Investment In Spain

[forestfire]

more spam please

[Lionarm]

Hi all.

I'm new to the forum and have been reading through the posts (nothing on the tellingvision). For some reason the posts are generally very polarised. If you say something good about Spain then you are wrong. An agent is a spammer. Otherwise, it's a good time to buy and a great place to retire.

I would imagine that the truth is between these extremes.

For example, nowhere is free of crime, greedy people or bent politicians. Certainly not Spain. Certainly not the UK.

House prices may well drop some or remain about the same for years. There could be a 'crash' as many seem to want (to make houses cheaper, or to punish those richer than themselves?) but this would be politically unexpedient so they (politicians) will do everything to engineer an economic 'soft landing'. Therefore I see the latter scenario as more likely.

Is it a good or bad time to buy? Well either of course, because it depends where and how much you buy for, and why you are buying, and your financial situation. Or for the same reasons and if one is prepared to take a longer term view, one could say more probably neither good or bad. Some people may buy tomorrow and may make a gain one day. But if they have a mortgage that they expect to pay with rental income they may well lose out.

To be conservative I would say do not buy in Spain (but this really applies to buying anything!) unless you can afford to lose the whole investment.

Then you can't go wrong.

I have an apartment in Almeria and am entirely philosophical about the situation. It doesn't really matter to me what its value is - I'm interested of course, hence this forum - but ultimately it makes no difference. If prices fall I say good news for my children; if they rise I say this as well because they get the property when I die.

In the meantime: more San Miguel and tapas. Buena suerte!

Edited March 18, 2008 by Lionarm

[rondy]

they (politicians) will do everything to engineer an economic 'soft landing'. Therefore I see the latter scenario as more likely.

I have an apartment in Almeria and am entirely philosophical about the situation. It doesn't really matter to me what its value is - I'm interested of course, hence this forum - but ultimately it makes no difference. If prices fall I say good news for my children; if they rise I say this as well because they get the property when I die.

In the meantime: more San Miguel and tapas. Buena suerte!

Politicians cannot do anything about prices in Spain, they are now falling like a rock. Cobined with the very low Pound/Euro rate, it is financial suicide to purchase as a Brit in Spain in 2008.

There are tens of thousands of rental properties.

I am not sure where you live in Almeria , but if it is between Vera and Mojacar then you really are unlucky as that area is one of the ugliest one can imagine and prices will go down by 80% in the next few years.

[markinspain]

I am not sure where you live in Almeria , but if it is between Vera and Mojacar then you really are unlucky as that area is one of the ugliest one can imagine and prices will go down by 80% in the next few years.

Living in a Spanish area on the south side of the Sierra Gador, I would agree entirely. It is also the British Expat triangle so unless you like that type of thing look elsewhere.

[esmerelda]

For example, nowhere is free of crime, greedy people or bent politicians. Certainly not Spain. Certainly not the UK.

True, however I think it has been taken to a fine art in certain parts of the Costas! A unique blend of dodgy developers, dodgy politicians and dodgy government backed policies (ie the land Grab). Result - the southern coast is a complete blight from Malaga to Algeciras... "villas" that are little better than terraced housing, shortage of water supply (well all those well watered golf courses!!).....wouldn't touch Spain with a barge pole!

[Lionarm]

[i am not sure where you live in Almeria , but if it is between Vera and Mojacar then you really are unlucky as that area is one of the ugliest one can imagine and prices will go down by 80% in the next few years.]

Rondy I shall respond but I am not going to get into a slanging match with you or anyone else. Beauty is in the eye of the beholder and so too is ugliness, but everything looks nicer in the sun. It's also difficult to believe that the Mediterranean Sea is ugly; even Homer only called it wine-dark. But if you think it's ugly then I advise you not to go to any English city centre, the shock could be too great.

After a few years I shall speak to you again and if you are right about the 80% fall I shall offer you a drink, clever chap. That you have written it as fact instead of opinion does you no favours as you are almost certainly going to be wrong. Anybody who deals in figures or percentages are speculating, which is a foolish pastime.

