds good.

Could I as a Brit living in England purchase on a B2L basis, if so what % deposit required?

So where is Realistbears US crash which he says is a done deal????????????

Georgia never had a bubble, prices grew realistically.

The bubble was in Florida, NOrth East and West. I can guarantee you that the bubble is deflating rapidly in Florida, California and Nevada. If you find the right place, you can already make wise investments there but you need to study

the market.

Dogbox, firstly check your credit in America. if you have an immaculate credit then maybe you can get a 90% loan.

Edited March 24, 2007 by catara

[adibrown]

One minute posters such as Adi Brown here tell us Spain is set to rocket again this year and now this. Who is right?

Im glad I chose not to invest in tired mature markets at the upper end of the investment cycle.

Merely money storage at best after inflation and ALL costs (including MEWd deposits) accounted for.

Has to be better to spot early days market opportunities surely if a worthwhile return is required.

Spain is set to rocket again this year.

Emigration is growing, baby boomers love Spain and the Germans are soon back to buying property abroad.

Dogbox if you believe the German property market is set to grow then where do you think German residents are going to invest that equity increase.

In the nineties the Germans were buying property all over Spain, in fact I was looking around at this time and in the Costa Almeria the majority of EA's and owners were German. Most sold to the Brits over the past 6 years but they still rent and come down in their 1000's via camper vans. The climate and culture attracts them. As soon as they have buying power again they will enter the market to mop up any over supply.

I do think the UK will crash and I am being slightly facetious when I say Spain is set to rocket, in fact Spain has been in the middle of a crash of sorts since 2005. You can more or less offer 20% below asking price for the majority of resale properties in Spain but I think these were over valued by 20% in the first place. As I have always said Spain is full of micro markets and some are definitely over valued. Inland properties for a start are being sold for silly prices. Other markets within Spain will retain their value and always be in demand.

One thing that drives Spain as a good long term property investment compared to "fads" such as Morocco, Bulgaria, Romania, Croatia, Turkey, Cape Verde etc is familiarity. Let me explain further:

Bob and June are 60, their friends Steve & Sue buy a place in Almeria. Bob and June go out to see Steve&Sue. Steve&Sue sell the area to them and Bob&June whilst on holiday look at some property. Steve&Sue have a constant stream of visitors and in an attempt to get some friends living in the area they really do the hard sell. Bob&June go for it and buy a villa down the road from Steve&Sue and move out there. Bob&June do the same as Steve&Sue and invite friends and family out to see them. The circle grows. Bob&Junes son who is 40 comes out with his family and decides to buy a little off plan nearby. He reckons he can come out and have a bit of privacy but also palm the kids off on gran and grandad. He invites his friends to stay there....the circle grows. When people are retiring abroad they like to be near friends and family, like any immigrants they head for the familiar areas/ghettos.

Melvin and Maureen your Mum and Dads friends aren't going to retire to Morocco now are they, or Blgaria for that matter.

Also how many Spanish tourists do you see on your travels? Not many because unlike the Germans, French or Italians the Spanish tend to spend most of their holidays in their own country, especially the costas. Add that to an ever improving transport infrastructure in the Costas (New Airport in Murcia opening next year) Thanks EC ;o)

Remember Spain is a developing country, still coming out of Francos grip and whos native language is the 4th most spoken in the World. Unbelievably unlike say Ireland you can still pick up a property in 90% of Spain for less than Scotland or France.

[whiterabbit]

Sounds good.

Could I as a Brit living in England purchase on a B2L basis, if so what % deposit required?

So where is Realistbears US crash which he says is a done deal????????????

You can for sure get a 90% loan in GA. I know a couple of Brits who made good money off plan at Atlantic Station in the last year. http://www.atlanticstation.com/live.php This is now fully priced but gives you an idea of whats being developed.

As far as the southern US is concerned the only slight drops I have actually witnessed are inland FL. Long term lots of jobs are still being created in FL and there is only so much land........................

[catara]

As far as the southern US is concerned the only slight drops I have actually witnessed are inland FL. Long term lots of jobs are still being created in FL and there is only so much land........................

This is definitely not true. I just checked a couple of area like Port Malabar in Palm Bay or Golden Estates in Naples, prices for land is 1/4 to 1/3 of what was 2 years ago. Same in Coral Bay or Sarasota.

I do not know about houses and condos as I am not interested in buying Mcmansions and stucco towers...

[catara]

Spain is set to rocket again this year.

Emigration is growing, baby boomers love Spain and the Germans are soon back to buying property abroad.

Remember Spain is a developing country, still coming out of Francos grip and whos native language is the 4th most spoken in the World. Unbelievably unlike say Ireland you can still pick up a property in 90% of Spain for less than Scotland or France.

You might be right. NObody knows for sure whats going to happen.

The only issue is that people want to experience something else besides Spain.

[adibrown]

You might be right. NObody knows for sure whats going to happen.

The only issue is that people want to experience something else besides Spain.

I fully agree with you.

