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Real Estate Crashing In Spain

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I'm in Madrid at the moment and this morning there was an amazing article in the free Metro paper about the property crash in Spain.

This year there's been a 9.8% drop in properties that are sold. A new report puts the problems down to "oversupply and a monstrous lack of demand" and they predict that property prices will continue to fall. As a consequence, between 2009 and 2014, three quarters of estate agencies in Spain will close!! Apparently at the moment of the 60,000 agencies across the country, 35% are already unable to meet their financial obligations.

Good to know that Gordon has abolished boom and bust in Britain... :rolleyes::rolleyes::rolleyes:

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I'm in Madrid at the moment and this morning there was an amazing article in the free Metro paper about the property crash in Spain.

This year there's been a 9.8% drop in properties that are sold. A new report puts the problems down to "oversupply and a monstrous lack of demand" and they predict that property prices will continue to fall. As a consequence, between 2009 and 2014, three quarters of estate agencies in Spain will close!! Apparently at the moment of the 60,000 agencies across the country, 35% are already unable to meet their financial obligations.

Good to know that Gordon has abolished boom and bust in Britain... :rolleyes::rolleyes::rolleyes:

Right. :lol::blink::unsure::ph34r:

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I'm in Madrid at the moment and this morning there was an amazing article in the free Metro paper about the property crash in Spain.

This year there's been a 9.8% drop in properties that are sold. A new report puts the problems down to "oversupply and a monstrous lack of demand" and they predict that property prices will continue to fall. As a consequence, between 2009 and 2014, three quarters of estate agencies in Spain will close!! Apparently at the moment of the 60,000 agencies across the country, 35% are already unable to meet their financial obligations.

Good to know that Gordon has abolished boom and bust in Britain... :rolleyes::rolleyes::rolleyes:

Well Spanish agents must operate on thin margins. If there were 60,000 estate agencies in the UK each one would sell an average of 16 properties a YEAR.

If they have 60,000 of (6,000 seems more likely), it's no wonder 35% are going broke.

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I'm in Madrid at the moment and this morning there was an amazing article in the free Metro paper about the property crash in Spain.

This year there's been a 9.8% drop in properties that are sold. A new report puts the problems down to "oversupply and a monstrous lack of demand" and they predict that property prices will continue to fall. As a consequence, between 2009 and 2014, three quarters of estate agencies in Spain will close!! Apparently at the moment of the 60,000 agencies across the country, 35% are already unable to meet their financial obligations.

Good to know that Gordon has abolished boom and bust in Britain... :rolleyes::rolleyes::rolleyes:

The UK is a totally different market to anywhere in the world. We have a never never ending supply of BTL muppets. Official There Will Be No Crash. The Boom and Bust cycle is a thing of the past. It will be Different This Time.

Gordon Brown is never wrong.

Edited by joey

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Id be interested to know if it's all Spanish property that has seen drops. I get the impression that the prob is there have been a zillion "holiday" appartments knocked out quickly and that its hard to sell these on atm. But does that then knock onto say inner city property in Barcelona or whatever? Surely they are different markets, those big blocks were never going to appeal to Spanish families... you're hardly going to bring up your kids on the 19th floor next to some drunk burnt to a crisp Brits!

The UK is a totally different market to anywhere in the world.

well thats true, the UK is different to eg Spain because the UK is the UK and Spain is Spain, erm they are like, totally different places. There's even a bit of floaty wet stuff seperating us. What next, are you gonna tell me that I'll be picking up a house in Monaco for 90% of its original value? ooooooo k. Now id be happy to be wrong on that last point :D:D

Edited by Orbital

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Guest d23
Id be interested to know if it's all Spanish property that has seen drops. I get the impression that the prob is there have been a zillion "holiday" appartments knocked out quickly and that its hard to sell these on atm. But does that then knock onto say inner city property in Barcelona or whatever? Surely they are different markets, those big blocks were never going to appeal to Spanish families... you're hardly going to bring up your kids on the 19th floor next to some drunk burnt to a crisp Brits!

well thats true, the UK is different to eg Spain because the UK is the UK and Spain is Spain, erm they are like, totally different places. There's even a bit of floaty wet stuff seperating us. What next, are you gonna tell me that I'll be picking up a house in Monaco for 90% of its original value? ooooooo k. Now id be happy to be wrong on that last point :D:D

Spain has seen over 3 million new properties built in the last 4 years, in a country of 16.5 million families with between 22 - 24 million houses of which 3 - 4 million are already empty, in a country where 85% are already owner occupiers (highest level in the EU) so not sure it's the best comparison to make

Edited by d23

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Id be interested to know if it's all Spanish property that has seen drops. I get the impression that the prob is there have been a zillion "holiday" appartments knocked out quickly and that its hard to sell these on atm. But does that then knock onto say inner city property in Barcelona or whatever? Surely they are different markets, those big blocks were never going to appeal to Spanish families... you're hardly going to bring up your kids on the 19th floor next to some drunk burnt to a crisp Brits!