Reference the 'very low Pound/Euro rate', I accept that this will influence demand from the UK but on the other hand doesn't that mean that my euros are now worth more pounds?

Going simply by what has happened in the past, property will go up and go down by various degrees at various times (so what). However, over the long term it has been rising rather faster than inflation.

By the way, I am domiciled in Kent because I don't believe in 'putting all my eggs in one basket'. Happy days.

[rondy]

sun. It's also difficult to believe that the Mediterranean Sea is ugly; even Homer only called it wine-dark. But if you think it's ugly then I advise you not to go to any English city centre, the shock could be too great.

Mediteranean Sea around Vera-MOjacar was extremely beautiful before Spanish developers decided to destroy the area and built the junk that it is such an eye-sore in that area.

If you want nicer areas go between Aguillas and San Juan, where human beings have not managed yet to wreck the nature.

If you bought in Vera-MOjacar area, then you are really going to lose lots of equity in the near future. But as you said, you do not care so you will be fine.

[snudge]

If you have bought in a brit domintaed over-developed area then I don't have much sympathy, buying into areas that are completely unintegrated, sometimes deliberately so, with the original local communities is a dangerous game.

The coast from Malage to Algeciras has indeed been ruined, but if you keep going, just round the corner there is another world waiting from Tarifa to Cadiz.

[Lionarm]

Those comments are much more realistic and I wouldn't bother to argue with them. You say that one part of Spain is preferable to another, which of course is is true although also subjective. Some people want a Brit-in-the Sun lifestyle and I think that is their choice. Even Rondy says that equity loss will 'only' be "lots" (in the near future). Rondy, a few questions please: 1. In your opinion, where do you think prices will be in 10 years time, 20 years time? 2. Your opinion of property values seems very set, but why is it that you want everyone to know these opinions? I mean if you have some alruistic reason, for example you're worried about people losing money, then what if you actually are wrong? Finally Rondy, what are your investment tips for the future?

Incidentally, I have some wine investments that did very well indeed last year but I don't remember anyone predicting that particular outcome.

The thing about a crash (or boom) is that eventually there will be one (at least locally); of course nobody knows when it could be. Perhaps a year, fifty years or a hundred years time. Again, there are degrees of crash. In retrospect, some crashes of the past, said to be 'painful' at the time, now look like minor market adjustments.

Now, if I had set up a website called HousePriceRise.com a few years ago would I have been justified? Stay happy.

[spanman]

The coast from Malage to Algeciras has indeed been ruined, but if you keep going, just round the corner there is another world waiting from Tarifa to Cadiz.

Rapidly getting trashed just as badly as the other side (sadly).

[barrabus]

Can anybody share any personal experience regarding buying property in spain for investment purposes mainly, has it worked out for you , should you have bought elsewhere and would you do it again

buy in mallorca , north /east, best value . best investment i have ever made no crime best beaches cheap flights good roads great golf ,you will enjoy your investment.

[snudge]

Rapidly getting trashed just as badly as the other side (sadly).

Spanman please tell me what parts of east Costa de la Luz do you think are being trashed at present?

[spanman]

Spanman please tell me what parts of east Costa de la Luz do you think are being trashed at present?

Conil, Chiclana ( in particular the abomination of Novo Sancti Petri and the desecration of the cliffs at Roche), the plans for Trafalgar northwards are horrendous - the usual hotel golf course complexes Carrying further on from Cadiz Valdelagrana - a mini malaga, hordes of new builds around Puerto de Santa Maria, Rota more high rise flats almost to the beach, the "EL Dorado" complex at Costa Ballena. Don't get me started on inland like Arcos and Jerez De La Frontera.

The master plan is to concrete strip this side of the country as well.

Edited March 25, 2008 by spanman

[spanman]

Oh and I forgot to mention the entire area blighted by wind turbines as far as the eye can see.