Two retired couples that live either side of my house in Spain do just that. They live in Spain but one couple visits Canada twice a year for a month at a time to visit their daughter and the other couple travel all over the World. Of course because they live in Spain they only pay £30 a year council tax and have £200k in the bank because their villa is half the price of the house they sold in the UK. Living in Spain allows them more freedom financially to experience the World.

Some places are great to visit but you wouldnt want to live there. Thats my point. Cape Verde is great but a boring island after a few weeks. Morocco is great but would you want to live their full time. Bulgaria is an interesting weeks holiday. Of course this is me looking at locations as full or part time homes and not as investments or holiday lets. My opinion is that when *** starts then property as an investment will be passe bu tyou will always have people looking to emigrate. So therefore those markets will remain stable or at worse go down by less than 15%. Markets like Morocco/Bulgaria in my opinion will drop by 40%+.

This is of course long term, I am not talking short term flipping. I couldnt comment on short term spikes in certain developments as a result of canny marketing, sales etc.....oh just did make a comment. Well good luck to those putting their necks on the line for quick profits.

I do agree with you though Catara we can all have our opinions but nobody really knows what is going to actually happen. What does disturb me is the new breed of property investor who assumes that they are smart because they make a few bob here and there over the past 6 years. With this recent trend of global HPI you could buy anything anywhere in the World and make money. When reality returns will the obsession still remain.

Edited March 25, 2007 by adibrown

[whiterabbit]

This is definitely not true. I just checked a couple of area like Port Malabar in Palm Bay or Golden Estates in Naples, prices for land is 1/4 to 1/3 of what was 2 years ago. Same in Coral Bay or Sarasota.

I do not know about houses and condos as I am not interested in buying Mcmansions and stucco towers...

Not sure about land. Have houses declined in Sarasota.

[soldintime]

I fully agree with you.

Two retired couples that live either side of my house in Spain do just that. They live in Spain but one couple visits Canada twice a year for a month at a time to visit their daughter and the other couple travel all over the World. Of course because they live in Spain they only pay £30 a year council tax and have £200k in the bank because their villa is half the price of the house they sold in the UK. Living in Spain allows them more freedom financially to experience the World.

Some places are great to visit but you wouldnt want to live there. Thats my point. Cape Verde is great but a boring island after a few weeks. Morocco is great but would you want to live their full time. Bulgaria is an interesting weeks holiday. Of course this is me looking at locations as full or part time homes and not as investments or holiday lets. My opinion is that when *** starts then property as an investment will be passe bu tyou will always have people looking to emigrate. So therefore those markets will remain stable or at worse go down by less than 15%. Markets like Morocco/Bulgaria in my opinion will drop by 40%+.

Britain in Spain - My reason not to invest.

[bethany]

Hi all

Im new on this forum but have just recently decided to buy in Spain - Costa Almeria - Vera Playa area - a new property but building has started and due to be finished September 2008 - I have only just found these forums and as you can imagine am alarmed at some of the things that are been said - I've bought with other family members and am not looking for a quick profit we are looking to keep for minimum of 10 years and using it for family use only - in other peoples experience do you think we could still lose 10 years down the line? We have bought a 2 bed 2 bath south facing 2nd floor (top floor) apartment.

[catara]

Hi all

Im new on this forum but have just recently decided to buy in Spain - Costa Almeria - Vera Playa area - a new property but building has started and due to be finished September 2008 - I have only just found these forums and as you can imagine am alarmed at some of the things that are been said - I've bought with other family members and am not looking for a quick profit we are looking to keep for minimum of 10 years and using it for family use only - in other peoples experience do you think we could still lose 10 years down the line? We have bought a 2 bed 2 bath south facing 2nd floor (top floor) apartment.

If you keep it more than 10 years and do not expect rental income, than it is an excellent purchase.

Just expect some possible delays as the builders might start to go bankrupt in Spain...

[spanman]

If you keep it more than 10 years and do not expect rental income, than it is an excellent purchase.

Just expect some possible delays as the builders might start to go bankrupt in Spain...

And bankrupt developments can be tied up by the courts for periods in excess of 5 years.

[AustralianInvestor]

From 2003 the Spanish government is spending more than $6 billion a year on thier high speed train infrastructure, approximately 0.6 percent of the Spanish GDP.

For a country to spend this much money on infrastucture, there is a still a lot of potential. I would bank my money on new stations between Madrid, Alicante, and Valencia.

Network

The main cities have local networks connecting the smaller towns and villages. In Madrid there are 9 lines with frequent services of less than 15 minutes with a 95% punctuality.

From Madrid Central station travellers can easily reach any other destination in Spain. For example Madrid to Valencia is a 4-hour train ride.

'Cercanias' trains (suburban services) are the newest trains in Europe with connections to: Toledo, Segovia and the Escorial Palace.

High-speed trains:

EUROMED trains run at 124 mph (200 km/h) on the line: Barcelona – Valencia/Alicante

ARCO trains run at 124 mph from: Port Bou to Valencia Barcelona to Alicante to Murcia

ALARIS high-speed trains run at 124 mph from: Madrid to Valencia to Castellon

ALTARIA trains run at 124 mph on the following routes: Madrid – Alicante/ Algeciras/ Barcelona/ Cadiz/ Huelva/ Pamplona