..

I think the 'knock on' effect is palpable; if the Brits pulled out of Cyprus, for example, the market would collapse immediately.

Cyprus suffers from the same speculative market brought about by the proliferation of 'build 'em cheap and fast' holiday villa and apartment 'villages'. Cypriots are struggling to buy on their low wages while Brits snap up off-plan properties everywhere, speculating on further rises. For how much longer, though? I think it won't be long before we see Brits heading for cheaper Bulgarian coastal resorts & Turkey...

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I've often thought about what would make a solid indicator of the housing market going into reverse.

Obviously the fact asking prices are dropping is one indication, but currently for every house I see with an asking price reduction I could find several that did sell without price reduction. I don't think that the asking price drops in houses even though small (but most welcome) are the definite signs of a strong market reversal. So that led me to consider another indicator, but for a moment let me digress :

During the gold rush in America the people rushed to the west coast in the hope of a chance of getting quick rich, but there were those that paused for thought before joining the rush. They must have drawn the conclusion that, with all those people rushing west it would decrease their chances of striking it lucky, but then if they didn't join them they surely would never get rich. If only there was a way to join them, make some money but without taking as much a gamble as the prospectors.

You might think then, who were those people or am I just talking out of my a***se ?

Well these people did exist..... they were the ones that sold the picks and shovels to the prospectors. They took a little bit, from a lot of people ...and got rich. And if things got bad and no gold was found in the area they were in, they sold up and moved to the next town or next supposed gold seam.

Now back to the present. How might I cash in on this massive house price inflation without risking a lot on mortgages etc ?

I'll become an Estate Agent.

What happens when things get tough and houses are not selling ?

I'll sell up/merge with one of the bigger Estate Agents, cash in and get out.

So what I would like to see is the disappearance of all these Estate Agents that have seemed to have sprung up in my area in the past several years.

Then I'll know things are really bad. :)

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Guest grumpy-old-man
I've often thought about what would make a solid indicator of the housing market going into reverse.

Obviously the fact asking prices are dropping is one indication, but currently for every house I see with an asking price reduction I could find several that did sell without price reduction. I don't think that the asking price drops in houses even though small (but most welcome) are the definite signs of a strong market reversal. So that led me to consider another indicator, but for a moment let me digress :

During the gold rush in America the people rushed to the west coast in the hope of a chance of getting quick rich, but there were those that paused for thought before joining the rush. They must have drawn the conclusion that, with all those people rushing west it would decrease their chances of striking it lucky, but then if they didn't join them they surely would never get rich. If only there was a way to join them, make some money but without taking as much a gamble as the prospectors.

You might think then, who were those people or am I just talking out of my a***se ?

Well these people did exist..... they were the ones that sold the picks and shovels to the prospectors. They took a little bit, from a lot of people ...and got rich. And if things got bad and no gold was found in the area they were in, they sold up and moved to the next town or next supposed gold seam.

Now back to the present. How might I cash in on this massive house price inflation without risking a lot on mortgages etc ?

I'll become an Estate Agent.

What happens when things get tough and houses are not selling ?

I'll sell up/merge with one of the bigger Estate Agents, cash in and get out.

So what I would like to see is the disappearance of all these Estate Agents that have seemed to have sprung up in my area in the past several years.

Then I'll know things are really bad. :)

ah, but you forget, people only shut down after they have had no business for a couple of years (normally). They have to go through this process first.

I mean, if you have a bad month in business you don't shut down, you downsize restructure first, then you borrow more money, then you restructure again, etc, etc.

Then you close down. We have just started a few months ago. ;)

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ah, but you forget, people only shut down after they have had no business for a couple of years (normally). They have to go through this process first.

I mean, if you have a bad month in business you don't shut down, you downsize restructure first, then you borrow more money, then you restructure again, etc, etc.

Then you close down. We have just started a few months ago. ;)

Mmm I see your point, but I suppose every indicator has its time lag. Perhaps we can approximate it thus :

Constant = (Reliability of indicator) / (Time-lag of indicator)

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