[snudge]

Conil, Chiclana ( in particular the abomination of Novo Sancti Petri and the desecration of the cliffs at Roche), the plans for Trafalgar northwards are horrendous - the usual hotel golf course complexes Carrying further on from Cadiz Valdelagrana - a mini malaga, hordes of new builds around Puerto de Santa Maria, Rota more high rise flats almost to the beach, the "El Dorado" complex at Costa Ballena. Don't get me started on inland like Arcos and Jerez De La Frontera.

The master plan is to concrete strip this side of the country as well.

I can't fault you on your distaste of Novo Sancti Petri but as far as desecration of the cliffs at Roche goes I assume you are referring to the proximity of the properties to the sea? The architecture is hardly offensive is it and the initial plots were sold over 20 years ago so its not exactly new build high rise sprawl? As for Conil I have to take you up on that one, most of the construction is at the back of the original town, a fair amount of which is social housing which is needed, there are no frontline developments in Conil, hasn't been for a good few years and the local council are extending the distance from the sea which urban development is permitted to 200m. They have also protected the land at Castilnovo from development.

[spanman]

I can't fault you on your distaste of Novo Sancti Petri but as far as desecration of the cliffs at Roche goes I assume you are referring to the proximity of the properties to the sea? The architecture is hardly offensive is it and the initial plots were sold over 20 years ago so its not exactly new build high rise sprawl? As for Conil I have to take you up on that one, most of the construction is at the back of the original town, a fair amount of which is social housing which is needed, there are no frontline developments in Conil, hasn't been for a good few years and the local council are extending the distance from the sea which urban development is permitted to 200m. They have also protected the land at Castilnovo from development.

Conil is resposable for Sancti Petri and also Roche. If you haven't been there for a while you will now find an obtrusive large hotel built right on top of the first cala. Adjacent to the hotel quite a few new houses out of keeping with the rest of the urbanisation. The remainder of the cliffs have been set aside as protected - the day the sign went up the majority of the trees and bushes were destroyed. When there is money to be made Conil are as bad as the rest of them.

[snudge]

Conil is resposable for Sancti Petri and also Roche. If you haven't been there for a while you will now find an obtrusive large hotel built right on top of the first cala. Adjacent to the hotel quite a few new houses out of keeping with the rest of the urbanisation. The remainder of the cliffs have been set aside as protected - the day the sign went up the majority of the trees and bushes were destroyed. When there is money to be made Conil are as bad as the rest of them.

I don't know if we are at cross purposes here, if someone torches their land because the council refuse to authorise development on it there isn't much the council can do about it? Is your gripe with the ayuntamiento or the people of Conil or both? I know the hotel you are talking about.

Sancti Petri belongs to Chiclana and has nothing at all to do with Conil.

[spanman]

I don't know if we are at cross purposes here, if someone torches their land because the council refuse to authorise development on it there isn't much the council can do about it? Is your gripe with the ayuntamiento or the people of Conil or both? I know the hotel you are talking about.

Sancti Petri belongs to Chiclana and has nothing at all to do with Conil.

Got no gripe with anyone in particular. Just hate to see beautiful places destroyed for profit. The land on the cliffs is public land (Conil's) and I believe it was the council that cleared it (don't mind being wrong). Also fairly sure that the majority of Novo Sancti Petri that has been built in the last three years falls under Conil's jurisdiction.

My original point was that although at the moment De La luz is not too bad the eventual plan is to build it up as badly as the concrete strip on the east coast and they are progressing steadily in that direction.

[snudge]

Got no gripe with anyone in particular. Just hate to see beautiful places destroyed for profit. The land on the cliffs is public land (Conil's) and I believe it was the council that cleared it (don't mind being wrong). Also fairly sure that the majority of Novo Sancti Petri that has been built in the last three years falls under Conil's jurisdiction.

My original point was that although at the moment De La luz is not too bad the eventual plan is to build it up as badly as the concrete strip on the east coast and they are progressing steadily in that direction.

I agree there will be development but I disagree it will resemble anything like the Costa del Sol. Sancti Petri is 100% Chiclana.

[spanman]

Not worth arguing over. I guess not much going to happen for the next few years anyway.

[Lionarm]

ok. Lets get down to the nitty-gritty.

Obviously the thing about buying property is to get it when its at the bottom of a cycle, just as selling it should occur at the top. If you only have one property however it really doesn't make any difference if you think about it. If you are getting on the 'ladder' for the first time you do want property at the bottom of the cycle but would be very lucky to time it that cleverly. The over-riding concern would be to get on the ladder. Sell to rent? You're having a laugh. Rental money is gone forever whereas if you can secure a mortgage you are investing in an end product. If you choose not to believe in any of this then lets just say you are in the minority.

People who experience financial suicide in this market do so because they have over-stretched their personal finances i.e. they cannot afford the mortgage repayments. This happens mostly when interest rates rise; this in turn puts downward pressure on house prices.

Excuse me for going back to Almería, as I know a little about this area. Of course you can argue that it has been 'spoilt' as many wanted in. A limit of three stories had been imposed though. You could cite the curse of development - a victim of its own success. And this is ongoing. There is a new road going out of Vera through the marble lands to Granada. Then there is an AVE (HST) link going in to link Murcia with Almería with a station at Veramar (Gracias, Señor Zapatero), although it wont be finished for seven years. These improvements (if you allow the term) incidentally have already been budgeted for with the national SURPLUS. Also the latest rules regarding building homes in the province of Almería, an order known as the POTA originating in the Junta de Andalucía, make for interesting reading (strict limits).

So it looks like following the terrible crash and the slack having been taken up, there could be scope for property price increases in the future.

By the way somebody just rented my apartment for the summer.

Tinto verano or whisky and fanta?

[azogar]

http://www.typicallyspanish.com/news/publi...cle_15830.shtml

Record inflation in Spain for the advance figure for harmonised inflation in March

The increase in oil prices is being blamed for a new increase in the harmonized inflation index in Spain. The advance figure for the year to March from the National Statistics Institute has come in at 4.6% the highest ever seen for the index since it was started to be published in 1997. The harmonised index is the one which compares inflation rates across the European Union.

Reuters report that the increase was not expected with most analysts expecting the index to have remained at 4.4%

The Spanish Economy will increase by only 1.8% this year, according to new official reports. It compares to the current growth rate of 3%.

El Mundo newspaper claims today that the Prime Minister has seen an internal report showing the slow down in the economy this year will be unexpectedly intense.

The indications are that the last quarter of the year could see the largest fall in growth seen in a three month period in Spain since the Olympic Games in 1992, and unemployment is likely to increase to back over 10% by 2009.

The changing economic circumstances will lead the Prime Minister, José Luis Rodríguez Zapatero, to speak about the economy and the Government’s plans during his investiture speech.

Meanwhile the number of real estate companies and builders who have filed for bankruptcy protection in Spain is increasing. The mixture of fewer real estate sales and the banks closing the taps on easy mortgages have combined to complicate the landscape. The first large company to admit problems was Llanera last October, and others such as Habitat, Martinsa-Fadesa or Detinsa have had to refinance their debts. Valencia builder Encoval presented its problems last Friday at a time where the company is building 950 new homes.

Latest figures indicate that more than 60% of the credits awarded by banks and savings banks in Spain are linked to construction and real estate, with the bad debts in such companies increasing by 130% over last year.

Despite all this bad news the 35 companies listed in the Ibex – the main index in Madrid are showing record profits in absolute terms. The average profit increase was 14% last year, reaching 25% in the textile firm Inditex.

Spain is expected to employ 1,500 immigrants in the fishing industry over the next two years. A new training program under the name of Forpex is designed to strengthen the Spanish fishing fleet. The scheme has the support of the Ministries for Foreign Affairs, Employment and Social Affairs, as well as for Agriculture and Fisheries.

A new study from the IESE business school and Navarra university has shown that 95% of pension funds are less profitable that ten year state bonds. The study showed growth in 2007 for the state bonds of 5.76% compared to just 3% for individual pension plans.

The price of a gas bombona in Spain, the bottled butane gas used in many parts of the country, is to increase 9% tomorrow, April 1. It will take the price to 14.1 € compared to the current price of 12.94 €.

And finally,

Good news for the Spanish wine industry with a record for exports both by volume and value last year. The 15 million hectolitre barrier was broken with a 6.6% increase over the year to reach a value of 1.833 billion € - up 12.4%.

[HappyintheSun]

I went to Spain 5 years ago looking to invest, back then prices were alot more reasonable than what they are now, I did actualy put down an offer on a 3 bed villa which I thought would make a nice holiday re-treat for my family and I. The offer was rejected and I really struggled to find a property within my budget that ticked all the boxes. My estate agent in Spain then mentioned that they had an office in Turkey and that for my same budget I could invest in 3 properties! Long story short I went to Turkey, loved it, invested in the 3 properties over two years ago in a small bay (Turunc) in Turkey I have recently sold the last one and I have made a total profit of £150k..!

There are definately deals around if you look hard enough, stay away from large resorts or invest in small villages or bay's close to large towns. Best time to invest is november or March-April and use a good agent, stay away from locals who are trying to sell their uncles house, they are all on comission so use the professional and go for small agents with a UK base, this way you will be able to contact them in the UK and they will be able to give you a close personal service rather than these cattle pushers like MRI or Parador..

I put a deposit down on a futher 4 properties last November have sold 1 already with a £20k profit. As I mentioned before I have mainly invested in Turunc 20k from Marmaris becuase it is easy to spot a deal and much easier to re-sell, the agent I used was a company called LST Real Estate there website: www.londonspanishturkish.com there are a few other agents in the area like 'Homes etc' but I found them to be quite pushy and without experience.

Hope this helps..

[catara]

fit. As I mentioned before I have mainly invested in Turunc 20k from Marmaris becuase it is easy to spot a deal and much easier to re-sell, the agent I used was a company called LST Real Estate there website: www.londonspanishturkish.com there are a few other agents in the area like 'Homes etc' but I found them to be quite pushy and without experience.

Hope this helps..

This topic is about Spanish properties not about ramping Turkish properties.

Create your own thread if you want to write about Turkey!!!!

[bugga]

Excuse me for going back to Almería, as I know a little about this area. Of course you can argue that it has been 'spoilt' as many wanted in. A limit of three stories had been imposed though. You could cite the curse of development - a victim of its own success. And this is ongoing. There is a new road going out of Vera through the marble lands to Granada. Then there is an AVE (HST) link going in to link Murcia with Almería with a station at Veramar (Gracias, Señor Zapatero), although it wont be finished for seven years. These improvements (if you allow the term) incidentally have already been budgeted for with the national SURPLUS. Also the latest rules regarding building homes in the province of Almería, an order known as the POTA originating in the Junta de Andalucía, make for interesting reading (strict limits).

So it looks like following the terrible crash and the slack having been taken up, there could be scope for property price increases in the future.

By the way somebody just rented my apartment for the summer.

Tinto verano or whisky and fanta?

The place to invest at the moment in Spain is definitely Vera Playa which is an area close to Mojacar and Garrucha in Almeria. Let me tell you the reasons why this is the case:

1. Zapatero has recently bought a home there. Apparently he has holidayed there for years.

2. The AVE which is the high speed rail network will actually have a station at Vera Playa. This will be the only beach resort to have an AVE (as Lionarm rightly states this is because of Zapatero's influence). This means Madrid will be 2hrs away and Barcelona just under 4 hours. This area of Spain has always been very popular with people from Madrid and the AVE will add to this demand. Think Brighton and London.

3. Restrictions have always been in place to do with the height of buildings and this is currently 3 storeys for residential and 4 for commercial.

4. Vera Playa has 5km of fantastic sandy beach and an EU grant has been recently signed means more than 20million euros will be put aside to protect the beach from erosion and to add a watersports centre/lake at the Villaricos end of the playa. The lake has already been started.

5. A motorway has been recently built between Murcia airport and Vera. This is a toll road but means you can reach Vera playa now within 40 minutes from both Murcia and Almeria airports. Alicante is 1hr 40mins away should you require it.

6. Plans to construct 1000's of holiday homes inland from Vera Playa have recently been squashed (Thanks again Mr Z). Instead plans have been placed with the Junta at Vera to build high grade family homes and improve infrastructure (ie office blocks, shops etc).

Now I have to declare my vested interest. About 7 years ago I bought a house in Vera Playa. I paid cash so no problems there but I had spent years looking for the right location. I lived in the house for 2 years and since then have rented it both long term and short term. Fingers crossed up until now I have only ever had the property empty for a week in the past 7 years.

I find it interesting on here listening to the arguments about Spanish Property in the context of HPC. When somebody in the UK tells me that where they have bought is immune to HPC because it is so desirable I tend to disagree but when it comes to Spain I find that I raise a similar argument.

When somebody approaches me and says "i cant sell my house in Spain" or "Im having a nightmare with land grab etc" or "The area is going to the dogs" I ask one question.....Its not Torrevieja is it?. Surprisingly so far around 18 out of 30 people say "how did you guess". The next question is "Oh, is it somewhere inland then, perhaps looked too good to be true....lots of land etc?" Thats when the other 12 say yes.

In Spain pick a good area, front line if possible and you will NEVER lose. My Uncle bought an apartment in 1993 which was then a small fishing town called Puerto Duquesa. It cost him £35k, he bought it from an English guy who had bought it in 1987 for £10k. At the time my whole family felt it was a bad move and overpriced. In 2000 he came in to bad times and sold it for £110k (managing to clear all his debts)...last year it sold for just shy of 400k euros (£300k). Now I have to say that is crazy money but it is a great apartment which sits right on the harbour and as instantly sold whenever it has come on the market. Right place always sells in Spain.

Why will Spain remain pretty bouyant during a uk/worldwide recession?

Bob and his wife Sheila live in Worcester. They are both coming up to 60 and both are retiring on good private pensions. Bob & Sheila live in a house they bought in 1992 for £85,000 and the £10,000 mortage was paid off 5 years later. The house was valued in 2001 at £300,000 and in 2006 valued again at £380,000. Bob and Sheila MEW'd £40,000 out of the house for a cruise and to gove £30k to their son as a deposit on his house. In July 2008 Bob&Sheila go to look at Spain because they are sick of England (immigrants, hoodies, high cost of living) and have enjoyed holidays there in the past. They see a few places and come back and put their house on the market for £400k. A month later they drop the price to £380k and then in October down to £350k. HPC has kicked in and so in desperation they sell for £300k, pay off the £40k and walk away with £260k. They soon realise they can buy a nice 3 bed townhouse by the sea for £200k. They buy and spend a further £20k on tax, costs etc. £40k goes in the bank along with £40k (25% lump sum on pension). So even though they dropped their house price by 25% (£100k) they can still afford to buy a nice house with room for the grandkids in cash and still have £80k in the bank. Plus food and drink is cheaper (not helped though by the xchange rate) and council tax is £30 per year, heating bills, petrol etc are half so the pension goes so much further.

Now the above takes for granted that Bob and Sheila have no savings or investments whatsoever but do have £40k of debt and do drop their house price by 25%. It also takes into account that the family home is pretty averagely priced. Now Bob and Sheila are part of the baby boomer generation and are coming up to retirement at a time when the UK will be an expensive and bleak place to live. Many of these baby boomers would have holidayed in Spain and have grandkids so somewhere with a good all year round temperature, just a couple of hours and cheap flight away will certainly fit the bill. Cost of living is a lot less and heating is not needed as much, which is a blessing with fuel bills flying through the roof.

Anyway I suppose my point is that Spain is in my opinion a safe bet at the moment (unless your buying new build flats (familiar story worldwide) or in inland areas). I would be interested in hearing from people with opposing views.